Many cities have summer pops series in which the local orchestra performs light classical music in a public park. These performances are free in some areas. Apply the concept of a public good to pops performances and explain whether an admission charge is efficient
Pops performances are nondepletable in the sense that music reaching my ears takes nothing away from the ears of others. Exclusion may be possible, in which case free riders can be prevented from attending. However, if there is no MC from an additional user, efficiency calls for a zero price even if exclusion is possible. Naturally, if there are detrimental externalities, such as congestion or parking on nearby lawns, this may call for pricing the good; this goes beyond the question, which said to apply public good concepts.
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Stocks and bonds issued in markets-oriented financial systems are rather __________ because they are traded __________
A) liquid; frequently B) liquid; infrequently if at all C) illiquid; frequently D) illiquid; infrequently if at all
A consumption-based theory of the determination of the real interest rate is based on the assumption that: a. a rise in the real interest rate will increase current consumption
b. the real interest rate must adjust to make people willing to experience changing consumption levels over time. c. the real interest rate is determined by the supply and demand for investment and is therefore unaffected by consumption decisions. d. the real interest rate must be positive.