Thursday, June 11, 2009

Time to fix the answer key

A lot of unusual things have happened in our economy over the past year, and sometimes it feels like the old rules don't apply anymore. The people who write the questions for the Foreign Service Exam, however, haven't seemed to notice (via NPR's Planet Money):
I recently bought the foreign service exam study guide since I am taking the test this Friday. The test consists of, among other things, basic economics questions. I was so amused by one of the sample questions that I just had to share:
All of the following are examples of United States products that would typically fail to be produced to optimal output without government intervention EXCEPT:
A. national defense products.
B. light provided by lighthouses.
C. new automobiles.
D. new highways.
And in the answer section:
C. This is the correct answer. Automobiles are not a public good. Optimal production of automobiles is related to the demand for them by individual consumers.

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