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, and the trash cans overflow with food wrappers on summer afternoons. Otherwise, it is a great place. The park is a common resource because
a. people can be prevented from using it.
b. access is limited due to driving distances.
c. if too many people use it, one person's use diminishes other peoples' use.
d. anyone can use it without affecting anyone else.
c
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Discretionary fiscal policy
A) may not have desired effects on real GDP because it leads to decreases in aggregate demand. B) may not have desired effects on real GDP because of the time lags. C) would have a larger effect on real GDP if the multiplier was smaller. D) may not have desired effects on real GDP because it leads to increases in aggregate demand.
Two nations have the following production capacity given their endowment of resources. Country A can produce 50 units of beer or 80 units of pizzas. Country B can produce 100 units of beer or 90 units of pizzas. Which of the following statement is most appropriate?
A. Country A has a comparative advantage in beer and country B has an absolute advantage in pizzas. B. Country A has a comparative advantage in pizza and country B has a comparative advantage in beer. C. Country A has an absolute advantage both products. D. Both b and c are correct.