A Government-Inhibited Good Is a Good Which

question 145

Multiple Choice

A government-inhibited good is a good which

• A) is not subject to the principle of mutual exclusivity.
• B) the political process has deemed socially undesirable.
• C) can be consumed by one individual without affecting the consumption of another individual.
• D) the political process has deemed socially desirable.

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Definitions:

Marginal Product

The extra production generated when one more unit of a particular input is added, with all other inputs remaining unchanged.

Law of Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Extra Output

The additional production that is generated as a result of adding more of a variable input, such as labor or capital.

Diminishing Returns

A principle stating that as additional amounts of a variable input are added to a fixed input, beyond some point the marginal product of the variable input begins to decrease.