Classify the good as excludable, non-excludable, rival, and non-rival.

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Answer 1

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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1. The IS/MP model assumes that the Fed sets the real interest rate at a given level Rt. Suppose the Fed adopts a monetary policy rule that instructs it how to change the real interest rate in response to short-run output. Let's call this a monetary policy rule (MPR): The parameter x is positive. Rt=+xY a) Redraw the IS/MP diagram replacing the MP curve with the MPR curve. Show how an aggregate demand shock affects output and interest rates in the short run. Use the IS and MPR equations to solve for the changes in output and the real interest rate. b) How does the change in a affect investment in the IS/MPR model? Explain how a tax cut affects short-run output and investment in this version of the short-run model. The effect on investment is called crowding out. c) Add the Phillips curve to complete the short-run model. Illustrate how the Fed's choice of large it makes reveals its trade off between inflation and output in the short run.

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Answer 2

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

Answer 6

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

Answer 7

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Answer 8

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.