Question 1

If the government assigns private property rights to a common resource,then the

Accepted Answer

A)  resource is under-utilized. 
B)  marginal private cost becomes equal to the marginal social cost. 
C)  government needs to set a quota to achieve efficiency. 
D)  resource becomes subject to the free riding problem. 
E)  resource cannot be utilized. 
A)  resource is under-utilized. 
B)  marginal private cost becomes equal to the marginal social cost. 
C)  government needs to set a quota to achieve efficiency. 
D)  resource becomes subject to the free riding problem. 
E)  resource cannot be utilized.

Question 2

Is a sailboat purchased in Victoria,British Columbia,a private good or a public good?

Accepted Answer

The sailboat is a private good.The sailb

Question 3

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

Accepted Answer

A)  rival 
B)  nonrival 
C)  nonexcludable 
D)  rival and nonexcludable 
E)  quasi public/quasi private 
A)  rival 
B)  nonrival 
C)  nonexcludable 
D)  rival and nonexcludable 
E)  quasi public/quasi private

Question 4

Which of the following can bring about an efficient level of public goods being provided by the government?

Accepted Answer

A)  voters who do not care about benefits and costs of public goods 
B)  rational ignorance on the part of voters 
C)  competition between political parties trying to win an election 
D)  self interest among government bureaucrats 
E)  free riding on the part of voters 
A)  voters who do not care about benefits and costs of public goods 
B)  rational ignorance on the part of voters 
C)  competition between political parties trying to win an election 
D)  self interest among government bureaucrats 
E)  free riding on the part of voters

Question 5

A good that can be consumed even if the consumer does not pay for it

Accepted Answer

A)  is necessarily rival in consumption. 
B)  completely avoids the free rider problem. 
C)  does not exist because firms won't produce goods for which consumers won't pay. 
D)  is nonexcludable. 
E)  might be nonexcludable but is definitely nonrival. 
A)  is necessarily rival in consumption. 
B)  completely avoids the free rider problem. 
C)  does not exist because firms won't produce goods for which consumers won't pay. 
D)  is nonexcludable. 
E)  might be nonexcludable but is definitely nonrival.

Question 6

When two competitors try to make themselves identical,they are

Accepted Answer

A)  appealing to rational ignorance. 
B)  trying to appeal to a maximum number of customers. 
C)  carrying out the principle of minimum differentiation. 
D)  Both answers B and C are correct. 
E)  Both answers A and B are correct. 
A)  appealing to rational ignorance. 
B)  trying to appeal to a maximum number of customers. 
C)  carrying out the principle of minimum differentiation. 
D)  Both answers B and C are correct. 
E)  Both answers A and B are correct.

Question 7

To hunters,deer in the woods are an example of a

Accepted Answer

A)  public good. 
B)  private good. 
C)  common resource. 
D)  public resource. 
E)  natural monopoly. 
A)  public good. 
B)  private good. 
C)  common resource. 
D)  public resource. 
E)  natural monopoly.

Question 8

The marginal benefit of a public good is the

Accepted Answer

A)  sum of the marginal benefits of all the individuals at each quantity. 
B)  marginal benefit of the individual person who places the lowest value on the good, multiplied by the number of people in the economy. 
C)  marginal benefit of the individual person who places the highest value on the good, multiplied by the number of people in the economy. 
D)  benefit of the last person's consumption. 
E)  average of the marginal benefits of all the individuals at each quantity. 
A)  sum of the marginal benefits of all the individuals at each quantity. 
B)  marginal benefit of the individual person who places the lowest value on the good, multiplied by the number of people in the economy. 
C)  marginal benefit of the individual person who places the highest value on the good, multiplied by the number of people in the economy. 
D)  benefit of the last person's consumption. 
E)  average of the marginal benefits of all the individuals at each quantity.

Question 9

A few years back,The Wall Street Journal reported that the government of Thailand "plans to launch a chain of more than 3,000 Thai restaurants world-wide over the next five years,with the largest number,more than 1,000,slated for the United States." The Thai government will have a 30 percent minority stake in the restaurants and the rest will be given to Thai owners.The country's deputy commerce minister explains that the government will play an active role in drawing up menus,making sure that genuine Thai food is served and ensuring that 70 percent of supplies for the restaurants are imported from Thailand.Because the Thai government will be part owner of these restaurants,are these restaurants public goods?

Accepted Answer

Although the government of Thailand has

Question 10

To find the economy's marginal benefit curve of a public good,we

Accepted Answer

A)  sum the marginal benefits of each individual at each quantity. 
B)  sum the costs of the inputs used to produce the good. 
C)  sum the quantities demanded at each individual price. 
D)  sum the prices consumers are willing to pay for different quantities of the good. 
E)  average the prices consumers are willing to pay for the same quantity of the good. 
A)  sum the marginal benefits of each individual at each quantity. 
B)  sum the costs of the inputs used to produce the good. 
C)  sum the quantities demanded at each individual price. 
D)  sum the prices consumers are willing to pay for different quantities of the good. 
E)  average the prices consumers are willing to pay for the same quantity of the good.

Question 11

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The efficient outcome is raising ________.

Accepted Answer

A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct. 
A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct.

Question 12

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

Accepted Answer

A)  rational exuberance. 
B)  irrational exuberance. 
C)  irrational intelligence. 
D)  rational ignorance. 
E)  the principle of minimum ignorance. 
A)  rational exuberance. 
B)  irrational exuberance. 
C)  irrational intelligence. 
D)  rational ignorance. 
E)  the principle of minimum ignorance.

Question 13

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,a private market will most likely produce

Accepted Answer

A)  no satellites because of the free-rider problem. 
B)  200 satellites because at this point marginal benefit equals marginal cost. 
C)  less than 200 satellites because over this output range marginal benefit exceeds marginal cost. 
D)  more than 200 satellites because over this output range marginal benefit is below marginal cost. 
E)  200 satellites because at this point the market will be in equilibrium. 
A)  no satellites because of the free-rider problem. 
B)  200 satellites because at this point marginal benefit equals marginal cost. 
C)  less than 200 satellites because over this output range marginal benefit exceeds marginal cost. 
D)  more than 200 satellites because over this output range marginal benefit is below marginal cost. 
E)  200 satellites because at this point the market will be in equilibrium.

Question 14

For a common resource,it is the case that

Accepted Answer

A)  MSC > MC 
B)  MSC  MB 
D)  MB > MSB 
A)  MSC > MC 
B)  MSC  MB 
D)  MB > MSB

Question 15

Inefficient overproduction of a public good by the government is

Accepted Answer

A)  the only efficient method of producing public goods. 
B)  not likely to occur when voters choose rational ignorance. 
C)  the term used to describe a surplus of a public good. 
D)  one explanation of why government might be large. 
E)  not likely to occur if voters are rationally ignorant. 
A)  the only efficient method of producing public goods. 
B)  not likely to occur when voters choose rational ignorance. 
C)  the term used to describe a surplus of a public good. 
D)  one explanation of why government might be large. 
E)  not likely to occur if voters are rationally ignorant.

Question 16

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________.

Accepted Answer

A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct. 
A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct.

Question 17

The free-rider problem exists because

Accepted Answer

A)  private goods or services cause some people to want to take them for free. 
B)  some goods or services are excludable and cause envy for those who don't have them. 
C)  some goods or services that are rival and leave some people without them. 
D)  people cannot be excluded from consuming public goods even if they don't pay for them. 
E)  people must all consume the same public good and so everyone wants to pay for it. 
A)  private goods or services cause some people to want to take them for free. 
B)  some goods or services are excludable and cause envy for those who don't have them. 
C)  some goods or services that are rival and leave some people without them. 
D)  people cannot be excluded from consuming public goods even if they don't pay for them. 
E)  people must all consume the same public good and so everyone wants to pay for it.

Question 18

A good is nonrival if

Accepted Answer

A)  only the government can produce it. 
B)  nobody can be excluded from enjoying the benefits of the good. 
C)  when you pay for the good, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, you have not decreased the amount left for consumption by other people. 
E)  anybody can be excluded from enjoying the benefits of the good. 
A)  only the government can produce it. 
B)  nobody can be excluded from enjoying the benefits of the good. 
C)  when you pay for the good, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, you have not decreased the amount left for consumption by other people. 
E)  anybody can be excluded from enjoying the benefits of the good.

Question 19

If we know everyone's individual marginal benefit curve for a public good,then the economy's marginal benefit curve for that public good can be found by

Accepted Answer

A)  finding the average of everyone's marginal benefit. 
B)  summing horizontally the amount of everyone's marginal benefit. 
C)  summing vertically the amount of everyone's marginal benefit. 
D)  averaging either horizontally or vertically the amount of everyone's marginal benefit. 
E)  none of the above; it is impossible to find this value. 
A)  finding the average of everyone's marginal benefit. 
B)  summing horizontally the amount of everyone's marginal benefit. 
C)  summing vertically the amount of everyone's marginal benefit. 
D)  averaging either horizontally or vertically the amount of everyone's marginal benefit. 
E)  none of the above; it is impossible to find this value.

Question 20

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

Accepted Answer

A)  maximum differentiation. 
B)  minimum differentiation. 
C)  minimum marginal utility. 
D)  maximum returns. 
E)  agreement. 
A)  maximum differentiation. 
B)  minimum differentiation. 
C)  minimum marginal utility. 
D)  maximum returns. 
E)  agreement.

If the government assigns private property rights to a common resource,then the

Is a sailboat purchased in Victoria,British Columbia,a private good or a public good?

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

Which of the following can bring about an efficient level of public goods being provided by the government?

A good that can be consumed even if the consumer does not pay for it

When two competitors try to make themselves identical,they are

To hunters,deer in the woods are an example of a

The marginal benefit of a public good is the

To find the economy's marginal benefit curve of a public good,we

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The efficient outcome is raising ________.

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

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,a private market will most likely produce

For a common resource,it is the case that

Inefficient overproduction of a public good by the government is

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________.

The free-rider problem exists because

A good is nonrival if

If we know everyone's individual marginal benefit curve for a public good,then the economy's marginal benefit curve for that public good can be found by

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

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

If the government assigns private property rights to a common resource,then the

Is a sailboat purchased in Victoria,British Columbia,a private good or a public good?

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

Which of the following can bring about an efficient level of public goods being provided by the government?

A good that can be consumed even if the consumer does not pay for it

When two competitors try to make themselves identical,they are

To hunters,deer in the woods are an example of a

The marginal benefit of a public good is the

To find the economy's marginal benefit curve of a public good,we

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The efficient outcome is raising ________.

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

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,a private market will most likely produce

For a common resource,it is the case that

Inefficient overproduction of a public good by the government is

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________.

The free-rider problem exists because

A good is nonrival if

If we know everyone's individual marginal benefit curve for a public good,then the economy's marginal benefit curve for that public good can be found by

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

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