Economist B thinks that it is important to identify the condition(s) under which the case for government is strongest. With respect to the provision of nonexcludable public goods, she says
A) people must pay taxes to pay for the nonexcludable public good.
B) firms must pay taxes to pay for the nonexcludable public good.
C) people must actually want the nonexcludable public good that the government provides.
D) people must express their desire for the nonexcludable public good by voting for it.
E) none of the above
C
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The marginal cost of an activity ________ as you do more of it
A) increases B) decreases C) doesn't change D) changes only if the marginal benefit of the activity does not change E) changes only if the marginal benefit of the activity changes
Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals
A) 2.5. B) 1.29. C) 0.78. D) 0.06