Question 1

The quantity of a public good produced by private provision

Accepted Answer

A) is less than the efficient quantity. 
B) is equal to the efficient quantity. 
C) is greater than the efficient quantity. 
D) maximizes total public benefit. 
E) maximizes net public benefit. 
A) is less than the efficient quantity. 
B) is equal to the efficient quantity. 
C) is greater than the efficient quantity. 
D) maximizes total public benefit. 
E) maximizes net public benefit.

Question 2

Competition between two political parties will cause those parties to propose policies

Accepted Answer

A) that are quite different. 
B) that are quite similar. 
C) of rational ignorance. 
D) that reduce the well-being of middle-income families and increasing the well-being of the rich and the poor. 
E) that equate total costs and total benefits. 
A) that are quite different. 
B) that are quite similar. 
C) of rational ignorance. 
D) that reduce the well-being of middle-income families and increasing the well-being of the rich and the poor. 
E) that equate total costs and total benefits.

Question 3

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 4

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 5

Suppose in a country there are only two persons.Person A is willing to pay $50 to have one unit of a public good produced;person B is willing to pay $60 to have one unit of a public good produced and $50 to have two units produced.A point on the country's marginal social benefit curve for this public good is a price of ________ and quantity demanded of ________.

Accepted Answer

A) $50;1 unit 
B) $60;1 unit 
C) $110;2 units 
D) $110;1 unit 
E) $55;1 unit 
A) $50;1 unit 
B) $60;1 unit 
C) $110;2 units 
D) $110;1 unit 
E) $55;1 unit

Question 6

According to public choice theory,a voter will favour a candidate whose political program is

Accepted Answer

A) perceived by the voter to be in his self-interest. 
B) best for the majority of the people. 
C) closest to efficiency. 
D) favoured by the median voter. 
E) all of the above. 
A) perceived by the voter to be in his self-interest. 
B) best for the majority of the people. 
C) closest to efficiency. 
D) favoured by the median voter. 
E) all of the above.

Question 7

The marginal social benefit curve for a public good is derived by

Accepted Answer

A) adding the marginal benefits of all individuals at each quantity. 
B) adding the quantities demanded by all individuals at each price. 
C) surveying consumers and asking how much they use a certain good or service. 
D) adding the total benefits for all consumers for a given quantity of the good. 
E) finding the maximum amount someone is willing to pay for one more unit of the good. 
A) adding the marginal benefits of all individuals at each quantity. 
B) adding the quantities demanded by all individuals at each price. 
C) surveying consumers and asking how much they use a certain good or service. 
D) adding the total benefits for all consumers for a given quantity of the good. 
E) finding the maximum amount someone is willing to pay for one more unit of the good.

Question 8

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 9

Use the figure below to answer the following questions.
   Figure 17.3.1
-Figure 17.3.1 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

The efficient scale of provision of a public good occurs where

Accepted Answer

A) total benefit is at a maximum. 
B) total benefit is at a minimum. 
C) marginal social benefit is at a maximum. 
D) marginal social benefit minus marginal social cost equals zero. 
E) marginal social cost is at a minimum. 
A) total benefit is at a maximum. 
B) total benefit is at a minimum. 
C) marginal social benefit is at a maximum. 
D) marginal social benefit minus marginal social cost equals zero. 
E) marginal social cost is at a minimum.

Question 11

Use the table below to answer the following questions.
Table 17.2.1
 $$\begin{array} { c c c c c } 
\hline\begin{array} { c } 
\text { Number of } \
\text { Voters }
\end{array} & \begin{array} { c } 
\text { Current } \
\text { Income }
\end{array} & \begin{array} { c } 
\text { Income after } \
\text { Proposal A }
\end{array} & \begin{array} { c } 
\text { Income after } \
\text { Proposal B }
\end{array} & \begin{array} { c } 
\text { Income after } \
\text { Proposal C }
\end{array} \
\hline 25 & \$ 10,000 & \$ 15,000 & \$ 20,000 & \$ 5,000 \
25 & \$ 20,000 & \$ 25,000 & \$ 20,000 & \$ 18,000 \
25 & \$ 40,000 & \$ 45,000 & \$ 40,000 & \$ 38,000 \
25 & \$ 90,000 & \$ 75,000 & \$ 80,000 & \$ 99,000\\hline
\end{array}$$
-In Table 17.2.1,which one of the proposals will have the least support?

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

Question 12

Private provision of public goods

Accepted Answer

A) fails because the private firm will always go broke. 
B) succeeds because public provision is often more costly. 
C) succeeds if consumers expect to obtain a benefit from the consumption of the public good. 
D) fails because of the free-rider problem. 
E) fails because private firms generally charge higher prices than public firms,and therefore lose customers. 
A) fails because the private firm will always go broke. 
B) succeeds because public provision is often more costly. 
C) succeeds if consumers expect to obtain a benefit from the consumption of the public good. 
D) fails because of the free-rider problem. 
E) fails because private firms generally charge higher prices than public firms,and therefore lose customers.

Question 13

For a common resource,the marginal private cost curve slopes ________ and the marginal social cost curve slopes ________.

Accepted Answer

A) upward;upward 
B) upward;downward 
C) downward;upward 
D) downward;downward 
E) upward or downward;in the same direction as the marginal private cost curve 
A) upward;upward 
B) upward;downward 
C) downward;upward 
D) downward;downward 
E) upward or downward;in the same direction as the marginal private cost curve

Question 14

Which of the following achieves the efficient use of a common resource?

Accepted Answer

A) property rights,production quotas,and individual transferable quotas 
B) property rights,individual transferable quotas,and subsidies 
C) property rights,production quotas,and subsidies 
D) individual transferable quotas and copyrights 
E) production quotas,individual transferable quotas,and copyrights 
A) property rights,production quotas,and individual transferable quotas 
B) property rights,individual transferable quotas,and subsidies 
C) property rights,production quotas,and subsidies 
D) individual transferable quotas and copyrights 
E) production quotas,individual transferable quotas,and copyrights

Question 15

If a good is a public good,

Accepted Answer

A) anyone can be excluded from enjoying its benefits. 
B) no one can be excluded from enjoying its benefits. 
C) consumers must pay a high price to enjoy its benefits. 
D) consumers pay a low price. 
E) economies of scale exist over the entire range of output for which there is a demand. 
A) anyone can be excluded from enjoying its benefits. 
B) no one can be excluded from enjoying its benefits. 
C) consumers must pay a high price to enjoy its benefits. 
D) consumers pay a low price. 
E) economies of scale exist over the entire range of output for which there is a demand.

Question 16

If all voters are well informed about national defence,the quantity of national defence provided by the government will be

Accepted Answer

A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the efficient quantity. 
E) the quantity that maximizes the budget of the Department of National Defence. 
A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the efficient quantity. 
E) the quantity that maximizes the budget of the Department of National Defence.

Question 17

Public choice theory predicts that

Accepted Answer

A) voters are fully informed about the effects of policies. 
B) voters are rationally ignorant. 
C) governments make choices that achieve an efficient provision of public goods. 
D) votes are based on reality,not perceptions. 
E) votes are based on lobbyists' viewpoints. 
A) voters are fully informed about the effects of policies. 
B) voters are rationally ignorant. 
C) governments make choices that achieve an efficient provision of public goods. 
D) votes are based on reality,not perceptions. 
E) votes are based on lobbyists' viewpoints.

Question 18

Although both cable television and air-traffic control are nonrival,they differ from each other because

Accepted Answer

A) cable television is a private good and air-traffic control is a public good. 
B) cable television is a public good and air-traffic control is a private good. 
C) cable television is nonexcludable and air-traffic control is a public good. 
D) cable television is nonexcludable and air-traffic control is excludable. 
E) cable television is excludable and air-traffic control is nonexcludable. 
A) cable television is a private good and air-traffic control is a public good. 
B) cable television is a public good and air-traffic control is a private good. 
C) cable television is nonexcludable and air-traffic control is a public good. 
D) cable television is nonexcludable and air-traffic control is excludable. 
E) cable television is excludable and air-traffic control is nonexcludable.

Question 19

Which of the following applies to the tragedy of the commons? I.In the absence of government action,there is an absence of incentives to prevent the overuse of the common resource.
II.When consumers take account of the marginal social benefit and marginal social cost,overuse of the resource occurs.
III.Even with government action,it is impossible for an efficient level of output to be achieved.

Accepted Answer

A) I only 
B) I and II 
C) II and III 
D) I,II and III 
E) none of the above 
A) I only 
B) I and II 
C) II and III 
D) I,II and III 
E) none of the above

Question 20

When a good is nonrival and nonexcludable,it is a

Accepted Answer

A) natural monopoly. 
B) private good. 
C) regulated good. 
D) public good. 
E) common resource. 
A) natural monopoly. 
B) private good. 
C) regulated good. 
D) public good. 
E) common resource.

The quantity of a public good produced by private provision

Competition between two political parties will cause those parties to propose policies

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

A common resource is

According to public choice theory,a voter will favour a candidate whose political program is

The marginal social benefit curve for a public good is derived by

An example of common resource is

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 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

The efficient scale of provision of a public good occurs where

Private provision of public goods

For a common resource,the marginal private cost curve slopes and the marginal social cost curve slopes .

Which of the following achieves the efficient use of a common resource?

If a good is a public good,

If all voters are well informed about national defence,the quantity of national defence provided by the government will be

Public choice theory predicts that

Although both cable television and air-traffic control are nonrival,they differ from each other because

When a good is nonrival and nonexcludable,it is a

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Filters

Exam 17: Public Goods and Common Resources

The quantity of a public good produced by private provision

Competition between two political parties will cause those parties to propose policies

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

A common resource is

According to public choice theory,a voter will favour a candidate whose political program is

The marginal social benefit curve for a public good is derived by

An example of common resource is

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 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

The efficient scale of provision of a public good occurs where

Private provision of public goods

For a common resource,the marginal private cost curve slopes ________ and the marginal social cost curve slopes ________.

Which of the following achieves the efficient use of a common resource?

If a good is a public good,

If all voters are well informed about national defence,the quantity of national defence provided by the government will be

Public choice theory predicts that

Although both cable television and air-traffic control are nonrival,they differ from each other because

When a good is nonrival and nonexcludable,it is a

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

Organizing Production

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 .

For a common resource,the marginal private cost curve slopes and the marginal social cost curve slopes .