Question 1

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Accepted Answer

The free-rider problem occurs when peopl

Question 2

In politics,the principle of minimum differentiation is the tendency toward

Accepted Answer

A)  identical policies to appeal to a minimum number of people. 
B)  different policies to appeal to a maximum number of people. 
C)  identical policies to appeal to a maximum number of people. 
D)  different policies to appeal to a minimum number of people. 
E)  a minimum number of policies in order to appeal to a maximum number of people. 
A)  identical policies to appeal to a minimum number of people. 
B)  different policies to appeal to a maximum number of people. 
C)  identical policies to appeal to a maximum number of people. 
D)  different policies to appeal to a minimum number of people. 
E)  a minimum number of policies in order to appeal to a maximum number of people.

Question 3

A good is rival if

Accepted Answer

A)  it has substitutes. 
B)  it can be consumed by many people simultaneously. 
C)  it is excludable. 
D)  consumption by one person decreases the quantity available for another person. 
E)  it has no complements. 
A)  it has substitutes. 
B)  it can be consumed by many people simultaneously. 
C)  it is excludable. 
D)  consumption by one person decreases the quantity available for another person. 
E)  it has no complements.

Question 4

When someone enjoys the benefit of a good or service but does not pay for it,that person

Accepted Answer

A)  is a free range consumer. 
B)  is a free rider. 
C)  receives no marginal benefit from the good. 
D)  must be consuming an excludable good. 
E)  is contributing to the tragedy of the commons. 
A)  is a free range consumer. 
B)  is a free rider. 
C)  receives no marginal benefit from the good. 
D)  must be consuming an excludable good. 
E)  is contributing to the tragedy of the commons.

Question 5

The marginal benefit curve of a public good

Accepted Answer

A)  slopes downward. 
B)  slopes upward. 
C)  is vertical. 
D)  is horizontal. 
E)  is U-shaped. 
A)  slopes downward. 
B)  slopes upward. 
C)  is vertical. 
D)  is horizontal. 
E)  is U-shaped.

Question 6

What is the free-rider problem and with what is it associated?

Accepted Answer

The free-rider problem is associated wit

Question 7

The free-rider problem
i.means that people can consume a good without paying for it.
ii.means that people pay too much for a good in order to consume it.
iii.applies to a public good.

Accepted Answer

A)  i only 
B)  iii only 
C)  i and ii 
D)  ii and iii 
E)  i and iii 
A)  i only 
B)  iii only 
C)  i and ii 
D)  ii and iii 
E)  i and iii

Question 8

A good or resource is excludable if

Accepted Answer

A)  only the government can produce them. 
B)  nobody can be excluded from enjoying the benefits of the good or resource. 
C)  when you pay for the good or resource, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, that means there is one less for someone else. 
E)  it is a common resource. 
A)  only the government can produce them. 
B)  nobody can be excluded from enjoying the benefits of the good or resource. 
C)  when you pay for the good or resource, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, that means there is one less for someone else. 
E)  it is a common resource.

Question 9

The figure above shows the marginal benefit curve (MB) and marginal cost curve (MC) of surveillance satellites that provide national defense services.
-In the figure above,the efficient quantity of satellites to produce is

Accepted Answer

A)  200, because this is where marginal benefit equals marginal cost. 
B)  200, because this is where the market is in equilibrium. 
C)  anywhere below 200, i.e. where marginal benefit exceeds marginal cost. 
D)  anywhere above 200, i.e. where marginal benefit is below marginal cost. 
E)  zero, because no one is willing to pay for satellites. 
A)  200, because this is where marginal benefit equals marginal cost. 
B)  200, because this is where the market is in equilibrium. 
C)  anywhere below 200, i.e. where marginal benefit exceeds marginal cost. 
D)  anywhere above 200, i.e. where marginal benefit is below marginal cost. 
E)  zero, because no one is willing to pay for satellites.

Question 10

Which of the following can be rival and excludable?
i.a good
ii.a service
iii.a resource

Accepted Answer

A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  i, ii and iii 
E)  only i 
A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  i, ii and iii 
E)  only i

Question 11

Public goods create a free-rider problem because

Accepted Answer

A)  only people who pay for the good or service can enjoy the good or service. 
B)  people do not want to consume public goods. 
C)  the good or service is rival in nature. 
D)  the good or service is excludable. 
E)  people can enjoy the good or service no matter whether or not they pay for it. 
A)  only people who pay for the good or service can enjoy the good or service. 
B)  people do not want to consume public goods. 
C)  the good or service is rival in nature. 
D)  the good or service is excludable. 
E)  people can enjoy the good or service no matter whether or not they pay for it.

Question 12

-Paul and Paula are the only members of society.The table above gives their marginal benefits from missile gunboats,a public good.Determine the marginal benefit to society of the second missile gunboat.

Accepted Answer

A)  $16 million 
B)  $8 million 
C)  $12 million 
D)  $10 million 
E)  $4 million 
A)  $16 million 
B)  $8 million 
C)  $12 million 
D)  $10 million 
E)  $4 million

Question 13

The tragedy of the commons is the absence of incentives to

Accepted Answer

A)  correctly measure the marginal benefit. 
B)  prevent under use of the common resource. 
C)  prevent overuse and depletion of the common resource. 
D)  discover the resource. 
E)  prevent the free-rider problem. 
A)  correctly measure the marginal benefit. 
B)  prevent under use of the common resource. 
C)  prevent overuse and depletion of the common resource. 
D)  discover the resource. 
E)  prevent the free-rider problem.

Question 14

Because national defense is potentially subject to free riding,a private sector market for national defense would lead to

Accepted Answer

A)  the efficient amount of national defense if there is free riding. 
B)  more than the efficient amount being produced if there is free riding. 
C)  less than the efficient amount being produced if there is free riding. 
D)  less than the efficient amount being produced if there is not free riding. 
E)  None of the above answers is correct. 
A)  the efficient amount of national defense if there is free riding. 
B)  more than the efficient amount being produced if there is free riding. 
C)  less than the efficient amount being produced if there is free riding. 
D)  less than the efficient amount being produced if there is not free riding. 
E)  None of the above answers is correct.

Question 15

What are the differences between public goods and private goods?

Accepted Answer

Public goods are
.nonrival,which means t

Question 16

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference,why is there a difference? If there is not a difference,why is there not a difference?

Accepted Answer

The marginal social cost curve of a comm

Question 17

Which of the following is NOT a potential solution to the tragedy of the commons?

Accepted Answer

A)  Setting a production quota 
B)  Granting individual transferable quotas 
C)  Subsidizing use of the resource 
D)  Establishing property rights to the resource 
E)  None of the above are correct because they are all potential solutions to the tragedy of the commons. 
A)  Setting a production quota 
B)  Granting individual transferable quotas 
C)  Subsidizing use of the resource 
D)  Establishing property rights to the resource 
E)  None of the above are correct because they are all potential solutions to the tragedy of the commons.

Question 18

Which of the following describes the principle of minimum differentiation?

Accepted Answer

A)  competitors becoming identical to appeal to the largest number of clients or voters 
B)  minimizing the difference between marginal benefit and marginal cost 
C)  voters becoming highly informed to elect the best candidate 
D)  bureaucrats providing the most efficient level of pubic goods provision 
E)  minimizing the amount of free riding that occurs 
A)  competitors becoming identical to appeal to the largest number of clients or voters 
B)  minimizing the difference between marginal benefit and marginal cost 
C)  voters becoming highly informed to elect the best candidate 
D)  bureaucrats providing the most efficient level of pubic goods provision 
E)  minimizing the amount of free riding that occurs

Question 19

-The table above shows Anita and Steve's marginal benefits for the annual 4ᵗʰ of July fireworks show at City Park.If Anita and Steve are the only two people in the economy,what is the economy's marginal benefit from the 19ᵗʰ minute of fireworks?

Accepted Answer

A)  $38 
B)  $30 
C)  $162 
D)  $129 
E)  $33 
A)  $38 
B)  $30 
C)  $162 
D)  $129 
E)  $33

Question 20

-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers ,$300 per hour.The marginal social cost is twice the marginal private cost.With no government intervention,the equilibrium quantity of fish caught is ________ tons.

Accepted Answer

A)  100 
B)  200 
C)  300 
D)  400 
E)  500 
A)  100 
B)  200 
C)  300 
D)  400 
E)  500

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

In politics,the principle of minimum differentiation is the tendency toward

A good is rival if

When someone enjoys the benefit of a good or service but does not pay for it,that person

The marginal benefit curve of a public good

What is the free-rider problem and with what is it associated?

The free-rider problem i.means that people can consume a good without paying for it. ii.means that people pay too much for a good in order to consume it. iii.applies to a public good.

A good or resource is excludable if

The figure above shows the marginal benefit curve (MB) and marginal cost curve (MC) of surveillance satellites that provide national defense services. -In the figure above,the efficient quantity of satellites to produce is

Which of the following can be rival and excludable? i.a good ii.a service iii.a resource

Public goods create a free-rider problem because

-Paul and Paula are the only members of society.The table above gives their marginal benefits from missile gunboats,a public good.Determine the marginal benefit to society of the second missile gunboat.

The tragedy of the commons is the absence of incentives to

Because national defense is potentially subject to free riding,a private sector market for national defense would lead to

What are the differences between public goods and private goods?

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference,why is there a difference? If there is not a difference,why is there not a difference?

Which of the following is NOT a potential solution to the tragedy of the commons?

Which of the following describes the principle of minimum differentiation?

-The table above shows Anita and Steve's marginal benefits for the annual 4ᵗʰ of July fireworks show at City Park.If Anita and Steve are the only two people in the economy,what is the economy's marginal benefit from the 19ᵗʰ minute of fireworks?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Public Goods and Common Resources

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

In politics,the principle of minimum differentiation is the tendency toward

A good is rival if

When someone enjoys the benefit of a good or service but does not pay for it,that person

The marginal benefit curve of a public good

What is the free-rider problem and with what is it associated?

The free-rider problem i.means that people can consume a good without paying for it. ii.means that people pay too much for a good in order to consume it. iii.applies to a public good.

A good or resource is excludable if

The figure above shows the marginal benefit curve (MB) and marginal cost curve (MC) of surveillance satellites that provide national defense services. -In the figure above,the efficient quantity of satellites to produce is

Which of the following can be rival and excludable? i.a good ii.a service iii.a resource

Public goods create a free-rider problem because

-Paul and Paula are the only members of society.The table above gives their marginal benefits from missile gunboats,a public good.Determine the marginal benefit to society of the second missile gunboat.

The tragedy of the commons is the absence of incentives to

Because national defense is potentially subject to free riding,a private sector market for national defense would lead to

What are the differences between public goods and private goods?

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference,why is there a difference? If there is not a difference,why is there not a difference?

Which of the following is NOT a potential solution to the tragedy of the commons?

Which of the following describes the principle of minimum differentiation?

-The table above shows Anita and Steve's marginal benefits for the annual 4ᵗʰ of July fireworks show at City Park.If Anita and Steve are the only two people in the economy,what is the economy's marginal benefit from the 19ᵗʰ minute of fireworks?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters