Exam 5: Public Spending and Public Choice

The free-rider problem plagues public goods because

What is an effluent fee? Graphically, show how an effluent fee can correct an externality.

Briefly explain why government subsidies are a reason for the declining student performance in public education.

A difference between the market and the public sector is that

The economic problem with Medicare financing is that

The Employment Act of 1946 reflects which one of the following functions of government?

According to your text, one reason for flat or falling achievement scores even in the face of substantially higher education subsidies may be that

A difference between the market and the public sector is that

If a producer 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

The price system allocates resources efficiently EXCEPT when

Which of the following goods is NOT subject to the free-rider problem?

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

-Refer to above figure in which negative externality existed. The government imposes a $1.00 pollution tax on the producer. Supply shifts leftward.

-In graphical form, the presence of an external benefit that is ignored by consumers can be shown as

Safe Bank has an outside display which has the time and temperature that is always correct. This is an example of

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

Consumers are sovereign when

Why does our government enforce antitrust legislation?

-According to the above figure, if steel mills ignore the cost of pollution, the equilibrium quantity of steel will most likely be

Recipients of Medicare tend to demand a greater quantity of low-value, high-cost services because