Question 1

Very few voters know the enormous cost of providing price supports to farmers.As a result, these voters most likely exhibit

Accepted Answer

A) the public provision of a good. 
B) the principle of minimum differentiation. 
C) rational ignorance. 
D) the tragedy of the commons. 
E) None of the above answers is correct. 
A) the public provision of a good. 
B) the principle of minimum differentiation. 
C) rational ignorance. 
D) the tragedy of the commons. 
E) None of the above answers is correct.

Question 2

A private good is ________ and ________.

Accepted Answer

A) rival; excludable 
B) rival; nonexcludable 
C) nonrival; excludable 
D) nonrival; nonexcludable 
E) scarce; expensive 
A) rival; excludable 
B) rival; nonexcludable 
C) nonrival; excludable 
D) nonrival; nonexcludable 
E) scarce; expensive

Question 3

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

Accepted Answer

The statement is false.For bot

Question 4

One important feature that distinguishes a private good from a public good is that

Accepted Answer

A) only the government can produce private goods. 
B) nobody can be excluded from enjoying the benefits of a private good. 
C) a private good is excludable and a public good is nonexcludable. 
D) if you consume a unit of a private, that means there is no less for someone else. 
E) a private good is nonrival and a public good is rival. 
A) only the government can produce private goods. 
B) nobody can be excluded from enjoying the benefits of a private good. 
C) a private good is excludable and a public good is nonexcludable. 
D) if you consume a unit of a private, that means there is no less for someone else. 
E) a private good is nonrival and a public good is rival.

Question 5

A private good is

Accepted Answer

A) nonexcludable and nonrival. 
B) excludable and rival. 
C) excludable and nonrival. 
D) nonrival and excludable. 
E) subject to the free-riding problem. 
A) nonexcludable and nonrival. 
B) excludable and rival. 
C) excludable and nonrival. 
D) nonrival and excludable. 
E) subject to the free-riding problem.

Question 6

Suppose the marginal cost of the fourth unit of a public good is $20.If Mark and Judy are the only members of society, and they are willing to pay $10 and $11, respectively, for the fourth unit of the good, then the efficient quantity is

Accepted Answer

A) 3 units. 
B) 4 or more units. 
C) 0 units. 
D) More information is needed about the marginal benefits of the first, second, and third units of the public good. 
E) None of the above answers is correct. 
A) 3 units. 
B) 4 or more units. 
C) 0 units. 
D) More information is needed about the marginal benefits of the first, second, and third units of the public good. 
E) None of the above answers is correct.

Question 7

The market price of an individual transferable quota is equal to the

Accepted Answer

A) marginal private benefit. 
B) marginal social benefit. 
C) marginal private benefit minus the marginal cost. 
D) marginal social benefit minus the marginal cost. 
E) marginal private benefit plus the marginal cost. 
A) marginal private benefit. 
B) marginal social benefit. 
C) marginal private benefit minus the marginal cost. 
D) marginal social benefit minus the marginal cost. 
E) marginal private benefit plus the marginal cost.

Question 8

It is rational for a voter to be ignorant about an issue unless the

Accepted Answer

A) voter is maximizing his or her well-being. 
B) voter is a member of a political party. 
C) issue is on the ballot. 
D) issue has a perceptible effect on the voter's well-being. 
E) voter worries about the tragedy of the free rider. 
A) voter is maximizing his or her well-being. 
B) voter is a member of a political party. 
C) issue is on the ballot. 
D) issue has a perceptible effect on the voter's well-being. 
E) voter worries about the tragedy of the free rider.

Question 9

-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.Suppose the government assigns individual transferable quotas (ITQ)set to achieve the efficient outcome.The market price of an ITQ is ________ per pound.

Accepted Answer

A) $4.20 
B) $2.00 
C) $6.00 
D) $4.00 
E) $0.00 
A) $4.20 
B) $2.00 
C) $6.00 
D) $4.00 
E) $0.00

Question 10

A library is a public good.The marginal cost curve for libraries in Lafayette, California

Accepted Answer

A) has a negative slope. 
B) is definitely a horizontal line. 
C) has a positive slope. 
D) is a vertical line. 
E) is identical to the marginal benefit curve because libraries are nonrival. 
A) has a negative slope. 
B) is definitely a horizontal line. 
C) has a positive slope. 
D) is a vertical line. 
E) is identical to the marginal benefit curve because libraries are nonrival.

Question 11

What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?

Accepted Answer

A good is nonexcludable if it is impossi

Question 12

The principle of minimum differentiation describes a tendency of competitors to

Accepted Answer

A) lower price. 
B) offer similar products or policies. 
C) decrease the quantity of goods available. 
D) offer public goods for sale. 
E) free ride. 
A) lower price. 
B) offer similar products or policies. 
C) decrease the quantity of goods available. 
D) offer public goods for sale. 
E) free ride.

Question 13

Why are private firms unable to produce public goods?

Accepted Answer

A) Because the government outlaws private firms from producing them. 
B) The marginal cost of production is too high for private production to be possible. 
C) They can produce these goods but they would not earn any revenue because of the free-rider problem. 
D) The tragedy of the commons means that private firms produce an inefficient amount of public goods. 
E) None of the above answers is correct. 
A) Because the government outlaws private firms from producing them. 
B) The marginal cost of production is too high for private production to be possible. 
C) They can produce these goods but they would not earn any revenue because of the free-rider problem. 
D) The tragedy of the commons means that private firms produce an inefficient amount of public goods. 
E) None of the above answers is correct.

Question 14

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 15

A good or resource from which no one can be excluded and which is nonrival is a

Accepted Answer

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

Question 16

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 17

A public good

Accepted Answer

A) only yields benefits to those that decide to buy it. 
B) is the same as a common resource. 
C) is nonrival and nonexcludable. 
D) is rival. 
A) only yields benefits to those that decide to buy it. 
B) is the same as a common resource. 
C) is nonrival and nonexcludable. 
D) is rival.

Question 18

-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 and the marginal cost to produce one minute of fireworks is $28, what is the efficient quantity of fireworks?

Accepted Answer

A) 16 minutes 
B) More than 20 minutes 
C) 19 minutes 
D) Less than 16 minutes 
E) 20 minutes 
A) 16 minutes 
B) More than 20 minutes 
C) 19 minutes 
D) Less than 16 minutes 
E) 20 minutes

Question 19

Which of the following is the best example of a public good?

Accepted Answer

A) national defense 
B) a Ford Thunderbird 
C) Yosemite National Park 
D) a Mountain Dew 
E) satellite radio 
A) national defense 
B) a Ford Thunderbird 
C) Yosemite National Park 
D) a Mountain Dew 
E) satellite radio

Question 20

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

Very few voters know the enormous cost of providing price supports to farmers.As a result, these voters most likely exhibit

A private good is and .

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

One important feature that distinguishes a private good from a public good is that

A private good is

Suppose the marginal cost of the fourth unit of a public good is $20.If Mark and Judy are the only members of society, and they are willing to pay $10 and $11, respectively, for the fourth unit of the good, then the efficient quantity is

The market price of an individual transferable quota is equal to the

It is rational for a voter to be ignorant about an issue unless the

A library is a public good.The marginal cost curve for libraries in Lafayette, California

What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?

The principle of minimum differentiation describes a tendency of competitors to

Why are private firms unable to produce public goods?

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

A good or resource from which no one can be excluded and which is nonrival is a

When two competitors try to make themselves identical, they are

A public good

-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 and the marginal cost to produce one minute of fireworks is $28, what is the efficient quantity of fireworks?

Which of the following is the best example of a public good?

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

Very few voters know the enormous cost of providing price supports to farmers.As a result, these voters most likely exhibit

A private good is ________ and ________.

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

One important feature that distinguishes a private good from a public good is that

A private good is

Suppose the marginal cost of the fourth unit of a public good is $20.If Mark and Judy are the only members of society, and they are willing to pay $10 and $11, respectively, for the fourth unit of the good, then the efficient quantity is

The market price of an individual transferable quota is equal to the

It is rational for a voter to be ignorant about an issue unless the

A library is a public good.The marginal cost curve for libraries in Lafayette, California

What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?

The principle of minimum differentiation describes a tendency of competitors to

Why are private firms unable to produce public goods?

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

A good or resource from which no one can be excluded and which is nonrival is a

When two competitors try to make themselves identical, they are

A public good

-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 and the marginal cost to produce one minute of fireworks is $28, what is the efficient quantity of fireworks?

Which of the following is the best example of a public good?

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

A private good is and .