Define in technical terms the tragedy of the commons.
What will be an ideal response?
Because people typically look after their own interests, they consider the average benefits received from a collective good (the average public benefit equals the marginal personal benefit) and equate them to the marginal personal costs of nearly zero. This results in an overuse of the good as people seek to exploit the resource before someone else can exploit it. (See example 17.7 in the text.)
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An increase in the money wage rate leads to
A) a rightward shift of the aggregate supply curve. B) a downward movement along the aggregate supply curve. C) an upward movement along the aggregate supply curve. D) a leftward shift of the aggregate demand curve. E) a leftward shift of the aggregate supply curve.
Suppose that in 2016, the national income in the United States was $200 billion, depreciation was $15 billion, personal taxes were $20 billion, and transfer payments were $10 billion. Gross domestic product in 2016 is
A) $185 billion. B) $215 billion. C) $220 billion. D) $245 billion.
Contractual savings institutions include
A) mutual savings banks. B) money market mutual funds. C) commercial banks. D) life insurance companies.
An increase in the price level
A) shifts the short-run aggregate supply curve up and to the left. B) shifts the short-run aggregate supply curve down and to the right. C) shifts the long-run aggregate supply curve to the left. D) results in a movement along the short-run aggregate supply curve, rather than a shift in the short-run aggregate supply curve.