Question 1

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

Accepted Answer

A)  maximum differentiation. 
B)  minimum differentiation. 
C)  minimum marginal utility. 
D)  maximum returns. 
E)  agreement. 
A)  maximum differentiation. 
B)  minimum differentiation. 
C)  minimum marginal utility. 
D)  maximum returns. 
E)  agreement. B

Question 2

Because fire protection is a ________ good,the free-rider problem is avoided by public provision and financing through ________.
A) public; taxes
B) private; taxes
C) natural monopoly; taxes
D) public; grants
E) public; vouchers

Accepted Answer

A

Question 3

-Paul and Paula are the only members of society.The table above gives their marginal benefits from missile gunboats,a public good.Determine the marginal benefit to society of the fourth missile gunboat.

Accepted Answer

A)  $8 million 
B)  $4 million 
C)  $2 million 
D)  $1 million 
E)  $40 million 
A)  $8 million 
B)  $4 million 
C)  $2 million 
D)  $1 million 
E)  $40 million B

Question 4

The reason that private provision of a public good often leads to inefficiency is because

Accepted Answer

A)  private property rights are too costly to enforce. 
B)  marginal private benefits are too costly to calculate. 
C)  no one has the incentive to pay for the good. 
D)  no one has an incentive to conserve the good. 
E)  the tragedy of the commons occurs and too many public goods are provided. 
A)  private property rights are too costly to enforce. 
B)  marginal private benefits are too costly to calculate. 
C)  no one has the incentive to pay for the good. 
D)  no one has an incentive to conserve the good. 
E)  the tragedy of the commons occurs and too many public goods are provided.

Question 5

Which of the following is an example of the free-rider problem?

Accepted Answer

A)  John attends a lecture on investing in high-tech companies for which he paid $100 to hear. 
B)  Tom watches Mystery on his local PBS television station, but Tom does not contribute anything to PBS. 
C)  Sarah works overtime while her co-workers opt for a traditional schedule. 
D)  Jethro buys a skunk-hunting permit that he refuses to share with his sister. 
E)  Katie catches a swordfish in the ocean. 
A)  John attends a lecture on investing in high-tech companies for which he paid $100 to hear. 
B)  Tom watches Mystery on his local PBS television station, but Tom does not contribute anything to PBS. 
C)  Sarah works overtime while her co-workers opt for a traditional schedule. 
D)  Jethro buys a skunk-hunting permit that he refuses to share with his sister. 
E)  Katie catches a swordfish in the ocean.

Question 6

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

Accepted Answer

A)  rival 
B)  nonrival 
C)  nonexcludable 
D)  rival and nonexcludable 
E)  quasi public/quasi private 
A)  rival 
B)  nonrival 
C)  nonexcludable 
D)  rival and nonexcludable 
E)  quasi public/quasi private

Question 7

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture,the farmer raises ________.

Accepted Answer

A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct. 
A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct.

Question 8

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

Accepted Answer

A)  the principle of minimum differentiation. 
B)  provision of a public good. 
C)  rational ignorance. 
D)  overproduction of a private good. 
E)  overproduction of a public good. 
A)  the principle of minimum differentiation. 
B)  provision of a public good. 
C)  rational ignorance. 
D)  overproduction of a private good. 
E)  overproduction of a public good.

Question 9

What is the tragedy of the commons?

Accepted Answer

The tragedy of the commons is the absenc

Question 10

-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers,$300 per hour.The marginal social cost is twice the marginal private cost.If the government sets a production quota,to have the efficient quantity of fish caught,the quote should equal ________ tons of fish.

Accepted Answer

A)  100 
B)  200 
C)  300 
D)  400 
E)  500 
A)  100 
B)  200 
C)  300 
D)  400 
E)  500

Question 11

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

Accepted Answer

The statement is false.For bot

Question 12

What is rational ignorance?

Accepted Answer

Rational ignorance is the voter's decisi

Question 13

To find the economy's marginal benefit curve of a public good,we

Accepted Answer

A)  sum the marginal benefits of each individual at each quantity. 
B)  sum the costs of the inputs used to produce the good. 
C)  sum the quantities demanded at each individual price. 
D)  sum the prices consumers are willing to pay for different quantities of the good. 
E)  average the prices consumers are willing to pay for the same quantity of the good. 
A)  sum the marginal benefits of each individual at each quantity. 
B)  sum the costs of the inputs used to produce the good. 
C)  sum the quantities demanded at each individual price. 
D)  sum the prices consumers are willing to pay for different quantities of the good. 
E)  average the prices consumers are willing to pay for the same quantity of the good.

Question 14

-The table above shows Anita and Steve's marginal benefits for the annual 4th of July fireworks show at City Park.If Anita and Steve are the only two people in the economy,what is the economy's marginal benefit from the 18th minute of fireworks?

Accepted Answer

A)  $38 
B)  $33 
C)  $30 
D)  $162 
E)  $129 
A)  $38 
B)  $33 
C)  $30 
D)  $162 
E)  $129

Question 15

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The efficient outcome is ________.

Accepted Answer

A)  0 tons per week 
B)  300 tons per week 
C)  400 tons per week 
D)  None of the above answers is correct. 
A)  0 tons per week 
B)  300 tons per week 
C)  400 tons per week 
D)  None of the above answers is correct.

Question 16

For a common resource,the equilibrium with no government intervention is such that ________ equals ________.

Accepted Answer

A)  marginal private benefit; marginal social cost 
B)  marginal social benefit; marginal private cost 
C)  marginal social cost; marginal social benefit 
D)  marginal external benefit; marginal external cost 
E)  marginal social benefit; marginal external cost 
A)  marginal private benefit; marginal social cost 
B)  marginal social benefit; marginal private cost 
C)  marginal social cost; marginal social benefit 
D)  marginal external benefit; marginal external cost 
E)  marginal social benefit; marginal external cost

Question 17

One important feature that distinguishes a public good from a private good is that

Accepted Answer

A)  only the government can produce public goods. 
B)  it is impossible to prevent a person from enjoying the benefits from a public good. 
C)  if you pay for a unit of a public good, you are guaranteed to be the sole consumer. 
D)  if you consume a unit of a public good, there is one unit less for someone else. 
E)  Both answers C and D are correct. 
A)  only the government can produce public goods. 
B)  it is impossible to prevent a person from enjoying the benefits from a public good. 
C)  if you pay for a unit of a public good, you are guaranteed to be the sole consumer. 
D)  if you consume a unit of a public good, there is one unit less for someone else. 
E)  Both answers C and D are correct.

Question 18

A library is a public good.The marginal cost curve for libraries in Lafayette,California

Accepted Answer

A)  has a negative slope. 
B)  is definitely a horizontal line. 
C)  has a positive slope. 
D)  is a vertical line. 
E)  is identical to the marginal benefit curve because libraries are nonrival. 
A)  has a negative slope. 
B)  is definitely a horizontal line. 
C)  has a positive slope. 
D)  is a vertical line. 
E)  is identical to the marginal benefit curve because libraries are nonrival.

Question 19

The free-rider problem exists because

Accepted Answer

A)  private goods or services cause some people to want to take them for free. 
B)  some goods or services are excludable and cause envy for those who don't have them. 
C)  some goods or services that are rival and leave some people without them. 
D)  people cannot be excluded from consuming public goods even if they don't pay for them. 
E)  people must all consume the same public good and so everyone wants to pay for it. 
A)  private goods or services cause some people to want to take them for free. 
B)  some goods or services are excludable and cause envy for those who don't have them. 
C)  some goods or services that are rival and leave some people without them. 
D)  people cannot be excluded from consuming public goods even if they don't pay for them. 
E)  people must all consume the same public good and so everyone wants to pay for it.

Question 20

One important feature that distinguishes a private good from a public good is that

Accepted Answer

A)  only the government can produce private goods. 
B)  nobody can be excluded from enjoying the benefits of a private good. 
C)  a private good is excludable and a public good is nonexcludable. 
D)  if you consume a unit of a private, that means there is no less for someone else. 
E)  a private good is nonrival and a public good is rival. 
A)  only the government can produce private goods. 
B)  nobody can be excluded from enjoying the benefits of a private good. 
C)  a private good is excludable and a public good is nonexcludable. 
D)  if you consume a unit of a private, that means there is no less for someone else. 
E)  a private good is nonrival and a public good is rival.

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

Because fire protection is a good,the free-rider problem is avoided by public provision and financing through . A) public; taxes B) private; taxes C) natural monopoly; taxes D) public; grants E) public; vouchers

-Paul and Paula are the only members of society.The table above gives their marginal benefits from missile gunboats,a public good.Determine the marginal benefit to society of the fourth missile gunboat.

The reason that private provision of a public good often leads to inefficiency is because

Which of the following is an example of the free-rider problem?

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture,the farmer raises ________.

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

What is the tragedy of the commons?

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

What is rational ignorance?

To find the economy's marginal benefit curve of a public good,we

-The table above shows Anita and Steve's marginal benefits for the annual 4th of July fireworks show at City Park.If Anita and Steve are the only two people in the economy,what is the economy's marginal benefit from the 18th minute of fireworks?

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The efficient outcome is ________.

For a common resource,the equilibrium with no government intervention is such that equals .

One important feature that distinguishes a public good from a private good is that

A library is a public good.The marginal cost curve for libraries in Lafayette,California

The free-rider problem exists because

One important feature that distinguishes a private good from a public good is that

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Public Goods and Common Resources

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

Because fire protection is a ________ good,the free-rider problem is avoided by public provision and financing through ________. A) public; taxes B) private; taxes C) natural monopoly; taxes D) public; grants E) public; vouchers

-Paul and Paula are the only members of society.The table above gives their marginal benefits from missile gunboats,a public good.Determine the marginal benefit to society of the fourth missile gunboat.

The reason that private provision of a public good often leads to inefficiency is because

Which of the following is an example of the free-rider problem?

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture,the farmer raises ________.

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

What is the tragedy of the commons?

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

What is rational ignorance?

To find the economy's marginal benefit curve of a public good,we

-The table above shows Anita and Steve's marginal benefits for the annual 4th of July fireworks show at City Park.If Anita and Steve are the only two people in the economy,what is the economy's marginal benefit from the 18th minute of fireworks?

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The efficient outcome is ________.

For a common resource,the equilibrium with no government intervention is such that ________ equals ________.

One important feature that distinguishes a public good from a private good is that

A library is a public good.The marginal cost curve for libraries in Lafayette,California

The free-rider problem exists because

One important feature that distinguishes a private good from a public good is that

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Because fire protection is a good,the free-rider problem is avoided by public provision and financing through . A) public; taxes B) private; taxes C) natural monopoly; taxes D) public; grants E) public; vouchers

For a common resource,the equilibrium with no government intervention is such that equals .