We assume leisure is a normal good. This implies that
A) an increase in taxes decreases the demand for leisure.
B) households maximize utility.
C) preferences over consumption are well defined.
D) an increase in the wage increases demand for leisure.
A
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Why do market failures arise in case of public goods?
a. The quantity produced is much more than is actually required by the people. b. The quality of these goods is not good enough. c. The quantity produced is too less from the society's point of view. d. The government wastes a lot of resources for producing a public good. e. The users of such goods are required to pay a high price for these goods.
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her
home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. An economist would calculate Ziva's total cost for the day of farming to equal a. $130. b. $250. c. $300. d. $380.