Question 1

Competition between two political parties will cause those parties to propose policies

Accepted Answer

A) that are quite different. 
B) that are quite similar. 
C) of rational ignorance. 
D) that reduce the well-being of middle-income families and increasing the well-being of the rich and the poor. 
E) that equate total costs and total benefits. 
A) that are quite different. 
B) that are quite similar. 
C) of rational ignorance. 
D) that reduce the well-being of middle-income families and increasing the well-being of the rich and the poor. 
E) that equate total costs and total benefits.

Question 2

Which one of the following goods is excludable?

Accepted Answer

A) a city bus 
B) a bridge that does not charge a toll 
C) the atmosphere 
D) protection from the police force 
E) air traffic control 
A) a city bus 
B) a bridge that does not charge a toll 
C) the atmosphere 
D) protection from the police force 
E) air traffic control

Question 3

In the equilibrium for a common resource with no government regulation,

Accepted Answer

A) marginal social benefit is greater than marginal social cost. 
B) marginal social benefit equals marginal social cost. 
C) marginal social benefit is less than marginal cost. 
D) marginal social benefit is greater than marginal cost. 
E) marginal social benefit equals marginal cost. 
A) marginal social benefit is greater than marginal social cost. 
B) marginal social benefit equals marginal social cost. 
C) marginal social benefit is less than marginal cost. 
D) marginal social benefit is greater than marginal cost. 
E) marginal social benefit equals marginal cost.

Question 4

A Big Mac is

Accepted Answer

A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good in North America but a natural monopoly good in other countries. 
A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good in North America but a natural monopoly good in other countries.

Question 5

Which one of the following goods is nonexcludable?

Accepted Answer

A) a taxi 
B) a toll bridge 
C) the atmosphere 
D) an art museum 
E) cable TV 
A) a taxi 
B) a toll bridge 
C) the atmosphere 
D) an art museum 
E) cable TV

Question 6

Which one of the following goods exhibits nonexcludability?

Accepted Answer

A) a cheeseburger 
B) the Internet 
C) rides on the U.S. Space Shuttle 
D) cable TV 
E) air traffic control 
A) a cheeseburger 
B) the Internet 
C) rides on the U.S. Space Shuttle 
D) cable TV 
E) air traffic control

Question 7

If voters are rationally ignorant, the quantity of national defence provided by the government will be

Accepted Answer

A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the quantity that maximizes the budget of the Department of National Defence. 
E) both A and D are correct. 
A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the quantity that maximizes the budget of the Department of National Defence. 
E) both A and D are correct.

Question 8

Public choice theory predicts that government

Accepted Answer

A) acts to promote the redistribution of wealth and income. 
B) acts to maximize the amount of campaign contributions. 
C) acts to eliminate waste and promote an efficient allocation of resources. 
D) makes choices that result in efficient provision of public goods. 
E) makes choices that result in inefficient overprovision of public goods. 
A) acts to promote the redistribution of wealth and income. 
B) acts to maximize the amount of campaign contributions. 
C) acts to eliminate waste and promote an efficient allocation of resources. 
D) makes choices that result in efficient provision of public goods. 
E) makes choices that result in inefficient overprovision of public goods.

Question 9

Use the figure below to answer the following questions.
   
Figure 17.2.1
-Refer to Figure 17.2.1.Curve MBA is Andrew's marginal benefit curve for a public good and curve MBB is Betty's marginal benefit curve for the same public good.If Andrew and Betty are the only two consumers in the economy, which point would be on the economy's marginal social benefit curve?

Accepted Answer

A) price of $20, quantity of 3 
B) price of $20, quantity of 4 
C) price of $10, quantity of 4 
D) price of $30, quantity of 0 
E) price of $60, quantity of 1 
A) price of $20, quantity of 3 
B) price of $20, quantity of 4 
C) price of $10, quantity of 4 
D) price of $30, quantity of 0 
E) price of $60, quantity of 1

Question 10

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

Accepted Answer

A) $30 
B) $195 
C) $15 
D) $80 
E) $65 
A) $30 
B) $195 
C) $15 
D) $80 
E) $65

Question 11

The marginal social benefit curve for a public good is derived by

Accepted Answer

A) adding the marginal benefits of all individuals at each quantity. 
B) adding the quantities demanded by all individuals at each price. 
C) surveying consumers and asking how much they use a certain good or service. 
D) adding the total benefits for all consumers for a given quantity of the good. 
E) finding the maximum amount someone is willing to pay for one more unit of the good. 
A) adding the marginal benefits of all individuals at each quantity. 
B) adding the quantities demanded by all individuals at each price. 
C) surveying consumers and asking how much they use a certain good or service. 
D) adding the total benefits for all consumers for a given quantity of the good. 
E) finding the maximum amount someone is willing to pay for one more unit of the good.

Question 12

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

Accepted Answer

A) all the individuals can consume the same unit of the good. 
B) the government can supply a public good at a lower cost than can a private supplier. 
C) more than one supplier can provide the good. 
D) the same unit of the good cannot be simultaneously shared by more than one person at a time. 
E) demand for a public good is perfectly elastic. 
A) all the individuals can consume the same unit of the good. 
B) the government can supply a public good at a lower cost than can a private supplier. 
C) more than one supplier can provide the good. 
D) the same unit of the good cannot be simultaneously shared by more than one person at a time. 
E) demand for a public good is perfectly elastic.

Question 13

Sustainable production is

Accepted Answer

A) the rate of production that can be maintained indefinitely. 
B) the production output with the lowest average total cost. 
C) the production output where MC = ATC. 
D) the rate of production that maximizes marginal private benefit. 
E) the rate of production where MB = MC. 
A) the rate of production that can be maintained indefinitely. 
B) the production output with the lowest average total cost. 
C) the production output where MC = ATC. 
D) the rate of production that maximizes marginal private benefit. 
E) the rate of production where MB = MC.

Question 14

An individual transferable quota is a production limit that

Accepted Answer

A) has a price equal to marginal cost. 
B) is assigned to every producer in the industry at a predetermined price. 
C) is assigned to an individual who must transfer the quota to anyone the government assigns. 
D) is assigned to an individual who is free to transfer the quota to someone else. 
E) has a price equal to marginal benefit. 
A) has a price equal to marginal cost. 
B) is assigned to every producer in the industry at a predetermined price. 
C) is assigned to an individual who must transfer the quota to anyone the government assigns. 
D) is assigned to an individual who is free to transfer the quota to someone else. 
E) has a price equal to marginal benefit.

Question 15

Rational ignorance suggests that voters will

Accepted Answer

A) understand defence technology before voting for defence policy. 
B) understand the auditing procedures of the Canada Revenue Agency before voting for tax reform. 
C) understand the chemistry of the atmosphere before voting for a clean-air act. 
D) vote without complete information on many issues. 
E) vote based on their complete trust in politicians and bureaucrats. 
A) understand defence technology before voting for defence policy. 
B) understand the auditing procedures of the Canada Revenue Agency before voting for tax reform. 
C) understand the chemistry of the atmosphere before voting for a clean-air act. 
D) vote without complete information on many issues. 
E) vote based on their complete trust in politicians and bureaucrats.

Question 16

When a production quota is used to remedy the problem of the commons, then

Accepted Answer

A) the production quota is set so that use of the resource is where marginal private benefit equals marginal cost. 
B) the production quota is set so that use of the resource is where marginal private benefit equals marginal social benefit. 
C) the market equilibrium, but not the efficient outcome, is achieved. 
D) all users of the resource have an incentive to cheat on the production quota. 
E) the production quota is set so that marginal social benefit is maximized. 
A) the production quota is set so that use of the resource is where marginal private benefit equals marginal cost. 
B) the production quota is set so that use of the resource is where marginal private benefit equals marginal social benefit. 
C) the market equilibrium, but not the efficient outcome, is achieved. 
D) all users of the resource have an incentive to cheat on the production quota. 
E) the production quota is set so that marginal social benefit is maximized.

Question 17

Use the table below to answer the following questions.
Table 17.2.1
  
-In Table 17.2.1, which one of the proposals will have the least support?

Accepted Answer

A) Current income distribution 
B) Proposal A 
C) Proposal B 
D) Proposal C 
E) Proposal A or C 
A) Current income distribution 
B) Proposal A 
C) Proposal B 
D) Proposal C 
E) Proposal A or C

Question 18

Use the figure below to answer the following questions.
   
Figure 17.3.1
-Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The efficient quantity is

Accepted Answer

A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week. 
A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week.

Question 19

The air in the atmosphere is

Accepted Answer

A) nonrival and nonexcludable. 
B) rival and nonexcludable. 
C) nonrival and excludable. 
D) rival and excludable. 
E) a private good. 
A) nonrival and nonexcludable. 
B) rival and nonexcludable. 
C) nonrival and excludable. 
D) rival and excludable. 
E) a private good.

Question 20

Use the figure below to answer the following questions.
   
Figure 17.3.1
-Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.A quota that results in the common resource being used efficiently is set at

Accepted Answer

A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week. 
A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week.

Competition between two political parties will cause those parties to propose policies

Which one of the following goods is excludable?

In the equilibrium for a common resource with no government regulation,

A Big Mac is

Which one of the following goods is nonexcludable?

Which one of the following goods exhibits nonexcludability?

If voters are rationally ignorant, the quantity of national defence provided by the government will be

Public choice theory predicts that government

The marginal social benefit curve for a public good is derived by

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

Sustainable production is

An individual transferable quota is a production limit that

Rational ignorance suggests that voters will

When a production quota is used to remedy the problem of the commons, then

Use the table below to answer the following questions. Table 17.2.1 -In Table 17.2.1, which one of the proposals will have the least support?

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The efficient quantity is

The air in the atmosphere is

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.A quota that results in the common resource being used efficiently is set at

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Filters

Exam 17: Public Goods and Common Resources

Competition between two political parties will cause those parties to propose policies

Which one of the following goods is excludable?

In the equilibrium for a common resource with no government regulation,

A Big Mac is

Which one of the following goods is nonexcludable?

Which one of the following goods exhibits nonexcludability?

If voters are rationally ignorant, the quantity of national defence provided by the government will be

Public choice theory predicts that government

The marginal social benefit curve for a public good is derived by

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

Sustainable production is

An individual transferable quota is a production limit that

Rational ignorance suggests that voters will

When a production quota is used to remedy the problem of the commons, then

Use the table below to answer the following questions. Table 17.2.1 -In Table 17.2.1, which one of the proposals will have the least support?

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The efficient quantity is

The air in the atmosphere is

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.A quota that results in the common resource being used efficiently is set at

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Filters