Question 1

Sustainable production is

Accepted Answer

A) the rate of production that can be maintained indefinitely. 
B) the production output with the lowest average total cost. 
C) the production output where MC = ATC. 
D) the rate of production that maximizes marginal private benefit. 
E) the rate of production where MB = MC. 
A) the rate of production that can be maintained indefinitely. 
B) the production output with the lowest average total cost. 
C) the production output where MC = ATC. 
D) the rate of production that maximizes marginal private benefit. 
E) the rate of production where MB = MC. A

Question 2

Use the table below to answer the following questions.
Table 16.2.1  
-In Table 16.2.1,which of the proposals would be supported by political parties according to the principle of minimum differentiation?

Accepted Answer

A) Current income distribution 
B) Proposal A 
C) Proposal B 
D) Proposal C 
E) Proposal A or C 
A) Current income distribution 
B) Proposal A 
C) Proposal B 
D) Proposal C 
E) Proposal A or C B

Question 3

Use the figure below to answer the following questions.   Figure 16.2.1
-Refer to Figure 16.2.1.Curve MBA is Andrew's marginal benefit curve for a private good and curve MBB is Betty's marginal benefit curve for the same private good.If Andrew and Betty are the only two consumers in the economy,which point would be on the economy's marginal social benefit curve?

Accepted Answer

A) price of $20,quantity of 3 units 
B) price of $20,quantity of 4 units 
C) price of $10,quantity of 4 units 
D) price of $30,quantity of 0 units 
E) price of $60,quantity of 1 units 
A) price of $20,quantity of 3 units 
B) price of $20,quantity of 4 units 
C) price of $10,quantity of 4 units 
D) price of $30,quantity of 0 units 
E) price of $60,quantity of 1 units B

Question 4

To attract a majority of voters,a political party will

Accepted Answer

A) aim its message at the most enthusiastic groups. 
B) aim its message at a small but loyal following. 
C) present a political package aimed at making the wealthier voters better off. 
D) present a political package aimed at making a majority of voters better off. 
E) respond strongest to the most vigorous lobbyists. 
A) aim its message at the most enthusiastic groups. 
B) aim its message at a small but loyal following. 
C) present a political package aimed at making the wealthier voters better off. 
D) present a political package aimed at making a majority of voters better off. 
E) respond strongest to the most vigorous lobbyists.

Question 5

Cable television and air traffic control are similar to each other because both of them are

Accepted Answer

A) excludable. 
B) nonexcludable. 
C) nonrival. 
D) rival. 
E) private services. 
A) excludable. 
B) nonexcludable. 
C) nonrival. 
D) rival. 
E) private services.

Question 6

Which of the following quotations describes a nonexcludable and nonrival good?

Accepted Answer

A) "Mom,Ashley is looking at me." 
B) "Mom,Morgan won't let me watch the Backyardigans because she is watching Dora the Explorer." 
C) "Mom,Harrison won't let me in his room." 
D) "Mom,Taylor told me on the phone that he is also watching the Backyardigans on TV at his house,but I'm not allowed to go over there." 
E) "Mom said everyone in this house gets to enjoy the flowers in the garden." 
A) "Mom,Ashley is looking at me." 
B) "Mom,Morgan won't let me watch the Backyardigans because she is watching Dora the Explorer." 
C) "Mom,Harrison won't let me in his room." 
D) "Mom,Taylor told me on the phone that he is also watching the Backyardigans on TV at his house,but I'm not allowed to go over there." 
E) "Mom said everyone in this house gets to enjoy the flowers in the garden."

Question 7

According to ________ theory,governments make choices that result in an ________ provision of public goods.This outcome occurs in ________.

Accepted Answer

A) public choice;efficient;political markets in which voters are rationally ignorant 
B) social interest;efficient;a perfect political system in which voters are fully informed about the effects of policies 
C) social interest;efficient;political markets in which voters are rationally ignorant 
D) public choice;inefficient;a perfect political system in which voters are full informed about the effects of policies 
E) social interest;inefficient;political markets in which voters are rationally ignorant 
A) public choice;efficient;political markets in which voters are rationally ignorant 
B) social interest;efficient;a perfect political system in which voters are fully informed about the effects of policies 
C) social interest;efficient;political markets in which voters are rationally ignorant 
D) public choice;inefficient;a perfect political system in which voters are full informed about the effects of policies 
E) social interest;inefficient;political markets in which voters are rationally ignorant

Question 8

A common resource is

Accepted Answer

A) rival and either excludable or nonexcludable. 
B) excludable and either rival or nonrival. 
C) rival and excludable. 
D) rival and nonexcludable. 
E) nonexcludable and either rival or nonrival. 
A) rival and either excludable or nonexcludable. 
B) excludable and either rival or nonrival. 
C) rival and excludable. 
D) rival and nonexcludable. 
E) nonexcludable and either rival or nonrival.

Question 9

Use the figure below to answer the following questions.   Figure 16.3.1
-Figure 16.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota that results in the common resource being used efficiently is set at

Accepted Answer

A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week. 
A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week.

Question 10

Rational ignorance suggests that

Accepted Answer

A) all voters are ignorant. 
B) all voters will be ignorant on issues that are not of special interest to them. 
C) all voters will pursue information about each issue before voting. 
D) low voter turnout is due to a lack of understanding of the importance of the political platforms. 
E) it is easier to aim at the median voter because it is a less costly strategy for the politicians. 
A) all voters are ignorant. 
B) all voters will be ignorant on issues that are not of special interest to them. 
C) all voters will pursue information about each issue before voting. 
D) low voter turnout is due to a lack of understanding of the importance of the political platforms. 
E) it is easier to aim at the median voter because it is a less costly strategy for the politicians.

Question 11

Use the figure below to answer the following question.   Figure 16.2.3
-Refer to Figure 16.2.3.The graph provides information about a waste disposal system in a city of 1 million people.If the city installs the efficient capacity,then each person pays ________ in taxes.

Accepted Answer

A) $125 
B) $62.50 
C) $250 
D) zero 
E) $31.25 
A) $125 
B) $62.50 
C) $250 
D) zero 
E) $31.25

Question 12

The economy's demand curve for a public good is obtained by summing the individual

Accepted Answer

A) marginal cost curves horizontally. 
B) marginal cost curves vertically. 
C) marginal benefit curves horizontally. 
D) marginal benefit curves vertically. 
E) benefit curves diagonally. 
A) marginal cost curves horizontally. 
B) marginal cost curves vertically. 
C) marginal benefit curves horizontally. 
D) marginal benefit curves vertically. 
E) benefit curves diagonally.

Question 13

An example of common resource is

Accepted Answer

A) fish in the ocean. 
B) air traffic control. 
C) the Ambassador Bridge which goes between Windsor Ontario and Detroit. 
D) the Internet. 
E) national defence. 
A) fish in the ocean. 
B) air traffic control. 
C) the Ambassador Bridge which goes between Windsor Ontario and Detroit. 
D) the Internet. 
E) national defence.

Question 14

All of the following statements are true except

Accepted Answer

A) the market price of an ITQ equals the marginal social benefit minus the marginal cost. 
B) when an ITQ system is used in a fishing market,boat owners with a low marginal cost are willing and able to pay more for a quota than are boat owners with a higher marginal cost. 
C) individual differences in marginal cost do not prevent an ITQ system from delivering the efficient outcome. 
D) an ITQ is a production limit that is assigned to an individual who is free to transfer the quota to someone else. 
E) Canada does not use ITQs. 
A) the market price of an ITQ equals the marginal social benefit minus the marginal cost. 
B) when an ITQ system is used in a fishing market,boat owners with a low marginal cost are willing and able to pay more for a quota than are boat owners with a higher marginal cost. 
C) individual differences in marginal cost do not prevent an ITQ system from delivering the efficient outcome. 
D) an ITQ is a production limit that is assigned to an individual who is free to transfer the quota to someone else. 
E) Canada does not use ITQs.

Question 15

The market for a common resource has no government regulation.At the market equilibrium,

Accepted Answer

A) marginal social benefit is greater than marginal social cost. 
B) marginal social benefit equals marginal social cost. 
C) marginal social benefit is less than marginal cost. 
D) marginal social benefit is greater than marginal cost. 
E) marginal social benefit equals marginal cost. 
A) marginal social benefit is greater than marginal social cost. 
B) marginal social benefit equals marginal social cost. 
C) marginal social benefit is less than marginal cost. 
D) marginal social benefit is greater than marginal cost. 
E) marginal social benefit equals marginal cost.

Question 16

Your city council is contemplating upgrading its traffic control system and the council believes that the bigger the computer it installs,the better job it can do.Elected officials want to install the scale of the system that will win the most votes.The city bureaucrats want to maximize the budget.Suppose that you are an economist and your job is to calculate the scale of the system that uses resources efficiently.Public choice theory predicts that the quantity chosen will result in ________.As an informed voter,you can attempt to influence the choice of the correct system by encouraging other voters to ________.

Accepted Answer

A) overprovision that maximizes the budget of the bureaucrats;vote only for officials that will provide the smaller efficient quantity 
B) overprovision that maximizes the budget of the bureaucrats;increase their income elasticity of demand for the new traffic control system 
C) the efficient quantity;decrease their income elasticity of demand for the new traffic control system 
D) the efficient quantity;increase their income elasticity of demand for the new traffic control system 
E) overprovision that minimizes the income elasticity of demand of bureaucrats;decrease their elasticity of demand for the new traffic control system 
A) overprovision that maximizes the budget of the bureaucrats;vote only for officials that will provide the smaller efficient quantity 
B) overprovision that maximizes the budget of the bureaucrats;increase their income elasticity of demand for the new traffic control system 
C) the efficient quantity;decrease their income elasticity of demand for the new traffic control system 
D) the efficient quantity;increase their income elasticity of demand for the new traffic control system 
E) overprovision that minimizes the income elasticity of demand of bureaucrats;decrease their elasticity of demand for the new traffic control system

Question 17

In which of the following cases can the tragedy of the commons occur? I.Cattle grazing on private ranches.
II.Catching lobsters off the coast of Florida.
III.Raising salmon on salmon farms.
IV.Using legal services provided by the courts.

Accepted Answer

A) I only 
B) II only 
C) II and III only 
D) I and IV only 
E) I and II only 
A) I only 
B) II only 
C) II and III only 
D) I and IV only 
E) I and II only

Question 18

The budget of a government department is likely to be efficient if

Accepted Answer

A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of public choice theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities. 
A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of public choice theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities.

Question 19

John receives a marginal benefit of $80 from one satellite.Nick receives a marginal benefit of $50 from one satellite.Christina receives a marginal benefit of $65 from one satellite.John,Nick,and Christina are the only people in the economy What is the economy's marginal social benefit from one satellite?

Accepted Answer

A) $30 
B) $195 
C) $15 
D) $80 
E) $65 
A) $30 
B) $195 
C) $15 
D) $80 
E) $65

Question 20

Private goods are

Accepted Answer

A) nonrival and excludable. 
B) nonrival and nonexcludable. 
C) always produced in a nonregulated market. 
D) rival and excludable. 
E) rival and nonexcludable. 
A) nonrival and excludable. 
B) nonrival and nonexcludable. 
C) always produced in a nonregulated market. 
D) rival and excludable. 
E) rival and nonexcludable.

Sustainable production is

Use the table below to answer the following questions. Table 16.2.1 -In Table 16.2.1,which of the proposals would be supported by political parties according to the principle of minimum differentiation?

To attract a majority of voters,a political party will

Cable television and air traffic control are similar to each other because both of them are

Which of the following quotations describes a nonexcludable and nonrival good?

According to theory,governments make choices that result in an provision of public goods.This outcome occurs in .

A common resource is

Use the figure below to answer the following questions. Figure 16.3.1 -Figure 16.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota that results in the common resource being used efficiently is set at

Rational ignorance suggests that

Use the figure below to answer the following question. Figure 16.2.3 -Refer to Figure 16.2.3.The graph provides information about a waste disposal system in a city of 1 million people.If the city installs the efficient capacity,then each person pays ________ in taxes.

The economy's demand curve for a public good is obtained by summing the individual

An example of common resource is

All of the following statements are true except

The market for a common resource has no government regulation.At the market equilibrium,

In which of the following cases can the tragedy of the commons occur? I.Cattle grazing on private ranches. II.Catching lobsters off the coast of Florida. III.Raising salmon on salmon farms. IV.Using legal services provided by the courts.

The budget of a government department is likely to be efficient if

Private goods are

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Filters

Exam 16: Public Goods and Common Resources

Sustainable production is

Use the table below to answer the following questions. Table 16.2.1 -In Table 16.2.1,which of the proposals would be supported by political parties according to the principle of minimum differentiation?

To attract a majority of voters,a political party will

Cable television and air traffic control are similar to each other because both of them are

Which of the following quotations describes a nonexcludable and nonrival good?

According to ________ theory,governments make choices that result in an ________ provision of public goods.This outcome occurs in ________.

A common resource is

Use the figure below to answer the following questions. Figure 16.3.1 -Figure 16.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota that results in the common resource being used efficiently is set at

Rational ignorance suggests that

Use the figure below to answer the following question. Figure 16.2.3 -Refer to Figure 16.2.3.The graph provides information about a waste disposal system in a city of 1 million people.If the city installs the efficient capacity,then each person pays ________ in taxes.

The economy's demand curve for a public good is obtained by summing the individual

An example of common resource is

All of the following statements are true except

The market for a common resource has no government regulation.At the market equilibrium,

In which of the following cases can the tragedy of the commons occur? I.Cattle grazing on private ranches. II.Catching lobsters off the coast of Florida. III.Raising salmon on salmon farms. IV.Using legal services provided by the courts.

The budget of a government department is likely to be efficient if

Private goods are

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Filters

According to theory,governments make choices that result in an provision of public goods.This outcome occurs in .