Without government intervention, society is likely to get too ...

[Caiter2013]

Without government intervention, society is likely to get too little production of: i. private goods that generate external costs ii. private goods that generate external benefits iii. public goods
 a. (i) only
 b. (ii) only
 c. (iii) only
 d. both (ii) and (iii)

Question 2

Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. Which of the following is true?
 a. Mutually beneficial trade between Karl and Adam could take place at an exchange rate of 1 ton of apples to 1 1/2 ton of oranges.
  b. Mutually beneficial trade between Karl and Adam could take place at an exchange rate of 1 ton of oranges to 1 1/2 ton of apples.
  c. both a. and b. are true.
 d. neither a. nor b. are true.

[Swizqar]

Answer to Question 1

d

Answer to Question 2

c

[Caiter2013]

Thank you

[Swizqar]

No problemo