Deck 14: Public Goods and Tax Policy

Question 1

A swing at a popular, unfenced public park is:

A)nonrival.
B)nonexcludable.
C)a collective good.
D)a pure public good.

Answer 1

nonexcludable.

Question 2

National defense is an example of a good that is:

A)neither nonrival nor nonexcludable.
B)largely nonrival and nonexcludable.
C)only nonexcludable.
D)only nonrival

Answer 2

largely nonrival and nonexcludable.

Question 3

A crowded beach without an entrance fee is a ______ good.

A)public
B)private
C)pure public
D)commons

Answer 3

commons

Question 4

Suppose the latest Hunger Games movie first played in theaters, where it sold out during its opening week. Several months later it was available on pay-per-view TV. Two years later it was shown on CBS, a broadcast television network. When the movie was playing in theaters, it was a ______ good; when it was available on pay-per-view TV, it was a ______ good; and when it was shown on CBS, it was a ______ good.

A)private; public; public
B)private; collective; public
C)collective; private; commons
D)collective; commons; public

Question 5

Suppose Stan owns a piece of property with a large lake. Initially, Stan and his family were the only people who swam in the lake. Then Stan started selling tickets to people who wanted to go swimming in the lake. When Stan died, he left the lake and the land it was on to the state, stipulating that the lake be left open to the public for swimming. Due to the lake's remote location, it was never crowded. When Stan started selling tickets to the public, the lake became a ______ good.

A)private
B)commons
C)collective
D)public

Question 6

Which of the following is the best example of a pure public good?

A)Cable television
B)A national park
C)National defense
D)Education

Question 7

A collective good is one that, to at least some degree, is:

A)nonrival but excludable.
B)nonexcludable but rival.
C)consumed by more than one person.
D)both nonrival and nonexcludable.

Question 8

Aaron's neighbor Cliff keeps his front yard well-manicured and plants beautiful flowers which Aaron enjoys. If local law prevents Cliff from fencing his yard, the beauty of Cliff's front yard is:

A)nonrival.
B)a private good.
C)nonexcludable.
D)both nonrival and nonexcludable.

Question 9

A good or service that is both rival and excludable is a:

A)public good.
B)private good.
C)collective good.
D)commons good.

Question 10

If a good can be consumed by one person without reducing its availability to others, then it is a ______ good.

A)nonexcludable
B)pure public
C)common
D)nonrival

Question 11

Suppose Stan owns a piece of property with a large lake. Initially, Stan and his family were the only people who swam in the lake. Then Stan started selling tickets to people who wanted to go swimming in the lake. When Stan died, he left the lake and the land it was on to the state, stipulating that the lake be left open to the public for swimming. Due to the lake's remote location, it was never crowded. After Stan died, the lake became a ______ good.

A)private
B)commons
C)collective
D)public

Question 12

If it is difficult, or costly, to prevent people who do not pay for a good from consuming the good, then the good is a ______ good.

A)nonexcludable
B)pure public
C)private
D)nonrival

Question 13

A pure public good is one that is:

A)highly nonrival and highly nonexcludable.
B)neither nonrival nor nonexcludable.
C)nonexcludable but rival.
D)nonrival but excludable.

Question 14

A good or service that is highly nonrival and highly nonexcludable is a(n) ______ good.

A)pure public
B)commons
C)collective
D)private

Question 15

A highway without any tolls between 12am and 5am when there is very little traffic is an example of a ______ good.

A)collective
B)public
C)private
D)commons

Question 16

When someone buys a movie on DVD, the DVD is a ______ good.

A)public
B)private
C)collective
D)commons

Question 17

If a good is nonrival, then:

A)it has no substitutes.
B)consumers can enjoy it without paying for it.
C)consumption of the good by one person does not diminish its availability to others.
D)consumption of the good by one person diminishes its availability to others.

Question 18

A good or service that is rival but nonexcludable is called a ______, and a good or service that is nonrival but excludable is called a ______.

A)public good; private good
B)commons good; public good
C)commons good; collective good
D)public good; collective good

Question 19

Which of the following items is an example of a good that is nonrival but excludable?

A)Pay-per-view movies.
B)Corn.
C)National defense.
D)Broadcast television.

Question 20

Your state department of transportation is considering installing toll booths with gates on a quiet section of highway. If this is done, a good that is currently a:

A)public good will become a private good.
B)nonrival good will become a rival good.
C)nonexcludable good will become an excludable good.
D)rival good will become an excludable good.

Question 21

Assume that each day ten thousand children watch Sesame Street on public television and that watching Sesame Street generates a benefit of $100 per child per year. Once a year, public televisions hold a pledge drive asking viewers to make voluntary contributions in order to keep the programming available to everyone. The broadcast of Sesame Street yields a total social benefit of _____ per year.

A)$0
B)$100
C)$10,000
D)$1,000,000

Question 22

If taxpayers pay a smaller fraction of their income in taxes as their incomes rise, the tax is ______ and if taxpayers pay a larger fraction of their income in taxes as their income rise, the tax is ______.

A)regressive; progressive
B)progressive; regressive
C)proportional; progressive
D)regressive; proportional

Question 23

Spike pays $14,000 in taxes and earns $100,000. Ace earns $120,000. If the tax system is progressive, Ace will pay ______ in taxes.

A)$15,500.
B)more than $16,800.
C)more than $15,500 but less than $16,800.
D)$16,800.

Question 24

If the government uses a head tax to finance a public good, then the:

A)proportion of income paid in taxes is constant.
B)dollar amount paid by each taxpayer declines as income rises.
C)proportion of income paid in taxes declines as income rises.
D)proportion of income paid in taxes increases as income rises.

Question 25

Broadcast television is an example of:

A)a collective good provided by the government.
B)a private good provided by private firms.
C)a private good provided by the government.
D)a public good provided by private firms.

Question 26

Curly pays $12,000 in taxes and earns $150,000. Moe pays $7,000 in taxes. If the tax system is proportional, then Moe's income is:

A)$56,000.
B)$125,000.
C)$87,500.
D)$98,000.

Question 27

Assume that each day ten thousand children watch Sesame Street on public television and that watching Sesame Street generates a benefit of $100 per child per year. Once a year, public televisions hold a pledge drive asking viewers to make voluntary contributions in order to keep the programming available to everyone. Suppose each parent has just one child who watches Sesame Street. Each parent has a private incentive to contribute ______ during the pledge drive.

A)$0
B)$100
C)$10,000
D)$1,000,000

Question 28

One disadvantage of using the government to provide pure public goods is that everyone receives ______ of the public good and has ______ for the public good.

A)a different amount; a different reservation price
B)a different amount; the same reservation price
C)the same amount; a different reservation price
D)the same amount; the same reservation price

Question 29

If the government needs to raise revenue to pay for a public good, the ideal tax structure would tax

A)all citizens by the same amount.
B)all citizens in proportion to their willingness to pay for the public good.
C)all citizens by the same proportion of their income.
D)only citizens who state that they will use the public good.

Question 30

Lane and Riley are the only two residents in a neighborhood, and they share the same driveway. They would like to have the driveway paved. The value of the paved driveway is $1,500 to Lane and $900 to Riley. Regardless of who pays for the paving both people will benefit from it. If the cost of paving the driveway is $2,000 and Lane proposes that they each pay 50 percent of this cost, then Riley ______ agree to Lane's proposal because ______.

A)will; repaving the driveway would increase total economic surplus
B)will not; repaving the driveway would lower total economic surplus
C)will; if they split the cost, then Riley's economic surplus would increase
D)will not; if they split the cost, then Riley's economic surplus would decrease

Question 31

Pure public goods:

A)should always be provided by government.
B)should always be provided by private firms.
C)are frequently provided by the government, and are sometimes provided by private firms.
D)are, by definition, goods and services provided by the government.

Question 32

Lane and Riley are the only two residents in a neighborhood, and they share the same driveway. They would like to have the driveway paved. The value of the paved driveway is $1,500 to Lane and $900 to Riley. Regardless of who pays for the paving both people will benefit from it. If the cost of paving the driveway is $2,000, then it is ______ for the driveway to be paved because total economic surplus would ______.

A)inefficient; fall by $1,100
B)efficient; increase by $400
C)inefficient; fall by $500
D)efficient; increase by $1,100

Question 33

If all taxpayers pay the same percentage of their income in taxes, the tax is termed a(n):

A)proportional tax.
B)progressive tax.
C)head tax.
D)excise tax.

Question 34

Under a head tax, the amount of tax paid is:

A)the same for all taxpayers.
B)proportional to each taxpayer's income.
C)a linearly increasing function of the taxpayer's income.
D)the same for all taxpayers who use the public good.

Question 35

If all taxpayers pay the same dollar amount, the tax is termed a:

A)proportional tax.
B)progressive tax.
C)head tax.
D)per unit tax.

Question 36

The government should only provide a pure public good if ______ and ______.

A)the good is indeed a public good; the majority of voters want it to be provided
B)the good's benefits exceed its costs; there is no less costly way to provide it
C)voters desire the good; no new taxes will be needed
D)the good's benefits exceed its costs; the government can afford to provide the good

Question 37

Lane and Riley are the only two residents in a neighborhood, and they share the same driveway. They would like to have the driveway paved. The value of the paved driveway is $1,500 to Lane and $900 to Riley. Regardless of who pays for the paving both people will benefit from it. What is the most a contractor can charge to pave the driveway and still be assured of being hired by at least one of them?

A)$600
B)$900
C)$1,500
D)$2,400

Question 38

A patch of edible mushrooms growing wild in a national forest is a ______ good.

A)public
B)private
C)pure public
D)commons

Question 39

Assume that each day ten thousand children watch Sesame Street on public television and that watching Sesame Street generates a benefit of $100 per child per year. Once a year, public televisions hold a pledge drive asking viewers to make voluntary contributions in order to keep the programming available to everyone. If public television stations collect less than $100 per child during the pledge drive, then this is evidence:

A)that the government should not subsidize public television.
B)that parents do not care about their children.
C)of the free-rider problem.
D)that head taxes are regressive.

Question 40

Citizens of Tinytown are considering building a new park. If each voter in Tinytown has a reservation price that is less than the total cost of the park, then:

A)the benefit of the park is less than the cost of the park, so the park should not be built.
B)some sort of collective action by voters will be necessary to fund the park.
C)a private firm will have an incentive to build the park.
D)the park will never be built.

Question 41

To derive the market demand curve for a private good, one sums the ______. For a public good, one sums the ______.

A)individual quantities at various prices; individual quantities at various prices
B)individual prices at various quantities; individual quantities at various prices
C)individual quantities at various prices; individual prices at various quantities
D)individual prices at various quantities; individual prices at various quantities

Question 42

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } \hline \text { Resident } & \text { Reservation Price } & \text { Income } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$ Installing the public good would ______ total economic surplus by ______.

A)increase; $100
B)decrease; $100
C)decrease; $900
D)increase; $1,000

Question 43

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } \hline \text { Resident } & \text { Reservation Price } & \text { Income } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$ If the government proposes to pay for the public good with a head tax of $300 per resident, then

A)all three will vote in favor of the tax.
B)Max will vote in favor of the tax, but Kris and Taylor will vote against it.
C)Max will vote against the tax, but Kris and Taylor will vote in favor of it.
D)all three residents will vote against the tax.

Question 44

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } \hline \text { Resident } & \text { Reservation Price } & \text { Income } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$ Suppose that the government knows each resident's reservation price. To collect no more than $900 in tax revenue, each resident should be charged ______ percent of their ______.

A)100; reservation price
B)70; reservation price
C)20; income
D)90; reservation price

Question 45

Joe earns $10,000 in income and pays $1,000 in taxes while Jack earns $30,000 and pays $4,000 in taxes. The structure of this tax is:

A)progressive.
B)proportional.
C)regressive.
D)a head tax.

Question 46

Suppose Scott's demand for a public good is P = 7 - .3Q and Mike's demand is P = 10 - 1.5Q. The equation for the total demand for the public good is:

A)P = 20 - 3.0Q.
B)P = 17 - 1.8Q.
C)P = 3 - 1.2Q.
D)P = 14 - .6Q.

Question 47

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } \hline \text { Resident } & \text { Reservation Price } & \text { Income } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$ If the government proposes to pay for the public good with a proportional income tax of 8 percent, then:

A)all three voters will vote in favor of the tax.
B)Max and Taylor will vote against the tax, but Kris will vote in favor of it.
C)Kris and Max will vote in favor of the tax, but Taylor will vote against it.
D)all three voters will vote against the tax.

Question 48

Suppose a study that finds that the income elasticity of demand for a public good is greater than 1. This implies that the public good should be financed through a ______ income tax system.

A)collective
B)regressive
C)proportional
D)progressive

Question 49

The current U.S. income tax system requires taxpayers to pay a higher marginal tax rate on higher levels of taxable income. Suppose that the tax rate is 10% on the first $15,000 of taxable income, 15% on the next $45,000 of taxable income, 30% on the next $60,000 of taxable income, and 35% on taxable income above $120,000. Suppose the tax code also includes provisions that allow taxpayers to reduce the income on which they are taxed, and that those provisions most often apply to the richest taxpayers. These provisions tend to make the tax code:

A)more progressive.
B)more efficient.
C)less progressive.
D)less regressive.

Question 50

A proportional tax results in:

A)a larger percentage of income going to taxes as income rises.
B)a smaller percentage of income going to taxes as income rises.
C)the same dollar amount going to taxes for all taxpayers.
D)the same percentage of income going to taxes for all taxpayers.

Question 51

The current U.S. income tax system requires taxpayers to pay a higher marginal tax rate on higher levels of taxable income. Suppose that the tax rate is 10% on the first $15,000 of taxable income, 15% on the next $45,000 of taxable income, 30% on the next $60,000 of taxable income, and 35% on taxable income above $120,000. This income tax system is:

A)progressive.
B)regressive.
C)proportional.
D)progressive when income is low, then regressive.

Question 52

The demand curve for a public good is constructed by:

A)summing voters' desired quantity of the public good at each price.
B)surveying voters on how much of a particular public good they would use at each price.
C)summing voters' reservation prices at each quantity.
D)dividing the total cost of providing the public good by the number of potential users.

Question 53

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | } \hline \text { Voter } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$ If Fran proposes that the city build the pool and finance it with a $200 tax on each resident, then ______ residents will vote in favor of the proposal and ______ will vote against, so the proposal will ______.

A)5; 1; pass
B)4; 1; pass
C)2; 3; fail
D)3; 2; fail

Question 54

Which of the following statements about the provision of public goods is true?

A)The government should always provide public goods.
B)The optimal level of a public good occurs when all taxpayers receive some of the good.
C)If the marginal benefit of a public good exceeds its marginal cost, more should be provided.
D)The total benefit of a public good should equal its total cost.

Question 55

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | } \hline \text { Voter } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$ The total social benefit of the swimming pool is:

A)$1,490.
B)$1,000.
C)$1,590.
D)$1,120.

Question 56

If voters A, B, and C have the following demand curves for a public library Pa = 5 - Q, Pb = 10 - 2Q, and Pc = 15 - 3Q, then social demand for a public library is:

A)P = 6 - 30Q.
B)P = 15 - Q.
C)P = 30 - 3Q.
D)P = 30 - 6Q.

Question 57

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | } \hline \text { Voter } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$ Building the swimming pool would ______ total economic surplus because ______.

A)decrease; the total cost of the pool is greater than the total social benefit of the pool
B)decrease; taxes would have to be collected to build the pool
C)increase; the total social benefit of the pool is greater than the total cost of the pool
D)increase; the cost of building the pool can be passed to users from other towns

Question 58

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | } \hline \text { Voter } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$ Kyle proposes that the city auction the right to build the pool to the highest-bidding company. The winning company would be able to charge residents a one-time fee to use the pool as much as they like, and only residents who pay the fee would be allowed to use the pool. If the private company could perfectly price discriminate, then:

A)no private company would bid on the right to build the pool.
B)a private company would be willing to bid up to $490 to build the pool.
C)a private company would be willing to bid up to $1,000 to build the pool.
D)a private company would be willing to bid up to $1,490 to build the pool.

Question 59

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | } \hline \text { Voter } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$ Dylan proposes that the city let a private company build the pool and charge residents a one-time fee to use the pool as much as they like. Only residents who pay the fee would be allowed to use the pool. If the private company were allowed to set a single fee, then:

A)no private company would offer to build the pool.
B)a private company would offer to build the pool and would set the fee equal to $200.
C)a private company would offer to build the pool and would set the fee equal to $250.
D)a private company would offer to build the pool and would set the fee equal to $298.

Question 60

Josh pays $6,000 in taxes and earns $60,000. Maggie pays $4,000 in taxes. If the tax system is progressive, then Maggie earns:

A)$40,000.
B)more than $40,000 but less than $60,000.
C)less than $40,000.
D)more than $60,000.

Question 61

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Suppose 10 shells have been fired off. What is the marginal cost of firing off one more shell?

A)$0
B)$10
C)$25
D)$100

Question 62

For many pure public goods like fireworks displays, weather forecasts, and television broadcasts the marginal cost of serving one more consumer is ______, and the optimal quantity of the public good occurs when ______.

A)zero; provision is infinite.
B)determined by average cost rather than marginal cost; price equals average cost.
C)greater than the average cost; the government provides the good.
D)zero; the marginal benefit of the public good equals zero.

Question 63

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C.
If the good shown on the graphs is a public good, and the marginal cost of providing each unit is constant and equal to $5, then what is the optimal quantity of the public good?

A)50 units
B)40 units
C)30 units
D)20 units

Question 64

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. The public's willingness to pay for the 4^th acre of parkland is:

A)$6.
B)$8.
C)$14.
D)$20.

Question 65

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. What is the horizontal intercept of the village's demand curve for fireworks?

A)25
B)50
C)100
D)500

Question 66

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ______ for the 10^th shell, and the marginal cost of the 10^th shell is ______.

A)$30; $100
B)$600; $1100
C)$30; $10
D)$600; $10

Question 67

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ______ for the 25^th shell, and the marginal cost of the 25^th shell is ______.

A)$10; $2500
B)$0; $10
C)$20; $10
D)$0; $3500

Question 68

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C.
If the good shown on the graphs is a public good, then the marginal benefit of the 30^th unit is:

A)$30
B)$9
C)$4
D)$2

Question 69

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C.
If the good shown on the graphs is a public good, and the marginal cost of the 20^th unit is $10, then the optimal quantity of the public good is:

A)zero.
B)20 units
C)less than 20 units.
D)greater than 20 units.

Question 70

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. Suppose the city receives a grant that pays one half of the cost of each acre the city buys. If the cost of land is $28 per acre, the optimal park size is

A)8.
B)2.
C)4.
D)6.

Question 71

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. The public's willingness to pay for the 2^nd acre of parkland is ______.

A)$6.
B)$8.
C)$14.
D)$26.

Question 72

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. Suppose the town can purchase land for the park at a cost of $8 per acre. The optimal park size would be ______ acres.

A)2
B)4
C)6
D)8

Question 73

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. If Towneburg's fireworks display has 20 shells, then the size of the display is:

A)optimal.
B)larger than optimal.
C)smaller than optimal.
D)unaffordable.

Question 74

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ______ for the 24th shell, and the marginal cost of the 24^th shell is ______.

A)$20; $200
B)$20; $10
C)$40; $200
D)$40; $10

Question 75

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Cheap Charlie is one of Towneburg's 20 residents. While Charlie enjoys fireworks as much as the next Towneburger, when the fireworks fund-raising campaign kicks off, he claims to hate them. Cheap Charlie is trying to:

A)free ride.
B)rent seek.
C)force the village to be more efficient.
D)log-roll.

Question 76

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. What is the vertical intercept of the village's demand curve for fireworks?

A)25
B)50
C)10
D)1,000

Question 77

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. Suppose the town can purchase land for the park at a cost of $20 per acre. The optimal park size would be ______ acres.

A)2
B)4
C)6
D)8

Question 78

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. The public is willing to pay $14 for the _____ acre of parkland.

A)2^nd
B)4^th
C)6^th
D)8^th

Question 79

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. If the park is currently 2 acres, and land costs $20 per acre, the town should:

A)reduce the size of the park.
B)purchase two additional acres.
C)not change the size of the park.
D)purchase 4 additional acres.

Question 80

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C. If the good shown on the graphs is a private good, then at a price of $4, market demand is ______ units.

A)60
B)30
C)10
D)5