If the government did not provide national defense, explain why you would be more likely to give money to a Girl Scout who knocks on your door to sell cookies than to give money to a volunteer collecting for the provision of national defense
The Girl Scout is selling a good that is exclusive and rival. The exclusivity means that if you don't pay for
the cookies, you can't eat them. The rivalry means that if someone else buys the cookies and eats them,
you're out of luck because you can't both consume the same cookies. The only way for you to get the
cookies is to pay for them. National defense, however, is nonexclusive and nonrival. The nonexclusiveness
means that you will get the benefits of this good if it is provided, even if you haven't paid for it. The
nonrivalry means that if someone else buys national defense, their use won't rival your use, and vice versa .
Since you can get the benefits of any national defense that is provided, without contributing to the
provision, you are unlikely to contribute to its provision.
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In the above figure, when the efficient quantity of gloves is produced, the total consumer surplus is
A) $3,000. B) $15,000. C) $22,500. D) $45,000.
With panel data, the causal effect
A) cannot be estimated since correlation does not imply causation. B) is typically estimated using the probit regression model. C) can be estimated using the "differences-in-differences" estimator. D) can be estimated by looking at the difference between the treatment and the control group after the treatment has taken place.