Exam 4: Public Spending and Public Choice

The free-rider problem plagues public goods because

A subsidy is sometimes used by government to correct the problems associated with

If external benefits are taken into account in the market,

A lighthouse that serves a dangerous coastal area is built.The lighthouse cost $500,000 to build and serves 500 ships a month.If the shipping in the area increases so that 750 ships pass by a month,the increase in additional costs of providing the light to these new ships is

Public elementary and high school education in the United States is provided

Market failures occur when

-Refer to the above figure.Medicare subsidies have increased the price of medical services to $\mathrm { P } _ { \mathrm { s } }$ .The perceived price on the part of consumers is

Private schools are able to exclude students from attending classes they offer unless students have been accepted and paid tuition and fees.This suggests that education is

Which of the following is a government-inhibited good?

Which of the following is heavily subsidized by state and local governments?

Government payment of a per-unit subsidy for medical care causes the out-of-pocket price that consumers pay for care to be

When a paper producer pollutes the air,economists argue that there is

When an external cost exists in the production of a good,firms tend to

Public goods

Which of the following is NOT an example of a negative externality?

The Do-Good Company produces goods that provide benefits to society-at-large.If consumers of Do-Good's products fail to take external benefits into account,

When a business produces a product that creates external costs,

A fundamental reason that governments provide public goods is

Education in the United States is

Which of the following is NOT an example of a transfer payment?