Imagine a 2,000-acre park with picnic benches, trees, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking on summer afternoons. Otherwise, it is a great place. An efficient solution to the parking problem would be to
a. prohibit parking in the vicinity of the park.
b. charge higher prices for parking at busy times.
c. police the parking area and ticket cars that are parked illegally.
d. do nothing.
b
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Which of the following statements best defines private costs?
A) They are internal in the sense that the buyer or seller must explicitly take them into account. B) They are costs borne by people other than those who commit the action. C) They are synonymous with social costs. D) They represent explicit costs incurred by producers in the private sector.
A consumer has been buying 3 magazines and 1 book each month. The price of magazines then decreases, which directly causes the marginal utility per dollar spent on
A) magazines to increase, thereby inducing the consumer to purchase fewer magazines and more books. B) magazines to increase, thereby inducing the consumer to purchase more magazines and fewer books. C) books to increase, thereby inducing the consumer to purchase fewer magazines and more books. D) books to decrease, thereby inducing the consumer to purchase fewer magazines and more books.