A couple refuses to mow their lawn. Their neighbors take them to court, arguing using the logic of economic theory that
a. property rights are poorly defined because externalities exist
b. they are free riders and entitled to the value of the externalities
c. although there are no third parties because property rights are clear, the market still generates market failure
d. although property rights are clear, there are still externalities that should be considered
e. market failure can be avoided if the couple sells their property to any of the neighbors
D
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The key prediction of the Solow model adapted to include technological change ________ been born out, i.e. with a few exceptions convergence ________ a reality
A) has not, is not B) has not, is C) has, is not D) has, is
If the free market is called upon to provide public goods, then:
a. there will more goods provided than is optimal. b. there will be fewer goods provided than is optimal. c. the market will provide the optimal number of goods. d. the market price will be correct, but the optimal amount of output will not be produced. e. the firms will earn excess profit.