Suppose That You Would Like to Produce a Fireworks Show

question 9

Multiple Choice

Suppose that you would like to produce a fireworks show to celebrate Independence Day. What challenges might you face in charging consumers to view the fireworks?

• A) Fireworks are a public good.
• B) Watching fireworks is non-rival.
• C) It is difficult to exclude those who do not pay from viewing the fireworks.
• D) Fireworks take place at night.

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Definitions:

Government Spending

The total amount of money spent by the government on various services, infrastructure projects, and welfare programs.

Marginal Propensity

A measure of how much an individual's or household's consumption changes when their income changes by one unit.

Multiplier

In economics, it refers to the factor by which gains in total output are greater than the change in spending that caused it, often associated with fiscal policy.

Interest-earning Assets

Assets owned by a person or corporation that generate interest income.