When a Resource Has No Direct Price

question 14

Multiple Choice

When a resource has no direct price

• A)overuse of the resource and the tragedy of the commons may occur.
• B)overuse of resources and underproduction will occur.
• C)pollution occurs.
• D)underallocation of resources may occur.

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Definitions:

Marginal Propensity

The incremental change in spending (consumption or saving) that occurs with a change in disposable income.

Multiplier

An economic factor that quantifies the impact of a change in investment, government spending, or other financial activity on the overall economy.

Marginal Propensity

Refers to the increase in personal consumer spending that occurs with an increase in disposable income.

Aggregate Expenditure

The total amount spent on goods and services in an economy at a given level of income during a specific period.