Exam 8: Public Choices and Public Goods

"I know that my vote alone will not influence whether or not any new foreign trade legislation is enacted, so I have decided not to spend the time learning about various legislative proposals." This quote reflects an example of

The free- rider problem is the inability of private markets to achieve the efficient level of production of

-If the government regulates the market in the above figure in a way to achieve efficiency, then _______ Vaccinations will be produced and consumed.

John receives a marginal benefit of $80 from one missile (a public good). Nick receives a marginal benefit of $50 from one missile. Christina receives a marginal benefit of $65 from one missile. John, Nick and Christina are the only people in the economy. What is the economy's marginal social benefit from one missile?

What are the two features of a public good?

A common resource is _______ and _______.

A public choice 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. If the marginal cost of a lamp is 13, what is the efficient number of lamps for the roommates to purchase?

Public goods are

Most governments subsidise basic education because

-The figure above illustrates the marginal benefit and marginal cost of different quantities of national defence. What is the political equilibrium if voters are well- informed?