Deck 16: Public Choices and Public Goods

Question 1

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 1

nonrival.

Question 2

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.

Answer 2

nonrival.

Question 3

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.

Answer 3

one person's consumption of that good does not decrease another person's consumption of that good.

Question 4

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 5

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

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

Question 6

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 7

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 8

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 9

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.

Question 10

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 11

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 12

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 13

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 14

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.

Question 15

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 16

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

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

Question 17

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 18

The political market place requires all EXCEPT

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

Question 19

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 20

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

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

Question 21

Food is an example of a ________ good.

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

Question 22

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 23

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 24

Nonrivalry is a feature of

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

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

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 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

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 29

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 30

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 31

A private good is ________ and ________.

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

Question 32

A public good is ________ and ________.

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

Question 33

Goods that are nonrival and nonexcludable are called

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

Question 34

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 35

Nonexcludability is a feature of

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

Question 36

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 37

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 38

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 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

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 41

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 42

A common resource is ________ and ________.

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

Question 43

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 44

National defense is an example of a ________.

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

Question 45

A cost that arises from the production of a good that is paid by someone who did not participate in the production is called

A) a free rider.
B) an externality.
C) rent seeking.
D) a public failure.

Question 46

An externality can be a

A) cost or a benefit.
B) benefit but not a cost.
C) cost but not a benefit.
D) marginal cost but not a total cost.

Question 47

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 48

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 49

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 50

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 51

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 52

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 53

The external benefit of a good

A) equals its consumer surplus.
B) equals its producer surplus.
C) equals its total surplus.
D) is a benefit from the good falling on people who are not the consumers of the good.

Question 54

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 55

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 56

An example of a natural monopoly is

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

Question 57

Natural monopolies are ________ and ________.

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

Question 58

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 59

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 60

An externality occurs when

A) the costs of producing a good are paid entirely by the producer.
B) some of the costs of producing a good are paid by someone other than the producer.
C) the marginal social cost of an activity increases as that activity is increased.
D) Both answers A and C are correct.

Question 61

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 62

An example of an activity that generates an external cost is

A) dumping soapsuds into a trout stream.
B) national defense services.
C) planting flowers along an interstate highway.
D) eating an apple.

Question 63

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 64

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 65

Which of the following illustrates the concept of external benefit?

A) Good weather increases the size of the wheat crop.
B) A new pesticide increases the size of the wheat crop.
C) A gardener enjoys his flowers.
D) Neighbors enjoy a gardener's flowers.

Question 66

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 67

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 68

Which of the following episodes would most likely contain an externality?

A) You cannot afford to buy groceries.
B) You decide to grow your own vegetables in your backyard where no one else can see them.
C) You decide to grow flowers in your front yard where everyone else can see them.
D) You eat all the vegetables you grow yourself.

Question 69

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 70

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 71

A free rider problem is created by

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

Question 72

The free-rider problem arises when consumption of a good is

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

Question 73

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 74

Which of the following does NOT contain an externality?

A) I sell you an ice cream and you drip it all over the person sitting next to you.
B) I sell you an ice cream and it gives you a headache.
C) I sell you an ice cream and you share it with your friend.
D) I give you an ice cream and you share it with a friend.

Question 75

When people decorate the exteriors of their homes with colored lights, they create ________ for the motorists who pass by.

A) an external benefit
B) a competitive good
C) a public good
D) an excludable good

Question 76

An externality can be a cost or benefit arising from the production of a good that falls upon

A) consumers but not producers.
B) producers but not consumers.
C) both the consumer and the producer.
D) someone other than the consumer or producer.

Question 77

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 78

Beautification of the national highways through the planting of shrubs and wildflowers will

A) be profitable for a private landscaping company because they can charge passing drivers.
B) benefit even people who do not help pay.
C) provide a flow of services that are rival in consumption.
D) provide a flow of services that involve excludable consumption.

Question 79

In which of the following markets are external benefits most likely to exist?

A) in the market for gasoline
B) in the market for ball pens
C) in the market for flu shots
D) in the market for cigarettes

Question 80

An example of an externality occurs when a chemical factory

A) is producing ethanol and dumps waste in a river upstream from a popular fishing spot.
B) produces fertilizers that do not help plants grow.
C) produces fertilizers that kill plants rather than feed them.
D) overworks its employees.