Question 1

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

Accepted Answer

A) as a free good. 
B) as a subsidized good. 
C) at the market clearing price. 
D) in an amount less than the equilibrium quantity. 
A) as a free good. 
B) as a subsidized good. 
C) at the market clearing price. 
D) in an amount less than the equilibrium quantity.

Question 2

Explain why an external cost leads to an over-allocation of resources to the production of a good.

Accepted Answer

An external cost is the cost associated

Question 3

The purpose of an effluent fee is to

Accepted Answer

A) reduce the amount produced of a good and to raise the market price. 
B) correct for pollution while keeping the price of the good the same as before the correction. 
C) reward people producing externalities. 
D) encourage producers to keep the quantity produced the same while lowering the price. 
A) reduce the amount produced of a good and to raise the market price. 
B) correct for pollution while keeping the price of the good the same as before the correction. 
C) reward people producing externalities. 
D) encourage producers to keep the quantity produced the same while lowering the price.

Question 4

Which of the following is an example of a positive externality?

Accepted Answer

A) something obtainable at a zero price 
B) a lower crime rate for a community in which residents receive more education 
C) increased purchases of landscaping services by a homeowner that boost a neighbor's property value 
D) a discount for consumers buying in large quantity 
A) something obtainable at a zero price 
B) a lower crime rate for a community in which residents receive more education 
C) increased purchases of landscaping services by a homeowner that boost a neighbor's property value 
D) a discount for consumers buying in large quantity

Question 5

What are the key characteristics of a public good?

Accepted Answer

A public good is not subject to the prin

Question 6

If the government pays a per-unit subsidy to the producer of a service,we would expect to see a(n) I.increase in the quantity demanded.
II.decrease in the out-of-pocket price paid by consumers.
III.increase in the quantity supplied by producers.

Accepted Answer

A) I only 
B) both I and II only 
C) both II and III only 
D) I,II,and III 
A) I only 
B) both I and II only 
C) both II and III only 
D) I,II,and III

Question 7

Which of the following statements about public education is TRUE?

Accepted Answer

A) Over the last 40 years,there has been an increase in spending for public education,while there has not been a significant increase in performance. 
B) Over the last 40 years,there has been a decrease in public spending for public education,while there has not been a significant increase in performance. 
C) Most of the increases in public spending on public education have gone into programs that have increased student learning. 
D) Over the last 40 years there has been no decline in any of the measures of student performance in public education. 
A) Over the last 40 years,there has been an increase in spending for public education,while there has not been a significant increase in performance. 
B) Over the last 40 years,there has been a decrease in public spending for public education,while there has not been a significant increase in performance. 
C) Most of the increases in public spending on public education have gone into programs that have increased student learning. 
D) Over the last 40 years there has been no decline in any of the measures of student performance in public education.

Question 8

An external cost,such as the cost generated by pollution,is

Accepted Answer

A) a cost paid by consumers of the product. 
B) a cost paid by producers of the product. 
C) a cost paid by a third party or by society at large. 
D) not a true opportunity cost of production. 
A) a cost paid by consumers of the product. 
B) a cost paid by producers of the product. 
C) a cost paid by a third party or by society at large. 
D) not a true opportunity cost of production.

Question 9

How does a government-sponsored good differ from a public good?

Accepted Answer

A public good is characterized by the fa

Question 10

-According to the above figure,if steel mills are charged an effluent fee in order to bear the cost of pollution,what happens to the equilibrium price and equilibrium quantity?

Accepted Answer

A) They are unchanged. 
B) They change from P1 and Q1 to P2 and Q2. 
C) They change from P2 and Q2 to P1 and Q1. 
D) The equilibrium price increases from P1 and P2,but the equilibrium quantity is unchanged. 
A) They are unchanged. 
B) They change from P1 and Q1 to P2 and Q2. 
C) They change from P2 and Q2 to P1 and Q1. 
D) The equilibrium price increases from P1 and P2,but the equilibrium quantity is unchanged.

Question 11

Which of the following might be a method that the government could use to promote the production of a good that generates positive externalities?

Accepted Answer

A) subsidies 
B) regulations 
C) financing additional production 
D) All of the above are correct. 
A) subsidies 
B) regulations 
C) financing additional production 
D) All of the above are correct.

Question 12

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.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

A government-sponsored good is often

Accepted Answer

A) produced by the government. 
B) subsidized. 
C) taxed. 
D) advertised. 
A) produced by the government. 
B) subsidized. 
C) taxed. 
D) advertised.

Question 14

The amount of government spending on education per public school student has ________ since 1960,and the achievement level of students has generally ________ since that time.

Accepted Answer

A) increased;increased 
B) decreased;decreased 
C) increased;decreased 
D) decreased;increased 
A) increased;increased 
B) decreased;decreased 
C) increased;decreased 
D) decreased;increased

Question 15

When a person throws a cigarette out of a car window and starts a brush fire,this is

Accepted Answer

A) an example of an external benefit. 
B) an example of an external cost. 
C) an example of a public good. 
D) an example of market power. 
A) an example of an external benefit. 
B) an example of an external cost. 
C) an example of a public good. 
D) an example of market power.

Question 16

Which of the following is an example of a positive externality?

Accepted Answer

A) A neighbor's flower garden that you enjoy seeing 
B) Traffic congestion 
C) An increased supply of chocolate lowers chocolate prices for all consumers 
D) Pollution 
A) A neighbor's flower garden that you enjoy seeing 
B) Traffic congestion 
C) An increased supply of chocolate lowers chocolate prices for all consumers 
D) Pollution

Question 17

A government-sponsored good is one that

Accepted Answer

A) is desirable to no one but ruled desirable by the court system nonetheless. 
B) everyone agrees is socially desirable. 
C) freely competitive markets have determined is socially desirable. 
D) the political process has determined is socially desirable. 
A) is desirable to no one but ruled desirable by the court system nonetheless. 
B) everyone agrees is socially desirable. 
C) freely competitive markets have determined is socially desirable. 
D) the political process has determined is socially desirable.

Question 18

Graphically,the effect of a government subsidy on a good is shown as

Accepted Answer

A) a leftward shift of the market demand curve. 
B) a rightward shift of the market demand curve. 
C) a downward movement along the market demand curve. 
D) no change to the market demand curve. 
A) a leftward shift of the market demand curve. 
B) a rightward shift of the market demand curve. 
C) a downward movement along the market demand curve. 
D) no change to the market demand curve.

Question 19

Which of the following could best be categorized as a public good?

Accepted Answer

A) an apartment in a public housing project 
B) a pumpkin pie 
C) public fireworks 
D) a race track 
A) an apartment in a public housing project 
B) a pumpkin pie 
C) public fireworks 
D) a race track

Question 20

Which of the following is NOT a transfer payment?

Accepted Answer

A) Medicare 
B) Social Security retirement payments 
C) Social Security disability payments 
D) spending on national defense 
A) Medicare 
B) Social Security retirement payments 
C) Social Security disability payments 
D) spending on national defense

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

Explain why an external cost leads to an over-allocation of resources to the production of a good.

The purpose of an effluent fee is to

Which of the following is an example of a positive externality?

What are the key characteristics of a public good?

If the government pays a per-unit subsidy to the producer of a service,we would expect to see a(n) I.increase in the quantity demanded. II.decrease in the out-of-pocket price paid by consumers. III.increase in the quantity supplied by producers.

Which of the following statements about public education is TRUE?

An external cost,such as the cost generated by pollution,is

How does a government-sponsored good differ from a public good?

-According to the above figure,if steel mills are charged an effluent fee in order to bear the cost of pollution,what happens to the equilibrium price and equilibrium quantity?

Which of the following might be a method that the government could use to promote the production of a good that generates positive externalities?

A government-sponsored good is often

The amount of government spending on education per public school student has since 1960,and the achievement level of students has generally since that time.

When a person throws a cigarette out of a car window and starts a brush fire,this is

Which of the following is an example of a positive externality?

A government-sponsored good is one that

Graphically,the effect of a government subsidy on a good is shown as

Which of the following could best be categorized as a public good?

Which of the following is NOT a transfer payment?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 5: Public Spending and Public Choice

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

Explain why an external cost leads to an over-allocation of resources to the production of a good.

The purpose of an effluent fee is to

Which of the following is an example of a positive externality?

What are the key characteristics of a public good?

If the government pays a per-unit subsidy to the producer of a service,we would expect to see a(n) I.increase in the quantity demanded. II.decrease in the out-of-pocket price paid by consumers. III.increase in the quantity supplied by producers.

Which of the following statements about public education is TRUE?

An external cost,such as the cost generated by pollution,is

How does a government-sponsored good differ from a public good?

-According to the above figure,if steel mills are charged an effluent fee in order to bear the cost of pollution,what happens to the equilibrium price and equilibrium quantity?

Which of the following might be a method that the government could use to promote the production of a good that generates positive externalities?

A government-sponsored good is often

The amount of government spending on education per public school student has ________ since 1960,and the achievement level of students has generally ________ since that time.

When a person throws a cigarette out of a car window and starts a brush fire,this is

Which of the following is an example of a positive externality?

A government-sponsored good is one that

Graphically,the effect of a government subsidy on a good is shown as

Which of the following could best be categorized as a public good?

Which of the following is NOT a transfer payment?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

The amount of government spending on education per public school student has since 1960,and the achievement level of students has generally since that time.