Question 1

Which of the following is best characterized as a public good?

Accepted Answer

A) A public library 
B) A church 
C) Primary education 
D) Police protection 
A) A public library 
B) A church 
C) Primary education 
D) Police protection

Question 2

All of the following are economic functions of the government EXCEPT

Accepted Answer

A) providing a legal system. 
B) determining the wage rate for most jobs. 
C) promoting competition in the market. 
D) providing public goods. 
A) providing a legal system. 
B) determining the wage rate for most jobs. 
C) promoting competition in the market. 
D) providing public goods.

Question 3

If a corporation were forced to absorb the cost of a spillover from the production of a good,this would likely cause the supply curve for the good to

Accepted Answer

A) shift out. 
B) shift to the left. 
C) shift to the right. 
D) None of the above are correct. 
A) shift out. 
B) shift to the left. 
C) shift to the right. 
D) None of the above are correct.

Question 4

Which of the following statements is NOT true about the price system?

Accepted Answer

A) The price system allows resources to flow from low-valued uses to high-valued uses. 
B) The price system encourages the production of public goods. 
C) Individuals have freedom to purchase what they want. 
D) The price system allows for economic efficiency. 
A) The price system allows resources to flow from low-valued uses to high-valued uses. 
B) The price system encourages the production of public goods. 
C) Individuals have freedom to purchase what they want. 
D) The price system allows for economic efficiency.

Question 5

In the United States,which of the following is an example of a government-inhibited good?

Accepted Answer

A) Museums 
B) Concerts 
C) Cigarettes 
D) Sports stadiums 
A) Museums 
B) Concerts 
C) Cigarettes 
D) Sports stadiums

Question 6

The market and public sector are similar in that

Accepted Answer

A) there is competition amongst the participants in both sectors. 
B) the resources used in both sectors are scarce. 
C) the participants in both sectors react to incentives. 
D) All of the above are true. 
A) there is competition amongst the participants in both sectors. 
B) the resources used in both sectors are scarce. 
C) the participants in both sectors react to incentives. 
D) All of the above are true.

Question 7

By definition,a government-sponsored good

Accepted Answer

A) is a good that is deemed socially desirable. 
B) is a good that should be available only to upper-income groups. 
C) is always provided at a zero price. 
D) does not affect society's general welfare. 
A) is a good that is deemed socially desirable. 
B) is a good that should be available only to upper-income groups. 
C) is always provided at a zero price. 
D) does not affect society's general welfare.

Question 8

Which of the following characterizes the largest difference between the way decisions are made in the private sector versus the public sector?

Accepted Answer

A) The incentive system for individuals to perform efficiently are vastly different. 
B) The workers themselves are really quite different types of people. 
C) In both sectors individuals will try to maximize their own individual gains over the gains of others. 
D) Costs and resources are vastly different in each sector. 
A) The incentive system for individuals to perform efficiently are vastly different. 
B) The workers themselves are really quite different types of people. 
C) In both sectors individuals will try to maximize their own individual gains over the gains of others. 
D) Costs and resources are vastly different in each sector.

Question 9

In which of the following ways is the private market sector similar to the public sector in terms of decision making?

Accepted Answer

A) Prices determine the demand for goods and services in each sector. 
B) There is competition for scarce resource in both sectors. 
C) Both sectors may use a type of "force" if necessary. 
D) Votes by individual voters are basically equal in importance with dollars spent by individuals on goods. 
A) Prices determine the demand for goods and services in each sector. 
B) There is competition for scarce resource in both sectors. 
C) Both sectors may use a type of "force" if necessary. 
D) Votes by individual voters are basically equal in importance with dollars spent by individuals on goods.

Question 10

The funds that polluters pay that gives them the right to discharge into the air or water a certain amount of pollution are

Accepted Answer

A) special subsidies. 
B) regulation fees. 
C) external costs. 
D) effluent fees. 
A) special subsidies. 
B) regulation fees. 
C) external costs. 
D) effluent fees.

Question 11

Explain why an external benefit leads to an under-allocation of resources to the production of a good.

Accepted Answer

An external benefit is the benefit assoc

Question 12

A shift from SS1U1B11S1U1B0 to SS1U1B12S1U1B0 reflects the change that happens when a negative externality is taken into account.A shift from DS1U1B11S1U1B0 to DS1U1B12S1U1B0 reflects the change that happens when a positive externality is taken into account.
-Refer to the above figures.Which of the panels would be consistent with the situation in which external costs exist?

Accepted Answer

A) Panel 1 
B) Panel 2 
C) Panels 1 and 2 
D) Neither panel 
A) Panel 1 
B) Panel 2 
C) Panels 1 and 2 
D) Neither panel

Question 13

Markets tend to underallocate resources to the production of a good when

Accepted Answer

A) there are negative externalities. 
B) there are positive externalities. 
C) there are public goods produced. 
D) equilibrium occurs. 
A) there are negative externalities. 
B) there are positive externalities. 
C) there are public goods produced. 
D) equilibrium occurs.

Question 14

A shift from SS1U1B11S1U1B0 to SS1U1B12S1U1B0 reflects the change that happens when a negative externality is taken into account.A shift from DS1U1B11S1U1B0 to DS1U1B12S1U1B0 reflects the change that happens when a positive externality is taken into account.
-Refer to the above figures.An external benefit exists.This will lead to a(n)

Accepted Answer

A) underproduction equal to $\mathrm { Q } _ { 1 }$ minus
$\mathrm { Q } _ { 2 }$ . 
B) overproduction equal to $\mathrm { Q } _ { 4 }$ minus
$\mathrm { Q } _ { 3 }$ . 
C) underproduction equal to $\mathrm { Q } _ { 4 }$ minus
$\mathrm { Q } _ { 3 }$ . 
D) overproduction equal to $\mathrm { Q } _ { 1 }$ minus
$\mathrm { Q } _ { 2 }$ . 
A) underproduction equal to $\mathrm { Q } _ { 1 }$ minus
$\mathrm { Q } _ { 2 }$ . 
B) overproduction equal to $\mathrm { Q } _ { 4 }$ minus
$\mathrm { Q } _ { 3 }$ . 
C) underproduction equal to $\mathrm { Q } _ { 4 }$ minus
$\mathrm { Q } _ { 3 }$ . 
D) overproduction equal to $\mathrm { Q } _ { 1 }$ minus
$\mathrm { Q } _ { 2 }$ .

Question 15

Social Security and Medicare are clear examples of

Accepted Answer

A) capitalism. 
B) market-determined services. 
C) market failures and externalities. 
D) governmental intervention in the market. 
A) capitalism. 
B) market-determined services. 
C) market failures and externalities. 
D) governmental intervention in the market.

Question 16

Why are public goods provided by the government,rather than by the private sector?

Accepted Answer

A) because they are large-scale projects that require the kind of financing only governments can generate through the issuance of bonds 
B) because it would be difficult for a private sector firm to make a profit providing a public good,since consumers who benefit would not have to pay for it 
C) because no one really benefits from public goods 
D) because private sector firms do not have the foresight to plan for public goods 
A) because they are large-scale projects that require the kind of financing only governments can generate through the issuance of bonds 
B) because it would be difficult for a private sector firm to make a profit providing a public good,since consumers who benefit would not have to pay for it 
C) because no one really benefits from public goods 
D) because private sector firms do not have the foresight to plan for public goods

Question 17

A government-inhibited good is one that

Accepted Answer

A) the political process has determined is socially undesirable. 
B) the political process has determined is socially desirable. 
C) freely competitive markets have determined is socially desirable. 
D) we want to encourage the consumption of. 
A) the political process has determined is socially undesirable. 
B) the political process has determined is socially desirable. 
C) freely competitive markets have determined is socially desirable. 
D) we want to encourage the consumption of.

Question 18

An example of a market failure is

Accepted Answer

A) a firm is dumping toxic waste that is making people sick. 
B) when not everyone who wants to see a major league football game can. 
C) when there is an increase in demand and a shortage develops. 
D) unemployment. 
A) a firm is dumping toxic waste that is making people sick. 
B) when not everyone who wants to see a major league football game can. 
C) when there is an increase in demand and a shortage develops. 
D) unemployment.

Question 19

Which event was most important in promoting the belief that the U.S.government should work to ensure economy-wide stability?

Accepted Answer

A) World War II 
B) The Civil Rights Movement 
C) The California Gold Rush 
D) The Great Depression 
A) World War II 
B) The Civil Rights Movement 
C) The California Gold Rush 
D) The Great Depression

Question 20

In the spring,I enjoy the fragrance coming from my neighbors' flowers.The fragrance is is an example of

Accepted Answer

A) a negative externality. 
B) a private good. 
C) the need for antitrust legislation. 
D) a free rider. 
A) a negative externality. 
B) a private good. 
C) the need for antitrust legislation. 
D) a free rider.

Which of the following is best characterized as a public good?

All of the following are economic functions of the government EXCEPT

If a corporation were forced to absorb the cost of a spillover from the production of a good,this would likely cause the supply curve for the good to

Which of the following statements is NOT true about the price system?

In the United States,which of the following is an example of a government-inhibited good?

The market and public sector are similar in that

By definition,a government-sponsored good

Which of the following characterizes the largest difference between the way decisions are made in the private sector versus the public sector?

In which of the following ways is the private market sector similar to the public sector in terms of decision making?

The funds that polluters pay that gives them the right to discharge into the air or water a certain amount of pollution are

Explain why an external benefit leads to an under-allocation of resources to the production of a good.

Markets tend to underallocate resources to the production of a good when

A shift from S₁ to S₂ reflects the change that happens when a negative externality is taken into account.A shift from D₁ to D₂ reflects the change that happens when a positive externality is taken into account. -Refer to the above figures.An external benefit exists.This will lead to a(n)

Social Security and Medicare are clear examples of

Why are public goods provided by the government,rather than by the private sector?

A government-inhibited good is one that

An example of a market failure is

Which event was most important in promoting the belief that the U.S.government should work to ensure economy-wide stability?

In the spring,I enjoy the fragrance coming from my neighbors' flowers.The fragrance is is an example of

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 4: Public Spending and Public Choice

Which of the following is best characterized as a public good?

All of the following are economic functions of the government EXCEPT

If a corporation were forced to absorb the cost of a spillover from the production of a good,this would likely cause the supply curve for the good to

Which of the following statements is NOT true about the price system?

In the United States,which of the following is an example of a government-inhibited good?

The market and public sector are similar in that

By definition,a government-sponsored good

Which of the following characterizes the largest difference between the way decisions are made in the private sector versus the public sector?

In which of the following ways is the private market sector similar to the public sector in terms of decision making?

The funds that polluters pay that gives them the right to discharge into the air or water a certain amount of pollution are

Explain why an external benefit leads to an under-allocation of resources to the production of a good.

Markets tend to underallocate resources to the production of a good when

A shift from S1 to S2 reflects the change that happens when a negative externality is taken into account.A shift from D1 to D2 reflects the change that happens when a positive externality is taken into account. -Refer to the above figures.An external benefit exists.This will lead to a(n)

Social Security and Medicare are clear examples of

Why are public goods provided by the government,rather than by the private sector?

A government-inhibited good is one that

An example of a market failure is

Which event was most important in promoting the belief that the U.S.government should work to ensure economy-wide stability?

In the spring,I enjoy the fragrance coming from my neighbors' flowers.The fragrance is is an example of

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

A shift from S₁ to S₂ reflects the change that happens when a negative externality is taken into account.A shift from D₁ to D₂ reflects the change that happens when a positive externality is taken into account. -Refer to the above figures.An external benefit exists.This will lead to a(n)