Question 1

Which of the following statements is true regarding potential information problems faced by consumers?

Accepted Answer

A)  Sellers have little incentive to inform customers about their products. 
B)  The market provides consumers with a strong incentive to acquire information. 
C)  Information problems tend to be most problematic for items consumers purchase regularly. 
D)  In markets, people make all decisions with full information. 
A)  Sellers have little incentive to inform customers about their products. 
B)  The market provides consumers with a strong incentive to acquire information. 
C)  Information problems tend to be most problematic for items consumers purchase regularly. 
D)  In markets, people make all decisions with full information.

Question 2

A good is considered to be a public good if it

Accepted Answer

A)  is a good produced by the government sector. 
B)  is both nonrival-in-consumption and nonexcludable. 
C)  benefits only a small group of consumers but is very costly to produce. 
D)  is a good whose production is financed by tax revenue. 
A)  is a good produced by the government sector. 
B)  is both nonrival-in-consumption and nonexcludable. 
C)  benefits only a small group of consumers but is very costly to produce. 
D)  is a good whose production is financed by tax revenue.

Question 3

A market transaction causes an externality if someone

Accepted Answer

A)  directly involved in the transaction receives uncompensated benefits or costs from it. 
B)  not directly involved in the transaction receives uncompensated benefits or costs from it. 
C)  directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out. 
D)  not directly involved in the transaction interferes in it by imposing regulations or product standards. 
A)  directly involved in the transaction receives uncompensated benefits or costs from it. 
B)  not directly involved in the transaction receives uncompensated benefits or costs from it. 
C)  directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out. 
D)  not directly involved in the transaction interferes in it by imposing regulations or product standards.

Question 4

Markets provide the efficient amount of a good or service when

Accepted Answer

A)  externalities are present. 
B)  monopoly exists. 
C)  public goods are present. 
D)  competition is present and externalities and public goods are absent. 
A)  externalities are present. 
B)  monopoly exists. 
C)  public goods are present. 
D)  competition is present and externalities and public goods are absent.

Which of the following statements is true regarding potential information problems faced by consumers?

A good is considered to be a public good if it

A market transaction causes an externality if someone

Markets provide the efficient amount of a good or service when

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Exam 5: Difficult Cases for the Market, and the Role of Government

Which of the following statements is true regarding potential information problems faced by consumers?

A good is considered to be a public good if it

A market transaction causes an externality if someone

Markets provide the efficient amount of a good or service when

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters