Explain why each of the following is either a private good or a public good: traffic lights, in line skates, a city park, a chicken salad sandwich, a tennis racket, national defense, a coastal lighthouse.
Answer to relevant QuestionsWhat is a transfer payment? Why does the gov-ernment engage in such transfers? Is the level of government spending too high? How has it grown? How does it compare to government spending in other industrial economies? What is the relationship between the public debt and the debt-to-GDP ratio? How does the U.S. debt ratio compare to the ratios in other demo cratic market economies? How do tariffs work? Illustrate by referring to U.S. lumber imports from Canada, using any set of quantities and prices to make your point. Suppose the United States allowed Japan free trade privileges in the U.S. market. What would happen to the equilibrium price and total quantity of VCRs bought and sold in the U.S. market?
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