The rule of thumb for a government deciding whether to provide a public good is that the:
a. marginal cost of the good should be less than the marginal benefit
b. opportunity cost of the good should be greater than the marginal benefit.
c. sunk cost of the good should be equal to the marginal benefit.
d. variable cost of the good should be greater than the sunk cost.
a
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Which of the following is true? In the above figure, if the market is
A) a monopoly, output will be Q1 and price will be P3. B) a monopoly, output will be Q3 and price will be P3. C) perfect competition, output will be Q2 and price will be P2. D) perfect competition, output will be Q1 and price will be P1. E) perfect competition, output will be Q3 and price will be P3.
Which of the following is a possible solution when a scarce resource is subject to the tragedy of the commons?
A) force people to move away from the commons B) offer subsidies to consumers C) persuade people to use less of the scarce resource through an advertising campaign D) access to the commons can be restricted through community norms and laws