If the government did not provide national defense, explain why you would be more likely to give money to a Girl Scout who knocks on your door to sell cookies than to give money to a volunteer collecting for the provision of national defense
The Girl Scout is selling a good that is exclusive and rival. The exclusivity means that if you don't pay for
the cookies, you can't eat them. The rivalry means that if someone else buys the cookies and eats them,
you're out of luck because you can't both consume the same cookies. The only way for you to get the
cookies is to pay for them. National defense, however, is nonexclusive and nonrival. The nonexclusiveness
means that you will get the benefits of this good if it is provided, even if you haven't paid for it. The
nonrivalry means that if someone else buys national defense, their use won't rival your use, and vice versa .
Since you can get the benefits of any national defense that is provided, without contributing to the
provision, you are unlikely to contribute to its provision.
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A critical assumption differs from a simplifying assumption in that a critical assumption
a. is a means of getting rid of extraneous details in the model b. cannot affect the conclusions of the model c. can affect the conclusions of the model d. is rarely used in economic models e. is never a fundamental assumption
If the quantity demanded of flashlights is 140,000 and the quantity supplied of flashlights is 80,000, then there is an excess supply of 60,000 flashlights
Indicate whether the statement is true or false
The group that is comprised of five presidents of Fed regional banks and seven Fed governors that gathers around a table to discuss whether to increase interest rates is the:
A. Federal Advisory Council. B. Federal Depository Insurance Corporation. C. Federal Open Market Committee. D. National Federal Reserve Bank.
If the multiplier has a value of 1, then the value of the marginal propensity to save (MPS) is
A. 0. B. 1.00. C. 0.10. D. 10.00.