Which of the following best illustrates the free-rider problem?
a. A tollbooth is constructed at the entrance of a privately funded highway
b. Individuals contribute toward a national defense program by paying taxes to the government.
c. Some homeowners in a mountain resort area refuse to contribute toward paving the area's only access road.
d. You erect a locked gate around your swimming pool to keep out unsupervised children.
c
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The dollar value of GDP increased approximately 4 percent during the year, but real GDP fell 2 percent. Which of the following best explains this data?
a. The real capacity of the economy increased more rapidly than money output. b. In the international sector, there was a balance of trade deficit of approximately 2 percent of GDP. c. The inflation rate was approximately 6 percent during the year. d. The general level of prices rose approximately 2 percent.
The following graph is the production possibilities curve of a nation:
Refer to the above graph. The marginal opportunity cost of the fourth unit of bread is:
A. 0 unit of drill presses
B. 1 unit of drill presses
C. 3 units of drill presses
D. 4 units of drill presses