1. Non- excludability is where:
- people can stop others from using the good.
- no one can be excluded from the benefiting of a good.
- people can be excluded from benefiting of a good.
- the free market left alone fails to deliver an efficient allocation of resources.
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2. Which one of the following is a measure of productivity?
- the annual percentage increase in production.
- output divided by employment.
- the quantity of capital equipment used divided by its price.
- the total amount of output produced each month.
3. Which one of the following statements referring to the price mechanism is correct?
- Producers and consumers take account of externalities.
- High prices are always associated with hight profits for producers.
- High prices can ration demand for scare goods and services.
- Films are unable to influence the market demand for their products.
4. There is an output gap when
- the economy is continuously producing more capital goods than consumer goods over a period of time.
- unemployment occurs because the rate of economic growth increase above its trend rate of growth.
- national output is higher or lower than it would have been if the country had grown continuously at its trend rate of growth.
- productivity is continuously higher in one country than in another.
5. What are goods provided by the government for people who are deemed to need them called?
- Positive externalities.
- Merit goods.
- Demerit goods.
- Negative externalities.