Questions from General Economics

Q: Define and give an example of a common resource. Without government

Define and give an example of a common resource. Without government intervention, will people use this good too much or too little? Why?

Q: Explain what is meant by a good being “excludable.” Explain

Explain what is meant by a good being “excludable.” Explain what is meant by a good being “rival in consumption.” Is a slice of pizza excludable? Is it rival in consumption?

Q: Explain how reducing a government budget deficit makes future generations better off

Explain how reducing a government budget deficit makes future generations better off. What fiscal policy might improve the lives of future generations more than reducing a government budget deficit?

Q: Give three examples of how our society discourages saving. What are

Give three examples of how our society discourages saving. What are the drawbacks of eliminating these disincentives?

Q: Explain why monetary and fiscal policy work with a lag. Why

Explain why monetary and fiscal policy work with a lag. Why do these lags matter in the choice between active and passive policy?

Q: Give an example of a monetary policy rule. Why might your

Give an example of a monetary policy rule. Why might your rule be better than discretionary policy? Why might it be worse?

Q: A college student has two options for meals: eating at the

A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O’ Soup for $1.50 per meal. Her weekly food budget is $60. a. Draw the budget constraint showing...

Q: As the chapter states, GDP does not include the value of

As the chapter states, GDP does not include the value of used goods that are resold. Why would including such transactions make GDP a less informative measure of economic well-being?

Q: Why do economists use real GDP rather than nominal GDP to gauge

Why do economists use real GDP rather than nominal GDP to gauge economic well-being?

Q: In the year 2013, the economy produces 100 loaves of bread

In the year 2013, the economy produces 100 loaves of bread that sell for $2 each. In the year 2014, the economy produces 200 loaves of bread that sell for $3 each. Calculate nominal GDP, real GDP, and...