If Good X Is Available Free of Charge, Then

question 392

Multiple Choice

If good x is available free of charge, then

• A)good x must be provided by nature.
• B)good x must be provided by the government.
• C)the private market cannot ensure an efficient allocation of resources in the market for good x.
• D)government policy is incapable of increasing total surplus in the market for good x.

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Definitions:

Unemployment

The situation where individuals who are capable of working and are actively seeking work remain jobless.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Ceteris Paribus

A Latin term used in economics to describe the analysis of a condition under the assumption that all other variables remain unchanged.

Scarcity

The basic economic issue arises from unlimited human desires facing limited resources on the planet.