The provision of a public good generates a
a. positive externality, as does the use of a common resource.
b. positive externality and the use of a common resource generates a negative externality.
c. negative externality, as does the use of a common resource.
d. negative externality and the use of a common resource generates a positive externality.
b
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Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, which, in turn, sells it to an art lover for $4,500. How much value does the gallery add?
A) $1,425 B) $1,500 C) $3,000 D) $4,500
If potential GDP for the first quarter of 2013 = $75.8 billion, and real GDP for the first quarter of 2013 = $80.3 billion, then the output gap was
A) -5.9%. B) -5.6%. C) 5.6%. D) 5.9%.