Deck 14: Public Goods and Tax Policy

Question 1

A good or service which is both rival and excludable is a

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

Answer 1

B

Question 2

Suppose that the latest Indiana Jones movie played in theaters first,where it was 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 at the theater 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

Answer 2

B

Question 3

A few years ago Stan and his kids were the only people who fished in Stan's personal pond.Then Stan started to sell tickets to the public.Stan left the pond and the land it was on to the state in his will,stipulating that the land be used as a public fishing area.
After Stan dies the pond will become a _______ good.

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

Answer 3

D

Question 4

Of the following,the best example of a pure public good is

A) cable TV.
B) a national park.
C) national defense.
D) education.

Question 5

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

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

Question 6

Your state department of transportation is considering installing toll booths and gates on one of the freeways that runs through an unpopulated part of the state.If this is adopted,a good that is currently a(n)

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 7

If it is impossible or highly costly to prevent consumers from consuming a good when they have not paid for it,the good is a(n)__________ good.

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

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

The swing set at a popular and unfenced public park is

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

Question 10

A pure public good is one that is

A) highly nonrival and nonexcludable.
B) slightly nonrival and nonexcludable.
C) nonexcludable.
D) highly nonrival but only slightly nonexcludable.

Question 11

Suppose that the latest Indiana Jones movie played in theaters first,where it was 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 a family rents an Indiana Jones movie on DVD to watch together,the DVD is a ____ good.

A) public
B) jointly consumed private
C) jointly consumed public
D) private

Question 12

To say that a particular good is nonrival means that

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 the availability of the good to others.
D) consumption of the good by one person reduces the availability of the good to others.

Question 13

If a good can be consumed by one person without reducing the availability of the good to others,this good is a(n)__________ good.

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

Question 14

Clean air is an example of a good that is

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

Question 15

A few years ago Stan and his kids were the only people who fished in Stan's personal pond.Then Stan started to sell tickets to the public.Stan left the pond and the land it was on to the state in his will,stipulating that the land be used as a public fishing area.
When Stan started to sell tickets to the public to fish in his pond it became a ____ good.

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

Question 16

A few years ago Stan and his kids were the only people who fished in Stan's personal pond.Then Stan started to sell tickets to the public.Stan left the pond and the land it was on to the state in his will,stipulating that the land be used as a public fishing area.
When Stan and his kids were the only people fishing in the pond it was a _______ good.

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

Question 17

A collective good is one that is

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

Question 18

A good or service that is rival but is to some extent nonexcludable is called a _____,and a good or service that is nonrival but is excludable is referred to as a _______

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

Question 19

A freeway without any tolls between 12am and 5am is an example of a ______ good.

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

Question 20

A good or service that is both highly nonrival and highly nonexcludable is a(n)_______ and a good or service that possesses some degree (but not a high degree)of being both nonrival and nonexcludable is a ____

A) public good;pure public good.
B) pure public good;public good.
C) pure public good;private good.
D) public good;private good.

Question 21

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 22

One source of friction in the governmental provision of a pure public good is that voters receive __________ of the public good and have __________ for the public good.

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

Question 23

Assume that each day ten thousand children watch Sesame Street on public television and that the educational benefits of watching Sesame Street generate private benefits of $100 per child per year and a positive externality of $50 per child per year.No products are advertised on Sesame Street but once a year the stations hold a pledge drive.During pledge drives viewers are asked to make voluntary contributions to the public station in order to keep the programming viable.
If the public television stations collect less than $100 per child during the pledge drives it is evidence that

A) the government subsidy is too high.
B) viewers do not take externalities into account when making a donation.
C) some viewers are free riders.
D) viewers do not value Sesame Street as much as originally estimated.

Question 24

To properly justify the governmental provision of a public good,it must be the case that the __________ and that __________.

A) good is indeed a public good;the majority of voters want it to be provided
B) benefits exceed the costs;no lower cost provider exists
C) voters desire the good;no new taxes will be needed
D) benefits exceed the costs;a majority of voters value the good equally

Question 25

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 26

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

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

Question 27

Radio and broadcast television are examples of

A) collective goods.
B) private goods.
C) pure public goods provided by the government.
D) pure public goods provided by private firms.

Question 28

When dealing with pure public goods,

A) the government must always provide them.
B) private firms will always provide them.
C) the government frequently provides them although private firms provide some.
D) private firms provide nearly all of them and the government provides the few remaining ones.

Question 29

If government needs to raise revenues to pay for a public good,the ideal tax structure would be to 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 the citizens that state that they will use the public good.

Question 30

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

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

Question 31

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 $1500 to Lane and $1000 to Riley.Irrespective of who pays for the paving both people will benefit from it.
Suppose the cost of paving the driveway is $2000,it is _____ for them to share its cost,because then they will have a total economic _______.

A) inefficient;shortage of $500
B) efficient;surplus of $500
C) efficient;shortage of $500
D) efficient;surplus of $1000

Question 32

If all taxpayers pay the same amount of tax,the tax is termed a(n)

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

Question 33

Assume that each day ten thousand children watch Sesame Street on public television and that the educational benefits of watching Sesame Street generate private benefits of $100 per child per year and a positive externality of $50 per child per year.No products are advertised on Sesame Street but once a year the stations hold a pledge drive.During pledge drives viewers are asked to make voluntary contributions to the public station in order to keep the programming viable.
Suppose that each parent has just one child who watches Sesame Street.That parent has a private incentive to contribute ____ during the pledge drive.

A) $0
B) $50
C) $100
D) $150

Question 34

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 $1500 to Lane and $1000 to Riley.Irrespective of who pays for the paving both people will benefit from it.
Relative to the two-person scenario described,if a large number of people share the driveway,the joint purchase of paving is _______ and the ________ emerges.

A) impossible;tragedy of the commons
B) less costly;maximum economic efficiency
C) more likely to be accomplished;free-rider problem
D) more difficult;free-rider problem

Question 35

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 36

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 $1500 to Lane and $1000 to Riley.Irrespective of who pays for the paving both people will benefit from it.
What is the most a contractor can charge for paving the driveway and still be hired by at least one of them?

A) $1000
B) $1500
C) $2000
D) $2500

Question 37

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

A) by definition,the benefits of the park are less than the costs and thus 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 38

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

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

Question 39

Water flowing in a river is a _____ good,but a single serving bottle of water is a ______ good.

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

Question 40

Assume that each day ten thousand children watch Sesame Street on public television and that the educational benefits of watching Sesame Street generate private benefits of $100 per child per year and a positive externality of $50 per child per year.No products are advertised on Sesame Street but once a year the stations hold a pledge drive.During pledge drives viewers are asked to make voluntary contributions to the public station in order to keep the programming viable.
The broadcast of Sesame Street yields total private benefits of ____ and total social benefits of _____.

A) $10,000;$15,000
B) $1,000,000;$1,500,000
C) $100,000;$150,000
D) $1,000,000;$500,000

Question 41

A public good that would benefit Karen,Tammy,and Max has a one time installation cost of $900.These three voters must approve any tax plan by simple majority and all three will cast a vote. $$\begin{array} { | c | c | c | } \hline \text { VOTER } & \text { RESERVATION PRICE } & \text { INCOME } \\\hline \text { Kris } & \$ 100 & \$ 1000 \\\hline \text { Taylor } & \$ 200 & \$ 5000 \\\hline \text { Max } & \$ 700 & \$ 6000 \\\hline\end{array}$$
Suppose the government proposes a proportional income tax of 8%.The result of the referendum will be that

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

Question 42

A public good that would benefit Karen,Tammy,and Max has a one time installation cost of $900.These three voters must approve any tax plan by simple majority and all three will cast a vote. $$\begin{array} { | c | c | c | } \hline \text { VOTER } & \text { RESERVATION PRICE } & \text { INCOME } \\\hline \text { Kris } & \$ 100 & \$ 1000 \\\hline \text { Taylor } & \$ 200 & \$ 5000 \\\hline \text { Max } & \$ 700 & \$ 6000 \\\hline\end{array}$$
The net social benefit of providing the public good is

A) $100.
B) $700.
C) $900.
D) $1,000.

Question 43

A public good that would benefit Karen,Tammy,and Max has a one time installation cost of $900.These three voters must approve any tax plan by simple majority and all three will cast a vote. $$\begin{array} { | c | c | c | } \hline \text { VOTER } & \text { RESERVATION PRICE } & \text { INCOME } \\\hline \text { Kris } & \$ 100 & \$ 1000 \\\hline \text { Taylor } & \$ 200 & \$ 5000 \\\hline \text { Max } & \$ 700 & \$ 6000 \\\hline\end{array}$$
Since the government does not know and cannot discover the voters' true reservation prices,it proposes a head tax of $300 per voter.The result of the referendum is

A) the tax passes and the public good is provided.
B) Max votes for the tax but Kris and Taylor vote against it and it fails.
C) Max votes for the tax,Kris votes against it but Taylor's vote is uncertain.
D) all three voters vote against the tax.

Question 44

The very small city of Pleasantville is considering building a public swimming pool that costs $1,000.The table shows the five voters in the city and their marginal benefit of a swimming pool.It takes a 4/5 majority to pass any tax measure and all voters must vote. $$\begin{array} { | c | c | } \hline \text { VOTER } & \text { MARGINAL BENEFIT } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$
Suppose that Sam proposes allowing a private firm to build the pool that would charge the same one time fee to everyone for unlimited access to the pool.The outcome would be that the pool would

A) be built and the fee would be $200.
B) not be built.
C) be built and the fee would be $250.
D) be built and the fee would be $334.

Question 45

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.
An income tax system like the one described is

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

Question 46

The very small city of Pleasantville is considering building a public swimming pool that costs $1,000.The table shows the five voters in the city and their marginal benefit of a swimming pool.It takes a 4/5 majority to pass any tax measure and all voters must vote. $$\begin{array} { | c | c | } \hline \text { VOTER } & \text { MARGINAL BENEFIT } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$
A tax equal to 68% of each taxpayer's marginal benefits would provide a pool and _______ citizens would use it,while a private firm would provide a pool and _____ citizens would use it.

A) all of the;all of the
B) four;three
C) all of the;three
D) four;two

Question 47

The very small city of Pleasantville is considering building a public swimming pool that costs $1,000.The table shows the five voters in the city and their marginal benefit of a swimming pool.It takes a 4/5 majority to pass any tax measure and all voters 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) reduce;the costs exceed the benefits
B) reduce;taxes would have to be collected to build it
C) increase;the benefits exceed the costs
D) increase;the costs can be passed to users from other towns

Question 48

The very small city of Pleasantville is considering building a public swimming pool that costs $1,000.The table shows the five voters in the city and their marginal benefit of a swimming pool.It takes a 4/5 majority to pass any tax measure and all voters must vote. $$\begin{array} { | c | c | } \hline \text { VOTER } & \text { MARGINAL BENEFIT } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylan } & \$ 360 \\\hline \text { Fran } & \$ 350 \\\hline \text { Ronnie } & \$ 190 \\\hline \text { Sam } & \$ 170 \\\hline\end{array}$$
Fran proposes that the city build the pool and finance it with a $200 tax from each voter.The outcome of this proposal will be __________ votes in favor and __________ votes opposed and the measure will __________.

A) 5;0;pass
B) 4;1;pass
C) 2;3;fail
D) 3;2;fail

Question 49

The textbook states that empirical studies have found that the demand for public goods like public parks,environmental protection and public safety

A) is quite price inelastic.
B) has a small,positive income elasticity.
C) is price elastic.
D) has an income elasticity in excess of 1.

Question 50

A head tax means the amount of tax paid is

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

Question 51

The very small city of Pleasantville is considering building a public swimming pool that costs $1,000.The table shows the five voters in the city and their marginal benefit of a swimming pool.It takes a 4/5 majority to pass any tax measure and all voters 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 all voters pay 68% of their marginal benefit in taxes to pay for the pool.The outcome of this proposal is __________ votes in favor,__________ votes opposed and the measure will __________.

A) 4;1;pass
B) 5;0;pass
C) 0;5;fail
D) 3;2;pass

Question 52

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 that 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 only to the wealthiest taxpayers.These provisions tend to make the tax code

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

Question 53

The very small city of Pleasantville is considering building a public swimming pool that costs $1,000.The table shows the five voters in the city and their marginal benefit of a swimming pool.It takes a 4/5 majority to pass any tax measure and all voters 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 to a swimming pool in Pleasantville is

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

Question 54

Suppose that Josh pays $6,000 in income taxes and Maggie pays $4,000.If they are subject to a progressive tax structure,we can say that

A) Josh pays a smaller percentage of his income in taxes.
B) Josh has a higher income than Maggie.
C) Maggie has a higher income than Josh.
D) Josh and Maggie pay the same percentage of their income in taxes.

Question 55

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 amount of income going to taxes as income rises.
D) the same percentage of income going to taxes as income rises.

Question 56

Suppose Scott's demand for a public good is P = 7 - .3Q and Mike's demand is P = 10 - 1.5Q.The equation for social 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 57

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 58

If government chooses to use a head tax to finance a particular public good,then the

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

Question 59

A public good that would benefit Karen,Tammy,and Max has a one time installation cost of $900.These three voters must approve any tax plan by simple majority and all three will cast a vote. $$\begin{array} { | c | c | c | } \hline \text { VOTER } & \text { RESERVATION PRICE } & \text { INCOME } \\\hline \text { Kris } & \$ 100 & \$ 1000 \\\hline \text { Taylor } & \$ 200 & \$ 5000 \\\hline \text { Max } & \$ 700 & \$ 6000 \\\hline\end{array}$$
Suppose that the government accurately knew the three reservation prices and the cost of the public good.To achieve the ideal tax structure and collect no more in tax revenue than $900,each voter should be charged __________ percent of their __________.

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

Question 60

The demand curve for public goods is constructed by

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

Question 61

If voters A,B,and C have the following demand curves for a public library Pa = 5 - 2Q,Pb = 7 - .5Q,and Pc = 2 - 4Q,then social demand for a public library is

A) P = 6 - 12Q.
B) P = 15 - 6Q.
C) P = 21 - 1.5Q.
D) P = 14 - 6.5Q.

Question 62

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

A) Government must always provide public goods.
B) The optimal amount of public good provision is that level at which all taxpayers receive some of the good.
C) If the marginal benefit of the public good exceeds the marginal costs,more should be provided.
D) The optimal amount of public good provision is when total benefits equal total costs.

Question 63

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
Suppose that Towneburg can only blast off whole numbers of fireworks units.The optimal number of units at Towneburg's fireworks display is

A) 10
B) 20
C) 24
D) 48

Question 64

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
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 65

Three different voters demand curves for a public park are shown on the graphs below.

For a 2-acre public park,the market reservation price is ___ per acre.

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

Question 66

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
Suppose 10 fireworks units have been set off.What is the marginal cost of providing one more unit at the fireworks show?

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

Question 67

Three different voters demand curves for a public park are shown on the graphs below.

For a 4-acre public park the market reservation price is

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

Question 68

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
What is the y-axis intercept of the village's collective demand for fireworks?

A) 25
B) 50
C) 10
D) 1000

Question 69

Three different voters demand curves for a public park are shown on the graphs below.

Suppose that 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 70

Three different voters demand curves for a public park are shown on the graphs below.

The market reservation price is $14 per acre for a(n)___ public park

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

Question 71

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
The significance of the price of 10 is that it

A) assists in reading the graph by indicating the units.
B) is the marginal cost of providing one more unit of fireworks.
C) is the average cost of providing 25 units of fireworks.
D) is the minimum per-resident contribution necessary to host a fireworks display.

Question 72

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
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.As a result,relative to a situation in which Charlie is truthful,the efficient level of fireworks provision is

A) less.
B) greater.
C) less,but the same amount will be provided.
D) the same,but less will be provided.

Question 73

Three different voters demand curves for a public park are shown on the graphs below.

Suppose a wealthy citizen donates 2 acres of land to the city and land costs $20 per acre.The optimal park size is

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

Question 74

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
The residents of Towneburg would be willing to pay a total of _____ for the twenty-fifth unit of fireworks and the marginal cost of providing the twenty-fifth unit is ______.

A) $10;$100
B) $0;$10
C) $20;$10
D) $0;$20

Question 75

Three different voters demand curves for a public park are shown on the graphs below.

Suppose the city 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 76

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
The residents of Towneburg would be willing to pay a total of _____ for the first unit of fireworks and the total cost of providing that first unit is _______.

A) $1000;$1,010
B) $1,010;$1,100
C) $960;$100
D) $960;$1,010

Question 77

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 78

Three different voters demand curves for a public park are shown on the graphs below.

Suppose the city 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 79

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
What is the x-axis intercept of the village's collective demand for fireworks?

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

Question 80

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
The residents of Towneburg would be willing to pay a total of _____ for the twenty-fourth unit of fireworks and the marginal cost of providing the twenty-fourth unit is ______.

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