Question 1

Nonrivalry is a feature of

Accepted Answer

A)  all nonexcludable goods. 
B)  excludable goods. 
C)  goods but not services. 
D)  public goods. 
A)  all nonexcludable goods. 
B)  excludable goods. 
C)  goods but not services. 
D)  public goods.

Question 2

Nonexcludability is a feature of

Accepted Answer

A)  goods but not services. 
B)  all nonrival goods. 
C)  public goods. 
D)  goods with an external cost. 
A)  goods but not services. 
B)  all nonrival goods. 
C)  public goods. 
D)  goods with an external cost.

Question 3

-The figure above shows the marginal social costs (MSC), marginal private benefits (MB), and marginal social benefits (MSB) of university education in Inland. The efficient level of university enrolment in Inland is

Accepted Answer

A)  0.5 million students per year. 
B)  0.8 million students per year. 
C)  0.6 million students per year. 
D)  0.7 million students per year. 
A)  0.5 million students per year. 
B)  0.8 million students per year. 
C)  0.6 million students per year. 
D)  0.7 million students per year.

Question 4

The benefit from an additional unit of a good or service that the consumer of that good or service receives is the

Accepted Answer

A)  opportunity cost. 
B)  marginal private benefit. 
C)  marginal external benefit. 
D)  marginal social benefit. 
A)  opportunity cost. 
B)  marginal private benefit. 
C)  marginal external benefit. 
D)  marginal social benefit.

Question 5

A movie shown on a pay- per- view cable television channel is an example of

Accepted Answer

A)  an excludable and nonrival good. 
B)  an excludable and rival good. 
C)  a nonexcludable and rival good. 
D)  a nonexcludable and nonrival good. 
A)  an excludable and nonrival good. 
B)  an excludable and rival good. 
C)  a nonexcludable and rival good. 
D)  a nonexcludable and nonrival good.

Question 6

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defence satellites, a public good. If the marginal social cost of a satellite is $54, the quantity of satellites provided by a competitive market is

Accepted Answer

A)  0. 
B)  1. 
C)  2. 
D)  3. 
A)  0. 
B)  1. 
C)  2. 
D)  3.

Question 7

Consider a market in which there is an external benefit. The inefficient market equilibrium is such that

Accepted Answer

A)  marginal social cost is greater than marginal social benefit. 
B)  price is too high. 
C)  too much output is produced. 
D)  too little output is produced. 
A)  marginal social cost is greater than marginal social benefit. 
B)  price is too high. 
C)  too much output is produced. 
D)  too little output is produced.

Question 8

Which of the following is the BEST example of a public good?

Accepted Answer

A)  A stop sign 
B)  A parking space 
C)  A car 
D)  A toll road 
A)  A stop sign 
B)  A parking space 
C)  A car 
D)  A toll road

Question 9

When consumption of a good is nonrival and nonexcludable, the good is a

Accepted Answer

A)  private good. 
B)  service. 
C)  mixed good. 
D)  public good. 
A)  private good. 
B)  service. 
C)  mixed good. 
D)  public good.

Question 10

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

Accepted Answer

A)  subsidy of $20. 
B)  tax of $60. 
C)  subsidy of $60. 
D)  tax of $20. 
A)  subsidy of $20. 
B)  tax of $60. 
C)  subsidy of $60. 
D)  tax of $20.

Question 11

Free riders are not a problem in the market for a private good because

Accepted Answer

A)  non- payers can be excluded from consuming the good. 
B)  the good can be produced only at a positive marginal cost. 
C)  the good is a rival good. 
D)  the free rider will not get caught. 
A)  non- payers can be excluded from consuming the good. 
B)  the good can be produced only at a positive marginal cost. 
C)  the good is a rival good. 
D)  the free rider will not get caught.

Question 12

A good which is nonrival and nonexcludable is

Accepted Answer

A)  a private good. 
B)  an externality. 
C)  a social good. 
D)  a public good. 
A)  a private good. 
B)  an externality. 
C)  a social good. 
D)  a public good.

Question 13

If it is impossible to prevent someone from benefiting from a good regardless of whether or not the person paid for it, then the good is

Accepted Answer

A)  nonrival. 
B)  rival. 
C)  excludable. 
D)  nonexcludable. 
A)  nonrival. 
B)  rival. 
C)  excludable. 
D)  nonexcludable.

Question 14

Which of the following does NOT contain an externality?

Accepted Answer

A)  I sell you an ice cream and you drip it all over the person sitting next to you. 
B)  I sell you an ice cream and it gives you a headache. 
C)  I give you an ice cream and you share it with a friend. 
D)  I sell you an ice cream and you share it with your friend. 
A)  I sell you an ice cream and you drip it all over the person sitting next to you. 
B)  I sell you an ice cream and it gives you a headache. 
C)  I give you an ice cream and you share it with a friend. 
D)  I sell you an ice cream and you share it with your friend.

Question 15

The external benefit of a good

Accepted Answer

A)  equals its producer surplus. 
B)  equals its total surplus. 
C)  is a benefit from the good falling on people who are not the consumers of the good. 
D)  equals its consumer surplus. 
A)  equals its producer surplus. 
B)  equals its total surplus. 
C)  is a benefit from the good falling on people who are not the consumers of the good. 
D)  equals its consumer surplus.

Question 16

Consider a market in which there is an external benefit. A private subsidy paid to producers can be used to arrive at the efficient market equilibrium because the subsidy will

Accepted Answer

A)  decrease demand. 
B)  decrease the supply of the good. 
C)  increase the price demanders pay. 
D)  increase the quantity produced. 
A)  decrease demand. 
B)  decrease the supply of the good. 
C)  increase the price demanders pay. 
D)  increase the quantity produced.

Question 17

Education at a private university is NOT a public good because it is

Accepted Answer

A)  nonrival. 
B)  excludable. 
C)  Both nonrival and nonexcludable. 
D)  None of the above answers is correct. 
A)  nonrival. 
B)  excludable. 
C)  Both nonrival and nonexcludable. 
D)  None of the above answers is correct.

Question 18

A political equilibrium can never be reached without voters, firms, politicians and

Accepted Answer

A)  market prices. 
B)  indifference curves. 
C)  public costs. 
D)  bureaucrats. 
A)  market prices. 
B)  indifference curves. 
C)  public costs. 
D)  bureaucrats.

Question 19

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defence satellites, a public good. What is the marginal benefit to society from the fourth satellite?

Accepted Answer

A)  $18 
B)  $4 
C)  $36 
D)  $20 
A)  $18 
B)  $4 
C)  $36 
D)  $20

Question 20

-In the above figure, if a subsidy is granted to producers that generates an efficient level of production, then the deadweight loss will be

Accepted Answer

A)  zero. 
B)  $2,000. 
C)  $1,000. 
D)  $500 
A)  zero. 
B)  $2,000. 
C)  $1,000. 
D)  $500

Nonrivalry is a feature of

Nonexcludability is a feature of

-The figure above shows the marginal social costs (MSC), marginal private benefits (MB), and marginal social benefits (MSB) of university education in Inland. The efficient level of university enrolment in Inland is

The benefit from an additional unit of a good or service that the consumer of that good or service receives is the

A movie shown on a pay- per- view cable television channel is an example of

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defence satellites, a public good. If the marginal social cost of a satellite is $54, the quantity of satellites provided by a competitive market is

Consider a market in which there is an external benefit. The inefficient market equilibrium is such that

Which of the following is the BEST example of a public good?

When consumption of a good is nonrival and nonexcludable, the good is a

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

Free riders are not a problem in the market for a private good because

A good which is nonrival and nonexcludable is

If it is impossible to prevent someone from benefiting from a good regardless of whether or not the person paid for it, then the good is

Which of the following does NOT contain an externality?

The external benefit of a good

Consider a market in which there is an external benefit. A private subsidy paid to producers can be used to arrive at the efficient market equilibrium because the subsidy will

Education at a private university is NOT a public good because it is

A political equilibrium can never be reached without voters, firms, politicians and

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defence satellites, a public good. What is the marginal benefit to society from the fourth satellite?

-In the above figure, if a subsidy is granted to producers that generates an efficient level of production, then the deadweight loss will be

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Economics of the Environment

Monopoly and Its Regulation

Economic Inequality

Consumer Choices and Constraints

Producer Choices and Constraints

Perfect Competition

Monopolistic Competition

Oligopoly Games and Strategy

Decisions in Factor Markets

Filters

Exam 8: Public Choices and Public Goods

Nonrivalry is a feature of

Nonexcludability is a feature of

-The figure above shows the marginal social costs (MSC), marginal private benefits (MB), and marginal social benefits (MSB) of university education in Inland. The efficient level of university enrolment in Inland is

The benefit from an additional unit of a good or service that the consumer of that good or service receives is the

A movie shown on a pay- per- view cable television channel is an example of

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defence satellites, a public good. If the marginal social cost of a satellite is $54, the quantity of satellites provided by a competitive market is

Consider a market in which there is an external benefit. The inefficient market equilibrium is such that

Which of the following is the BEST example of a public good?

When consumption of a good is nonrival and nonexcludable, the good is a

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

Free riders are not a problem in the market for a private good because

A good which is nonrival and nonexcludable is

If it is impossible to prevent someone from benefiting from a good regardless of whether or not the person paid for it, then the good is

Which of the following does NOT contain an externality?

The external benefit of a good

Consider a market in which there is an external benefit. A private subsidy paid to producers can be used to arrive at the efficient market equilibrium because the subsidy will

Education at a private university is NOT a public good because it is

A political equilibrium can never be reached without voters, firms, politicians and

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defence satellites, a public good. What is the marginal benefit to society from the fourth satellite?

-In the above figure, if a subsidy is granted to producers that generates an efficient level of production, then the deadweight loss will be

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Economics of the Environment

Monopoly and Its Regulation

Economic Inequality

Consumer Choices and Constraints

Producer Choices and Constraints

Perfect Competition

Monopolistic Competition

Oligopoly Games and Strategy

Decisions in Factor Markets

Filters