Deck 16: Public Choices, Public Goods, and Healthcare

Question 1

If it possible to prevent a person from enjoying the benefits of a good unless the person pays for the good, the good is

A) rival.
B) excludable.
C) pure.
D) free.

Answer 1

excludable.

Question 2

If the consumption of a good or service by one person does not decrease the quantity available for another person, the good or service is

A) nonrival.
B) nonexcludable.
C) pure.
D) free.

Answer 2

nonrival.

Question 3

A good or service or a resource is excludable if

A) it is possible to prevent someone from enjoying its benefits.
B) it is not possible to prevent someone from enjoying its benefits.
C) its use by one person decreases the quantity available for someone else.
D) its use by one person does not decrease the quantity available for someone else.

Answer 3

it is possible to prevent someone from enjoying its benefits.

Question 4

The political market place requires all EXCEPT

A) diplomats.
B) firms.
C) voters.
D) politicians.

Question 5

For a good to be nonrival, then

A) one person's consumption of that good does not decrease another person's consumption of that good.
B) a person cannot be prevented from consuming that good even if he or she did not pay for it.
C) a person is willing to pay any price to ensure that the product is available.
D) a person is not willing to pay for the good because even without paying for it, the person can consume the good anyway.

Question 6

Governments exist to

A) maintain property rights.
B) provide non-market mechanisms for allocating scarce resources.
C) implement arrangements that redistribute wealth and income.
D) all of the above.

Question 7

In the political marketplace, firms do all of the following EXCEPT

A) vote.
B) pay taxes.
C) evaluate policy proposals of politicians.
D) benefit from public goods and services.

Question 8

After Hurricane Sandy, FEMA (the Federal Emergency Management Agency) advertised in a New Jersey radio station how people affected by the hurricane could file for assistance. In the political marketplace, the decision makers in FEMA are best characterized as

A) voters.
B) firms.
C) politicians.
D) bureaucrats.

Question 9

Education at a private university is NOT a pure public good because it is

A) nonrival.
B) excludable.
C) both nonrival and nonexcludable.
D) None of the above answers is correct.

Question 10

If it is impossible or very costly to prevent someone from benefiting from a good even if the person does not pay for it, the good is

A) nonrival.
B) nonexcludable.
C) pure.
D) rival.

Question 11

A political equilibrium can never be reached without voters, firms, politicians and ________.

A) bureaucrats
B) public costs
C) indifference curves
D) market prices

Question 12

If it is impossible to prevent someone from benefiting from a good regardless of whether or not the person paid for it, then the good is

A) nonrival.
B) rival.
C) nonexcludable.
D) excludable.

Question 13

Government failure, when government actions lead to inefficiency, can result in

A) overprovision.
B) underprovision.
C) both A and B.
D) neither A nor B.

Question 14

A public choice is

A) a decision that affects one person.
B) a decision that affects no one.
C) a decision made in public.
D) a decision that affects an entire society.

Question 15

A good or service or a resource is nonexcludable if

A) it is possible to prevent someone from enjoying its benefits.
B) it is not possible to prevent someone from benefiting from it.
C) its use by one person decreases the quantity available for someone else.
D) its use by one person does not decrease the quantity available for someone else.

Question 16

In the political marketplace, voters do all of the following EXCEPT

A) benefit from public goods and services.
B) pay some taxes.
C) vote.
D) evaluate policy proposals of bureaucrats.

Question 17

A good or service or a resource is nonrival if

A) it is possible to prevent someone from enjoying its benefits.
B) it is not possible to prevent someone from enjoying its benefits.
C) its use by one person decreases the quantity available for someone else.
D) its use by one person does not decrease the quantity available for someone else.

Question 18

When government action leads to inefficiency, it is known as

A) government failure.
B) government as usual.
C) lack of government trust.
D) politics.

Question 19

If the consumption of Good A by one person does not decrease the quantity of Good A available for another person's consumption, then the good is said to be

A) nonrival.
B) rival.
C) nonexcludable.
D) excludable.

Question 20

If I increase my consumption of a good and this has no impact the quantity you can consume of the same good, then this good is

A) nonrival.
B) nonexclusive.
C) both nonrival and nonexclusive.
D) a free good.

Question 21

Nonrivalry is a feature of

A) goods but not services.
B) all nonexcludable goods.
C) excludable goods.
D) public goods.

Question 22

Which of the following is the BEST example of a private good?

A) a can of Mountain Dew
B) fish in the ocean
C) cable television
D) national defense

Question 23

If the consumption of a good decreases the quantity available for another person, the good is

A) rival.
B) excludable.
C) pure.
D) free.

Question 24

A public good is ________ and ________.

A) rival; excludable
B) nonrival; excludable
C) rival; nonexcludable
D) nonrival; nonexcludable

Question 25

Which of the following is a necessary characteristic of a public good? The good is

A) excludable.
B) nonrival.
C) nonexcludable.
D) Both answers B and C are correct.

Question 26

When consumption is rival and excludable, the product is a

A) public good.
B) private good.
C) mixed good.
D) service, not a good.

Question 27

Public goods are I. nonexcludable.
II) nonrival.

A) I only
B) II only
C) both I and II
D) neither I nor II

Question 28

When consumption of a good is nonrival and nonexcludable, the good is a

A) public good.
B) private good.
C) mixed good.
D) service.

Question 29

Which of the following is the BEST example of a private good?

A) a house
B) a bridge during rush hour
C) air traffic control
D) fish in the ocean

Question 30

Private goods are those for which consumption is

A) rival and excludable.
B) rival and nonexcludable.
C) nonrival and excludable.
D) nonrival and nonexcludable.

Question 31

Nonexcludability is a feature of

A) goods but not services.
B) all nonrival goods.
C) goods with an external cost.
D) public goods.

Question 32

Food is an example of a ________ good.

A) nonrival and nonexcludable
B) rival and excludable
C) nonrival and excludable
D) rival and nonexcludable

Question 33

A movie shown on a pay-per-view cable station is an example of

A) an excludable and rival good.
B) a nonexcludable and rival good.
C) an excludable and nonrival good.
D) a nonexcludable and nonrival good.

Question 34

A private good is ________ and ________.

A) rival; excludable
B) nonrival; excludable
C) rival; nonexcludable
D) nonrival; nonexcludable

Question 35

Public goods are those for which

A) individuals who do not pay can be excluded from consuming the good.
B) individuals who do not pay cannot be excluded from consuming the good.
C) external costs exist.
D) no external costs exist.

Question 36

Which of the following is the BEST example of a good that is nonrival and excludable?

A) a can of Mountain Dew
B) fish in the ocean
C) cable television
D) national defense

Question 37

A good or service or a resource is rival if

A) it is possible to prevent someone from enjoying its benefits.
B) it is not possible to prevent someone from enjoying its benefits.
C) its use by one person decreases the quantity available for someone else.
D) its use by one person does not decrease the quantity available for someone else.

Question 38

What are the two features of a public good?

A) nonrival and excludable
B) nonrival and nonexcludable
C) rival and excludable
D) rival and nonexcludable

Question 39

A good which is nonrival and nonexcludable is

A) a public good.
B) a private good.
C) a social good.
D) an externality.

Question 40

Goods that are nonrival and nonexcludable are called

A) external goods.
B) public goods.
C) private goods.
D) free goods.

Question 41

To two hunters, a deer running in a forest is

A) nonrival and nonexcludable.
B) nonrival and excludable.
C) rival and nonexcludable.
D) rival and excludable.

Question 42

An uncrowded toll road is ________ because it is ________.

A) a public good; both nonrival and nonexcludable
B) not a public good; nonrival but excludable
C) not a public good; nonexcludable but rival
D) not a public good; both rival and excludable

Question 43

Natural monopolies are ________ and ________.

A) rival; excludable
B) nonrival; excludable
C) rival; nonexcludable
D) nonrival; nonexcludable

Question 44

Which of the following is the BEST example a public good?

A) a parking space
B) a car
C) a stop sign
D) a toll road

Question 45

Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. For residents of Long Beach Island, this barrier system would be a

A) private good.
B) natural monopoly.
C) common resource.
D) public good.

Question 46

Which of the following is likely to be nonexcludable but rival?

A) walking along a crowded hiking trail
B) watching cable TV
C) viewing flowers along the highway
D) listening to a local radio station

Question 47

A museum is NOT a public good if

A) there can be no congestion.
B) the museum receives donations from members of the public.
C) an entry fee is charged and people are denied entry if they do not pay.
D) the general public typically does not go to the museum.

Question 48

Which of the following is the BEST example of a public good?

A) a house
B) the Internet
C) Fourth of July fireworks
D) fish in the ocean

Question 49

A free rider is someone who

A) creates an external benefit.
B) is irrational.
C) consumes only the goods he or she pays for.
D) enjoys the benefits of a good without paying for it.

Question 50

An example of a public good is

A) national defense services.
B) a Ford truck.
C) a loaf of bread.
D) a home computer.

Question 51

An example of a natural monopoly is

A) a house.
B) the Internet.
C) air traffic control.
D) fish in the ocean.

Question 52

Which of the following is the BEST example of a public good?

A) public transportation by bus
B) clean air
C) community swimming pools for which the user must pay a fee
D) postal services

Question 53

A common resource is ________ and ________.

A) rival; excludable
B) nonrival; excludable
C) rival; nonexcludable
D) nonrival; nonexcludable

Question 54

An example of a good that is both rival and excludable is

A) the defense services provided by a new stealth bomber.
B) a pair of pants.
C) a beautiful sunset.
D) an uncrowded theme park such as Walt Disney World.

Question 55

National defense is an example of a ________.

A) public good
B) natural monopoly good
C) common resource
D) private good

Question 56

A school of tuna swimming in the ocean is

A) nonexcludable and rival.
B) excludable and rival.
C) nonexcludable and nonrival.
D) excludable and nonrival.

Question 57

Which of the following is rival and excludable?

A) a public good
B) a natural monopoly
C) a private good
D) a common resource

Question 58

Which of the following is the BEST example of a common resource?

A) a house
B) the Internet
C) air traffic control
D) fish in the ocean

Question 59

Which of the following is the BEST example of a public good?

A) a can of Mountain Dew
B) fish in the ocean
C) cable television
D) national defense

Question 60

Which of the following is the BEST example of a common resource?

A) a can of Mountain Dew
B) fish in the ocean
C) cable television
D) national defense

Question 61

Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. The marginal social benefit of the barrier is equal to the

A) marginal private benefit of the person who benefits the most from the barrier.
B) marginal private benefit of the person who benefits the least from the barrier.
C) sum of the marginal private benefits for anyone who benefits from the barrier.
D) difference between the marginal private benefit of the person who benefits the most and the person who benefits the least from the barrier.

Question 62

The free-rider problem is the absence of an incentive for

A) firms to produce public goods.
B) people to use common resources.
C) people to pay for what they consume.
D) people to vote.

Question 63

Free riding

A) is possible if the consumption of a good is characterized by excludability.
B) is possible if the consumption of a good is characterized by nonexcludability.
C) is characteristic of private goods.
D) occurs when consumers pay too much for services provided by government.

Question 64

A free rider problem is a problem associated with

A) public goods.
B) common resources.
C) private goods.
D) natural monopolies.

Question 65

For a public good, the marginal social benefit curve is the ________ summation of all the individual marginal benefit curves. For a private good, the marginal social benefit curve is the ________ summation of all the individual marginal benefit curves.

A) horizontal; vertical
B) vertical; horizontal
C) vertical; vertical
D) horizontal; horizontal

Question 66

The economy's marginal social benefit curve for a public good is obtained by

A) horizontally summing each individual's demand curve.
B) horizontally summing each individual's marginal benefit curve.
C) vertically summing each individual's marginal benefit curve.
D) averaging each individual's marginal benefit curve.

Question 67

Because of the free-rider problem, ________.

A) there is an efficient allocation of resources for common resources
B) private provision leads to the production of more than the efficient quantity of a public good
C) private provision leads to the production of less than the efficient quantity of a public good
D) the public uses too little of a common resource

Question 68

A free rider is someone who

A) pays for a good and then does not consume the good.
B) consumes a good without paying for it.
C) pays the dollar value that he or she places on a given amount of a public good.
D) pays the maximum amount that he or she is willing to pay for the good.

Question 69

The free-rider problem can arise when consumption of a good is

A) rival.
B) excludable.
C) nonrival but excludable.
D) nonexcludable.

Question 70

A free-rider problem exists if

A) those consuming the good pay more than the cost of providing the good so that the producer's profits increase ("free ride") as a result of the overpayment.
B) those consuming the good pay nothing for it.
C) two consumers can jointly consume a good, which lowers the price per person.
D) a firm can obtain technology at a fair price.

Question 71

A free-rider problem occurs when the

A) good is excludable.
B) good is offered at no charge.
C) good is rival.
D) good is nonexcludable.

Question 72

The free-rider problem is the reason way private markets are unlikely to achieve the efficient level of production of

A) normal goods.
B) excludable goods.
C) public goods.
D) private goods.

Question 73

Free riding is not a problem in the market for a private good because

A) people who do not pay for the good can be excluded from consumption.
B) the good is a rival good.
C) the market eliminates the problem of externalities.
D) The question errs because free riding is a problem in providing private goods.

Question 74

Free riders are not a problem in the market for a private good because

A) non-payers can be excluded from consuming the good.
B) the good is a rival good.
C) the good can be produced only at a positive marginal cost.
D) the free rider will not get caught.

Question 75

The economy's marginal benefit curve for a public good is found by ________ for all individuals.

A) vertically summing the marginal benefit curves
B) vertically summing the total benefit curves
C) horizontally summing the total benefit curves
D) horizontally summing the marginal benefit curves

Question 76

The economy's marginal social benefit curve for a public good is calculated by adding the

A) marginal cost of all the suppliers at each quantity.
B) quantities supplied by all the suppliers at each price.
C) quantities demanded by all the individuals at each price.
D) marginal benefits of all the individuals at each quantity.

Question 77

To find the economy's marginal benefit curve for a public good, you would

A) average the individual marginal benefit curves horizontally.
B) average the individual marginal benefit curves vertically.
C) sum the individual marginal benefit curves horizontally.
D) sum the individual marginal benefit curves vertically.

Question 78

The economy's marginal social benefit curve for a public good is equal to the ________.

A) horizontal sum of the individual demand curves
B) vertical sum of the individual marginal benefit curves
C) horizontal sum of the individual marginal benefit curves
D) vertical sum of the individual supply curves

Question 79

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

A) all the individuals can consume the same unit of the good.
B) more than one supplier can provide the good.
C) the same unit of the good cannot be simultaneously shared by more than one person at a time.
D) the government can supply a public good at a lower cost than can a private supplier.

Question 80

Public goods create a free-rider problem because the quantity of the good that a person consumes ________ for that good.

A) does not depend on the amount that the person pays
B) increases as that person pays less
C) increases as that person pays more
D) decreases as that person pays more