Question 1

Public goods are unlikely to be provided by the private sector because

Accepted Answer

A) the production of the good creates negative externalities. 
B) no one can be excluded from the consumption of the good. 
C) the consumption of the good creates negative externalities. 
D) the exclusion principle does not apply to public goods. 
A) the production of the good creates negative externalities. 
B) no one can be excluded from the consumption of the good. 
C) the consumption of the good creates negative externalities. 
D) the exclusion principle does not apply to public goods.

Question 2

Public goods are basically

Accepted Answer

A) rival in consumption. 
B) nonrival in consumption. 
C) depletable in consumption. 
D) nondepletable in consumption. 
A) rival in consumption. 
B) nonrival in consumption. 
C) depletable in consumption. 
D) nondepletable in consumption.

Question 3

How have some patients been harmed by Medicare reimbursement caps?

Accepted Answer

A) They have been discharged from the hospital too soon,so that the hospital can cut costs. 
B) They have been kept in the hospital too long,so that the hospital can get a higher reimbursement amount. 
C) They have had to undergo unnecessary procedures,so that the hospital can get a higher reimbursement amount. 
D) They have had to wait too long for essential procedures. 
A) They have been discharged from the hospital too soon,so that the hospital can cut costs. 
B) They have been kept in the hospital too long,so that the hospital can get a higher reimbursement amount. 
C) They have had to undergo unnecessary procedures,so that the hospital can get a higher reimbursement amount. 
D) They have had to wait too long for essential procedures.

Question 4

Which of the following does NOT involve transfers in kind?

Accepted Answer

A) Public housing 
B) Food stamps 
C) Medicare 
D) Salaries of government employees 
A) Public housing 
B) Food stamps 
C) Medicare 
D) Salaries of government employees

Question 5

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

Accepted Answer

A) subject to the principle of rival consumption. 
B) subject to the free-rider problem. 
C) not subject to the exclusion principle. 
D) a public good. 
A) subject to the principle of rival consumption. 
B) subject to the free-rider problem. 
C) not subject to the exclusion principle. 
D) a public good.

Question 6

In public education,the value of the services provided is

Accepted Answer

A) greater than the value that parents and students place on the services. 
B) equal to the value that parents and students place on the services. 
C) less than the value that parents and students place on the services. 
D) zero since they are a public good. 
A) greater than the value that parents and students place on the services. 
B) equal to the value that parents and students place on the services. 
C) less than the value that parents and students place on the services. 
D) zero since they are a public good.

Question 7

The distinguishing characteristic of private goods is that

Accepted Answer

A) the principle of rival consumption does not apply to them. 
B) their use is exclusive to the people who purchase them. 
C) they can be sold but not rented. 
D) they can be sold or rented,but not borrowed. 
A) the principle of rival consumption does not apply to them. 
B) their use is exclusive to the people who purchase them. 
C) they can be sold but not rented. 
D) they can be sold or rented,but not borrowed.

Question 8

One reason the Medicare system costs so much is

Accepted Answer

A) the amount of medical services is determined by the equilibrium of supply and demand. 
B) the supply of medical services does not respond to price changes. 
C) supply and demand analysis does not apply. 
D) beneficiaries are entitled to receive services for which the per-unit cost exceeds their own personal out-of-pocket payment. 
A) the amount of medical services is determined by the equilibrium of supply and demand. 
B) the supply of medical services does not respond to price changes. 
C) supply and demand analysis does not apply. 
D) beneficiaries are entitled to receive services for which the per-unit cost exceeds their own personal out-of-pocket payment.

Question 9

Orchards provide services to beekeepers because the bees use the pollen to make honey.This is an example of

Accepted Answer

A) a positive externality,and too many orchards exist in society. 
B) a positive externality,and too few orchards exist in society. 
C) a negative externality,and too many orchards exist in society. 
D) a negative externality,and too few orchards exist in society. 
A) a positive externality,and too many orchards exist in society. 
B) a positive externality,and too few orchards exist in society. 
C) a negative externality,and too many orchards exist in society. 
D) a negative externality,and too few orchards exist in society.

Question 10

Markets tend to overallocate 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 11

What is one result of the Medicare subsidy?

Accepted Answer

A) The health care industry is more efficient than it otherwise would be. 
B) Patients may elect to have some treatments that are of low value to them but that are costly to provide. 
C) The elderly population in the United States receives a lower quality of medical care than what is provided for the elderly population in other countries. 
D) The number of physicians in the United States has declined. 
A) The health care industry is more efficient than it otherwise would be. 
B) Patients may elect to have some treatments that are of low value to them but that are costly to provide. 
C) The elderly population in the United States receives a lower quality of medical care than what is provided for the elderly population in other countries. 
D) The number of physicians in the United States has declined.

Question 12

Examples of transfers-in-kind include

Accepted Answer

A) tax rebates on both the federal and state levels. 
B) taxes on alcohol and tobacco. 
C) food stamps and public housing. 
D) political advertising. 
A) tax rebates on both the federal and state levels. 
B) taxes on alcohol and tobacco. 
C) food stamps and public housing. 
D) political advertising.

Question 13

An example of a public good is

Accepted Answer

A) software produced by Microsoft. 
B) housing subsidies. 
C) the car I own. 
D) the fire department. 
A) software produced by Microsoft. 
B) housing subsidies. 
C) the car I own. 
D) the fire department.

Question 14

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

Accepted Answer

A) National defense 
B) The local police force 
C) Public fireworks 
D) A public transit system 
A) National defense 
B) The local police force 
C) Public fireworks 
D) A public transit system

Question 15

Briefly explain the similarities and differences of decision making by the market sector and the public sector.

Accepted Answer

The similarities of the two sectors incl

Question 16

Which of the following is a transfer payment? I.Social Security
II.Unemployment benefits

Accepted Answer

A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II 
A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II

Question 17

A government agency charged with enforcing antitrust laws is

Accepted Answer

A) the Federal Reserve Board. 
B) the National Labor Relations Board. 
C) the Council of Economic Advisors. 
D) the Federal Trade Commission. 
A) the Federal Reserve Board. 
B) the National Labor Relations Board. 
C) the Council of Economic Advisors. 
D) the Federal Trade Commission.

Question 18

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

Accepted Answer

A) Medicare 
B) Social Security 
C) public education 
D) food stamps 
A) Medicare 
B) Social Security 
C) public education 
D) food stamps

Question 19

When does a subsidy that benefits consumers result in a more efficient allocation of a resource?

Accepted Answer

A) when the good being produced or consumed is not scarce 
B) when the good being produced or consumed generates a negative externality 
C) when the good being produced or consumed generates a positive externality 
D) when the equilibrium price of the good is one that consumers don't like 
A) when the good being produced or consumed is not scarce 
B) when the good being produced or consumed generates a negative externality 
C) when the good being produced or consumed generates a positive externality 
D) when the equilibrium price of the good is one that consumers don't like

Question 20

The government corrects for externalities in all of the following ways EXCEPT

Accepted Answer

A) taxes. 
B) regulation. 
C) lobbying. 
D) subsidies. 
A) taxes. 
B) regulation. 
C) lobbying. 
D) subsidies.

Public goods are unlikely to be provided by the private sector because

Public goods are basically

How have some patients been harmed by Medicare reimbursement caps?

Which of the following does NOT involve transfers in kind?

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

In public education,the value of the services provided is

The distinguishing characteristic of private goods is that

One reason the Medicare system costs so much is

Orchards provide services to beekeepers because the bees use the pollen to make honey.This is an example of

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

What is one result of the Medicare subsidy?

Examples of transfers-in-kind include

An example of a public good is

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

Briefly explain the similarities and differences of decision making by the market sector and the public sector.

Which of the following is a transfer payment? I.Social Security II.Unemployment benefits

A government agency charged with enforcing antitrust laws is

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

When does a subsidy that benefits consumers result in a more efficient allocation of a resource?

The government corrects for externalities in all of the following ways EXCEPT

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 unlikely to be provided by the private sector because

Public goods are basically

How have some patients been harmed by Medicare reimbursement caps?

Which of the following does NOT involve transfers in kind?

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

In public education,the value of the services provided is

The distinguishing characteristic of private goods is that

One reason the Medicare system costs so much is

Orchards provide services to beekeepers because the bees use the pollen to make honey.This is an example of

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

What is one result of the Medicare subsidy?

Examples of transfers-in-kind include

An example of a public good is

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

Briefly explain the similarities and differences of decision making by the market sector and the public sector.

Which of the following is a transfer payment? I.Social Security II.Unemployment benefits

A government agency charged with enforcing antitrust laws is

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

When does a subsidy that benefits consumers result in a more efficient allocation of a resource?

The government corrects for externalities in all of the following ways EXCEPT

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