A good is a nonexcludable if
A. its consumption by one person does not reduce its consumption by others.
B. it is impossible to prevent people from obtaining the benefits of the good once it has been produced.
C. no negative externalities are associated with its production and consumption.
D. it is free in the first place; that is, it is so abundant that people can get all they want at zero price.
Answer: B
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
If Ep is 3500 and Y is 3000, then companies will
A) reduce orders and production by 500. B) increase orders and production by 500. C) wait for final sales to increase but continue to produce at existing level in the future. D) wait for final sales to decrease but reduce the level of production in the future.
When the price of a good falls, there will be
A. both an outward shift in the good's demand curve and a movement along the good's demand curve. B. a movement along the good's demand curve. C. no change in quantity demanded. D. an outward shift in the good's demand curve.
Refer to the above figure. Profits for this firm are positive
A. only at points B and C. B. for points between B and C. C. for all points less than B and greater than C. D. only for all points less than B.