A homeless family is given a government subsidy for an apartment in an affordable housing project. The apartment
A. is subject to the free-rider problem.
B. has widespread benefits and concentrated costs.
C. is not a public good.
D. is not subject to the principle of rival consumption.
Answer: C
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The law of decreasing returns states that as a firm uses more of a
A) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. B) variable input, total output will increase indefinitely. C) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. D) variable input, output will begin to fall immediately. E) fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.
Studies have shown that the price elasticity of demand for necessities, such as food, are higher in developing countries and lower in developed countries. What is the reason for this difference in elasticity?
What will be an ideal response?