Question 1

A public good is:

Accepted Answer

A) A good that is both rival and excludable. 
B) A good that is rival and non-excludable. 
C) A good that is non-excludable and non-rival. 
D) A good that is both excludable and non-rival. 
E) Any good provided by the government. 
A) A good that is both rival and excludable. 
B) A good that is rival and non-excludable. 
C) A good that is non-excludable and non-rival. 
D) A good that is both excludable and non-rival. 
E) Any good provided by the government. C

Question 2

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is the efficient level of output?

Accepted Answer

A) 0 
B) 10 
C) 20 
D) 40 
E) 5 
A) 0 
B) 10 
C) 20 
D) 40 
E) 5 B

Question 3

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is DWL in the market outcome?

Accepted Answer

A) 10 
B) 20 
C) 30 
D) 40 
E) 50 
A) 10 
B) 20 
C) 30 
D) 40 
E) 50 E

Question 4

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MBT) for the public good?

Accepted Answer

A) MBT = 10 - 3q 
B) MBT =30- 3q 
C) MBT =10 - 1/3.q 
D) MBT =30 - 1/3q 
E) None of the above. 
A) MBT = 10 - 3q 
B) MBT =30- 3q 
C) MBT =10 - 1/3.q 
D) MBT =30 - 1/3q 
E) None of the above.

Question 5

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.The marginal cost of providing the good is $10 per unit.How many units are supplied in the private-sector market?

Accepted Answer

A) 0 
B) 10 
C) 20 
D) 40 
E) 5 
A) 0 
B) 10 
C) 20 
D) 40 
E) 5

Question 6

An inefficiency can arise in the provision of public good:

Accepted Answer

A) Because the good is non-rival. 
B) As a private sector firm cannot enforcement payment for the good. 
C) Because the marginal benefit curve for society is the vertical summation of individual MB curves. 
D) a and C 
A) Because the good is non-rival. 
B) As a private sector firm cannot enforcement payment for the good. 
C) Because the marginal benefit curve for society is the vertical summation of individual MB curves. 
D) a and C

Question 7

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $15 per unit, what is the efficient level of output?

Accepted Answer

A) 30 
B) 20 
C) 10 
D) 5 
E) 15 
A) 30 
B) 20 
C) 10 
D) 5 
E) 15

Question 8

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MBT) for the public good?

Accepted Answer

A) MBT = 10 - q 
B) MBT =40- 2q 
C) MBT =40 - q 
D) MBT =20 - 1/2q 
E) None of the above. 
A) MBT = 10 - q 
B) MBT =40- 2q 
C) MBT =40 - q 
D) MBT =20 - 1/2q 
E) None of the above.

Question 9

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $0 per unit, what is the DWL arising in the market outcome?

Accepted Answer

A) DWL = $150 
B) DWL = $75 
C) DWL = $50 
D) DWL = $300 
E) DWL = $200 
A) DWL = $150 
B) DWL = $75 
C) DWL = $50 
D) DWL = $300 
E) DWL = $200

Question 10

The tragedy of the common arises when:

Accepted Answer

A) A good is rival but non-excludable. 
B) Property rights can be used to allocate good or services via the price mechanism. 
C) A good is non-rival and non-excludable. 
D) A good is rival but non-excludable 
E) None of the above. 
A) A good is rival but non-excludable. 
B) Property rights can be used to allocate good or services via the price mechanism. 
C) A good is non-rival and non-excludable. 
D) A good is rival but non-excludable 
E) None of the above.

A public good is:

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is the efficient level of output?

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is DWL in the market outcome?

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MB_T) for the public good?

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.The marginal cost of providing the good is $10 per unit.How many units are supplied in the private-sector market?

An inefficiency can arise in the provision of public good:

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $15 per unit, what is the efficient level of output?

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MB_T) for the public good?

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $0 per unit, what is the DWL arising in the market outcome?

The tragedy of the common arises when:

Key Economic Concepts

Key Mathematical Tools

Key Strategic Tools

Trade and the Ppf

Bargaining

Demand

Production and Costs

Supply

Equilibrium and Welfare

Elasticity

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Price Regulation, Taxes and Subsidies

Externalities

The Theory of Second Best

International Trade

Filters

Exam 17: Public Goods and Common Resources

A public good is:

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is the efficient level of output?

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is DWL in the market outcome?

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MBT) for the public good?

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.The marginal cost of providing the good is $10 per unit.How many units are supplied in the private-sector market?

An inefficiency can arise in the provision of public good:

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $15 per unit, what is the efficient level of output?

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MBT) for the public good?

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $0 per unit, what is the DWL arising in the market outcome?

The tragedy of the common arises when:

Key Economic Concepts

Key Mathematical Tools

Key Strategic Tools

Trade and the Ppf

Bargaining

Demand

Production and Costs

Supply

Equilibrium and Welfare

Elasticity

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Price Regulation, Taxes and Subsidies

Externalities

The Theory of Second Best

International Trade

Filters

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MB_T) for the public good?

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MB_T) for the public good?