Exam 16: Public Choices and Public Goods

-The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal private cost is

If a good has an external benefit, efficiency can be achieved by

A free rider is someone who

The marginal social benefit curve from a public good is found by horizontally summing the marginal benefit curves of all individuals.

Subsidizing education can lead an efficient level of production because education has external benefits.

-The figure above shows the marginal social costs (MSC), marginal private benefits (MB), and marginal social benefits (MSB) of college education in Inland. If Inland's government does not intervene, and the colleges are competitive, ________ million students are enrolled, and the tuition is ________ per year.

Governments can use subsidies ________.

Why is it rational for individuals to be ignorant about public goods but not about private goods?

-The table above shows the marginal benefit that arises from providing police protection in an economy of two people, Paul and Art. Police protection is a public good. a) Construct a table of the economy's marginal social benefit from providing police protection. b) What is the economy's marginal social benefit from having 3 police cars on duty?

The marginal private benefit of education is

-The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal private benefit is

The quantity of a public good supplied by a private market is

-If the good in the table above is a public good and Pat and all are the only members of society, then the efficient quantity to produce is

-Mike, Joe, and Sam are roommates. They need lamps for their common living room. Lamps in their living room are a public good for these roommates. The marginal benefit that each individual receives from varying numbers of lamps in the living room is given in the table above. The marginal benefit for the second lamp to this group of roommates taken as a whole is

-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, then the efficient quantity of vaccinations is

Public goods are

Food stamps provided by the U.S. Department of Agriculture are an example of

To find the economy's marginal benefit curve for a public good, you would

The efficient quantity of a public good is the quantity that has the highest possible marginal social benefit.

What is the principle of minimum differentiation?