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QUESTION THREE A. Explain the non-rivalry and non-excludable characteristics of public good. (2 marks) B. Give three (3) examples of public good. (3 marks) C.

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QUESTION THREE A. Explain the non-rivalry and non-excludable characteristics of public good. (2 marks) B. Give three (3) examples of public good. (3 marks) C. Differentiate between positive externality and negative externality. (2 marks) D. Give two (2) examples each of positive externality and negative externality. (2 marks) The following is a macroeconomic model of Utopia. Y =C+I+G+X-M (National Income Identity) C = 80 + 0.4Yd (Consumption Function) M = 30 + 0.3Yd (Import function) X = $60 (Export expenditure) Yd = Y -T= $20 (Disposable income) E. Find the following. i. Marginal propensity to consume. Interpret your answer. (2 marks) ii. Marginal propensity to save. Interpret your answer. (2 marks) iii. Marginal propensity to import. Interpret your answer. (2 marks) F. Calculate the multiplier. Interpret your result. (1 mark) G. Compute the following. i. The consumption expenditure. (1 mark) ii. The import expenditure. (1 mark) iii. The Net export expenditure. (2 marks)

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