The City Symphony presents three open-air concerts in the city park pavilion during the spring and summer. Many who attend make donations for symphony expenses, but the donation is not required. Some who attend make no contributions. Economists would
A. classify the noncontributors as detrimental externalities.
B. call the concerts excludable events.
C. call the noncontributors free riders.
D. call the concerts depletable goods.
Answer: C
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Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. An increase in the price of beer would bring about a movement from
A) point a to point b. B) point c to point b. C) D2 to D1. D) D0 to D2.
Which component of current U.S. GDP under the expenditure approach is most likely to be negative?
a. consumption b. government purchases c. net exports d. investment
A monopoly produces widgets at a marginal cost of $8 per unit and zero fixed costs. It faces an inverse demand function given by P = 38 - Q. What are the profits of the monopoly in equilibrium?
A. $345 B. $225 C. $120 D. None of the statements is correct.
Appendix: Auctions are used in place of markets when the items traded are unique (e.g., a Ming vase or a right to drill for oil). Which of the following examples are typically sold using Vickrey auction methods?
a. For-sale-by-owner houses b. Household furnishings c. Items sold in Filene's Basement, with the price discounted after a certain date d. Vintage postage stamps