Question 1

Which of the following is a source of information that helps consumers acquire information about the quality of a good or service?

Accepted Answer

A)  brand names 
B)  franchising 
C)  consumer ratings magazines 
D)  all of the above 
A)  brand names 
B)  franchising 
C)  consumer ratings magazines 
D)  all of the above

Question 2

Figure 5-4  
Refer to Figure 5-4. The inefficient equilibrium price and quantity are

Accepted Answer

A)  $1.90 and 38 units, respectively. 
B)  $1.80 and 35 units, respectively. 
C)  $1.60 and 42 units, respectively. 
D)  $1.35 and 58 units, respectively. 
A)  $1.90 and 38 units, respectively. 
B)  $1.80 and 35 units, respectively. 
C)  $1.60 and 42 units, respectively. 
D)  $1.35 and 58 units, respectively.

Question 3

Which of the following correctly describes an external benefit resulting from an individual's purchase of a winter flu shot?

Accepted Answer

A)  The flu shot is cheaper than the cost of treatment when you get the flu. 
B)  The income of doctors increases when you get the flu shot. 
C)  The flu shot reduces the likelihood of others catching the flu. 
D)  The flu shot reduces the likelihood you will miss work as the result of sickness; therefore, you will earn more income. 
A)  The flu shot is cheaper than the cost of treatment when you get the flu. 
B)  The income of doctors increases when you get the flu shot. 
C)  The flu shot reduces the likelihood of others catching the flu. 
D)  The flu shot reduces the likelihood you will miss work as the result of sickness; therefore, you will earn more income.

Question 4

A good for which it is impossible or at least very costly to exclude nonpaying customers from receiving the good and for which many individuals can share in the consumption of the same unit of the good is called a

Accepted Answer

A)  public good. 
B)  joint good. 
C)  excludable good. 
D)  national good. 
A)  public good. 
B)  joint good. 
C)  excludable good. 
D)  national good.

Question 5

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 6

Markets fail to allocate resources efficiently when

Accepted Answer

A)  prices fluctuate. 
B)  people who have property rights abuse their privileges. 
C)  property rights are poorly enforced or not well established. 
D)  the government refuses to intervene in private markets. 
A)  prices fluctuate. 
B)  people who have property rights abuse their privileges. 
C)  property rights are poorly enforced or not well established. 
D)  the government refuses to intervene in private markets.

Question 7

The problem created when it is difficult to exclude nonpaying customers is called the

Accepted Answer

A)  consumption-payment link problem. 
B)  free-rider problem. 
C)  public sector dilemma. 
D)  asymmetric information problem. 
A)  consumption-payment link problem. 
B)  free-rider problem. 
C)  public sector dilemma. 
D)  asymmetric information problem.

Question 8

Which of the following is most likely to lead to the underpricing and overuse of an economic resource?

Accepted Answer

A)  Human greed and selfishness. 
B)  Capital markets. 
C)  The absence of an enforceable property right. 
D)  The lack of understanding of pollution and its effects. 
A)  Human greed and selfishness. 
B)  Capital markets. 
C)  The absence of an enforceable property right. 
D)  The lack of understanding of pollution and its effects.

Which of the following is a source of information that helps consumers acquire information about the quality of a good or service?

Figure 5-4 Refer to Figure 5-4. The inefficient equilibrium price and quantity are

Which of the following correctly describes an external benefit resulting from an individual's purchase of a winter flu shot?

A good for which it is impossible or at least very costly to exclude nonpaying customers from receiving the good and for which many individuals can share in the consumption of the same unit of the good is called a

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

Markets fail to allocate resources efficiently when

The problem created when it is difficult to exclude nonpaying customers is called the

Which of the following is most likely to lead to the underpricing and overuse of an economic resource?

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

Applying the Basics: Special Topics in Economics

Filters

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

Which of the following is a source of information that helps consumers acquire information about the quality of a good or service?

Figure 5-4 Refer to Figure 5-4. The inefficient equilibrium price and quantity are

Which of the following correctly describes an external benefit resulting from an individual's purchase of a winter flu shot?

A good for which it is impossible or at least very costly to exclude nonpaying customers from receiving the good and for which many individuals can share in the consumption of the same unit of the good is called a

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

Markets fail to allocate resources efficiently when

The problem created when it is difficult to exclude nonpaying customers is called the

Which of the following is most likely to lead to the underpricing and overuse of an economic resource?

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

Applying the Basics: Special Topics in Economics

Filters