Exam 16: Public Choices and Public Goods

After Hurricane Sandy, FEMA (the Federal Emergency Management Agency) advertised in a New Jersey radio station how people affected by the hurricane could file for assistance. In the political marketplace, the decision makers in FEMA are best characterized as

-Vaccinations provide both private benefits and external benefits. The table above gives information on the marginal private benefit and marginal external benefit associated with vaccination against varicella (chicken pox). If the marginal cost of a varicella vaccination is $10, to achieve an efficient quantity of vaccinations, the government could provide a subsidy of

Which of the following is likely to be nonexcludable but rival?

-The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then

Which of the following is a possible government solution to the problem posed by a good with an external benefit?

Katie Bobby -The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $25 a piece to produce, who would vote for the purchase of four submarines?

Long Beach Island, off the coast of New Jersey, is considering building a system of satellite towers that will enhance communication during emergencies such as hurricanes. The efficient quantity of satellite towers is definitely the quantity of such that the

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $36, the efficient quantity of satellites is

How does the principle of minimum differentiation relate to the free-rider problem?

-In the above figure, what amount of subsidy per student would government have to provide to colleges if its desired objective was to achieve an efficient level of education, 50 million students per year?

Bureaucratic overprovision of a public good could occur because

Some years ago The Wall Street Journal reported that the government of Thailand "plans to launch a chain of more than 3,000 Thai restaurants world-wide over the next five years, with the largest number, more than 1,000, slated for the United States." The Thai government will have a 30 percent minority stake in the restaurants and the rest will be given to Thai owners. The country's deputy commerce minister explains that the government will play an active role in drawing up menus, making sure that genuine Thai food is served and ensuring that 70 percent of supplies for the restaurants are imported from Thailand. Because the Thai government will be part owner of these restaurants, are these restaurants public goods?

National defense is an example of a ________.

-In the above table, the efficient level of output can be achieved through a per unit subsidy of

Which of the following is the BEST example of a good that is nonrival and excludable?

A school of tuna swimming in the ocean is

The economy's marginal social benefit curve for a public good is calculated by adding the

There are four lighthouses on the island of Sand. If this is the efficient quantity of lighthouses, ________.

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

-The table above provides information about the marginal social cost and marginal social benefit of street lights, which are a public good. a) What quantity would a private company provide? Why? b) What is the efficient quantity?