Question 1

Public goods are

Accepted Answer

A) rival and exclusive. 
B) rival,but not exclusive. 
C) exclusive,but not rival. 
D) neither exclusive nor rival. 
A) rival and exclusive. 
B) rival,but not exclusive. 
C) exclusive,but not rival. 
D) neither exclusive nor rival.

Question 2

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 cost exists.This will lead to a(n)

Accepted Answer

A) underproduction equal to   minus   . 
B) overproduction equal to   minus   . 
C) underproduction equal to   minus   . 
D) overproduction equal to   minus   . 
A) underproduction equal to   minus   . 
B) overproduction equal to   minus   . 
C) underproduction equal to   minus   . 
D) overproduction equal to   minus   .

Question 3

Which of the following types of goods would most likely be classified as a government-inhibited good?

Accepted Answer

A) heroin 
B) marijuana 
C) tobacco 
D) All of the above are correct. 
A) heroin 
B) marijuana 
C) tobacco 
D) All of the above are correct.

Question 4

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 5

A difference between the market and the public sector is that

Accepted Answer

A) competition exists only in the market sector. 
B) resources are only scarce for the market sector. 
C) decision making is by majority rule in the public sector but not in the market sector. 
D) only the public sector produces private goods. 
A) competition exists only in the market sector. 
B) resources are only scarce for the market sector. 
C) decision making is by majority rule in the public sector but not in the market sector. 
D) only the public sector produces private goods.

Question 6

The government's policy of reducing payments for physicians' services has generated a relative

Accepted Answer

A) increase in the number of physicians in the program. 
B) reduction in the number of physicians in the program. 
C) reduction in the demand for medical services. 
D) increase in the income of the physicians remaining in the program. 
A) increase in the number of physicians in the program. 
B) reduction in the number of physicians in the program. 
C) reduction in the demand for medical services. 
D) increase in the income of the physicians remaining in the program.

Question 7

The concept that Mr.Jones is going to enjoy the benefits of police protection even though he no longer pays taxes is called

Accepted Answer

A) the free-rider problem. 
B) the negative externality principle. 
C) the principle of rival consumption. 
D) the principle of anti-trust. 
A) the free-rider problem. 
B) the negative externality principle. 
C) the principle of rival consumption. 
D) the principle of anti-trust.

Question 8

Which of the following might be considered a positive externality?

Accepted Answer

A) the pollination of an orange grove due to bees kept by a nearby beekeeper 
B) individuals who did not get the flu,yet did not receive a flu shot when those around them did receive the shot 
C) better fishing resulting from increased lake temperatures generated by the nearby power plant 
D) All of the above are correct. 
A) the pollination of an orange grove due to bees kept by a nearby beekeeper 
B) individuals who did not get the flu,yet did not receive a flu shot when those around them did receive the shot 
C) better fishing resulting from increased lake temperatures generated by the nearby power plant 
D) All of the above are correct.

Question 9

Government payment of a per-unit subsidy for medical care causes

Accepted Answer

A) the market supply curve to shift upward. 
B) the market demand curve to shift downward. 
C) a reduction in the price that providers of medical care receive for each unit of care provided. 
D) an increase in the quantity of medical care demanded above the quantity demanded in the absence of the subsidy. 
A) the market supply curve to shift upward. 
B) the market demand curve to shift downward. 
C) a reduction in the price that providers of medical care receive for each unit of care provided. 
D) an increase in the quantity of medical care demanded above the quantity demanded in the absence of the subsidy.

Question 10

What happens in public schools when government funds subsidize education?

Accepted Answer

A) There is a shortage of schools. 
B) The quality of education rises. 
C) The cost of providing the education is less than what the student pays. 
D) The cost of providing the education is more than what the students pays. 
A) There is a shortage of schools. 
B) The quality of education rises. 
C) The cost of providing the education is less than what the student pays. 
D) The cost of providing the education is more than what the students pays.

Question 11

A firm that has a great deal of control over the price of a good is said

Accepted Answer

A) to function in a black market. 
B) to create a tax incidence. 
C) to have monopoly power. 
D) to be in an antitrust position. 
A) to function in a black market. 
B) to create a tax incidence. 
C) to have monopoly power. 
D) to be in an antitrust position.

Question 12

In graphical form,the effect of imposing a tax on a good is shown as

Accepted Answer

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

Question 13

An example of third parties in the market of automobiles is

Accepted Answer

A) a pedestrian that is affected by the polluted air from automobiles. 
B) a producer of automobiles. 
C) a consumer of automobiles. 
D) None of the above belongs to third parties. 
A) a pedestrian that is affected by the polluted air from automobiles. 
B) a producer of automobiles. 
C) a consumer of automobiles. 
D) None of the above belongs to third parties.

Question 14

When the production of one good spills benefits over to third parties,the government should consider all of the following EXCEPT

Accepted Answer

A) subsidizing the consumption of the good. 
B) subsidizing the production of the good. 
C) creating tax incentives to encourage more consumption. 
D) taxing the production or consumption of the good. 
A) subsidizing the consumption of the good. 
B) subsidizing the production of the good. 
C) creating tax incentives to encourage more consumption. 
D) taxing the production or consumption of the good.

Question 15

When government intervenes in the production process because external costs exist,it typically attempts to shift the industry's

Accepted Answer

A) demand curve to the right. 
B) demand curve to the left. 
C) supply curve to the right. 
D) supply curve to the left. 
A) demand curve to the right. 
B) demand curve to the left. 
C) supply curve to the right. 
D) supply curve to the left.

Question 16

Government goods are provided to the consumer at a zero price.This means that

Accepted Answer

A) the cost to society is zero. 
B) the political system is run by proportional rule. 
C) people are getting something for nothing. 
D) the cost of the goods is the value of the resources used to produce the good. 
A) the cost to society is zero. 
B) the political system is run by proportional rule. 
C) people are getting something for nothing. 
D) the cost of the goods is the value of the resources used to produce the good.

Question 17

To correct for the underproduction of products with positive externalities,the government must

Accepted Answer

A) provide the incentives for the private sector to produce and consume the good. 
B) provide tougher regulations on the industry. 
C) increase taxes on the industry. 
D) fine the industry. 
A) provide the incentives for the private sector to produce and consume the good. 
B) provide tougher regulations on the industry. 
C) increase taxes on the industry. 
D) fine the industry.

Question 18

According to your text,which of the following represents the largest source of tax receipts for the Federal government?

Accepted Answer

A) sales taxes 
B) individual income taxes 
C) corporate income taxes 
D) property taxes 
A) sales taxes 
B) individual income taxes 
C) corporate income taxes 
D) property taxes

Question 19

The economic problem with Medicare financing is that

Accepted Answer

A) there is a built-in incentive to provide fewer services by doctors. 
B) there is a built-in incentive to travel to Canada to receive medical services. 
C) the cost of providing services is falling annually. 
D) there is a built-in incentive to consume more services. 
A) there is a built-in incentive to provide fewer services by doctors. 
B) there is a built-in incentive to travel to Canada to receive medical services. 
C) the cost of providing services is falling annually. 
D) there is a built-in incentive to consume more services.

Question 20

-Refer to the above figure.The market equilibrium quantity is   .Point   represents the optimal amount of production.This indicates that there is

Accepted Answer

A) a public good which should be produced. 
B) regressive taxation of the product. 
C) a positive externality. 
D) a negative externality. 
A) a public good which should be produced. 
B) regressive taxation of the product. 
C) a positive externality. 
D) a negative externality.

Public goods are

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 cost exists.This will lead to a(n)

Which of the following types of goods would most likely be classified as a government-inhibited good?

Social Security and Medicare are clear examples of

A difference between the market and the public sector is that

The government's policy of reducing payments for physicians' services has generated a relative

The concept that Mr.Jones is going to enjoy the benefits of police protection even though he no longer pays taxes is called

Which of the following might be considered a positive externality?

Government payment of a per-unit subsidy for medical care causes

What happens in public schools when government funds subsidize education?

A firm that has a great deal of control over the price of a good is said

In graphical form,the effect of imposing a tax on a good is shown as

An example of third parties in the market of automobiles is

When the production of one good spills benefits over to third parties,the government should consider all of the following EXCEPT

When government intervenes in the production process because external costs exist,it typically attempts to shift the industry's

Government goods are provided to the consumer at a zero price.This means that

To correct for the underproduction of products with positive externalities,the government must

According to your text,which of the following represents the largest source of tax receipts for the Federal government?

The economic problem with Medicare financing is that

-Refer to the above figure.The market equilibrium quantity is .Point represents the optimal amount of production.This indicates that there is

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 goods are

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 cost exists.This will lead to a(n)

Which of the following types of goods would most likely be classified as a government-inhibited good?

Social Security and Medicare are clear examples of

A difference between the market and the public sector is that

The government's policy of reducing payments for physicians' services has generated a relative

The concept that Mr.Jones is going to enjoy the benefits of police protection even though he no longer pays taxes is called

Which of the following might be considered a positive externality?

Government payment of a per-unit subsidy for medical care causes

What happens in public schools when government funds subsidize education?

A firm that has a great deal of control over the price of a good is said

In graphical form,the effect of imposing a tax on a good is shown as

An example of third parties in the market of automobiles is

When the production of one good spills benefits over to third parties,the government should consider all of the following EXCEPT

When government intervenes in the production process because external costs exist,it typically attempts to shift the industry's

Government goods are provided to the consumer at a zero price.This means that

To correct for the underproduction of products with positive externalities,the government must

According to your text,which of the following represents the largest source of tax receipts for the Federal government?

The economic problem with Medicare financing is that

-Refer to the above figure.The market equilibrium quantity is .Point represents the optimal amount of production.This indicates that there is

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