Question 1

The three most important public goods are national defence, basic research, and

Accepted Answer

A)   opening stores.
B)   fighting poverty.
C)   digital commerce.
D)   sports.E) A) and B)
F) A) and C)

Question 2

What are the characteristics of public goods, why is there a free rider associated with public goods and what determines whether the government should make provision for public goods?

Accepted Answer

Public goods are neither rival nor exclu...

Question 3

If one person's consumption of a good diminishes other people's use of the good, the good is said to be

Accepted Answer

A)   rival.
B)   a good produced by a natural monopoly.
C)   a common resource.
D)   excludable.E) All of the above
F) None of the above

Question 4

Music is an example of

Accepted Answer

A)   a private good.
B)   a social good.
C)   a non-rival good.
D)   a common good.E) None of the above
F) A) and B)

Question 5

A private good is

Accepted Answer

A)   rival but not excludable.
B)   not rival but excludable.
C)   both rival and excludable.
D)   neither rival nor excludable.E) B) and D)
F) B) and C)

Question 6

Government policy can potentially raise economic well-being

Accepted Answer

A)   in all markets for goods and services.
B)   in economic models, but not in reality.
C)   when a good does not have a price attached to it.
D)   never.E) None of the above
F) C) and D)

Question 7

The creation of knowledge is a public good. Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge. How do governments correct for this apparent market failure?

Accepted Answer

Governments assign and protect the prope...

Question 8

A television signal is an example of

Accepted Answer

A)   a private good.
B)   a non-rival good.
C)   a social good.
D)   a normal good.E) C) and D)
F) B) and C)

Question 9

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Accepted Answer

Eliminating poverty is not a good that t...

Question 10

A free rider is a person who

Accepted Answer

A)   receives the benefit of a good but avoids paying for it.
B)   pays for a good but fails to receive any benefit from the good.
C)   fails to produce goods but is allowed to consume goods.
D)   produces a good but fails to receive payment for the good.E) None of the above
F) All of the above

Question 11

Which of the following is NOT a characteristic of a public good?

Accepted Answer

A)   It requires resources to produce.
B)   It is not diminished or depreciated as additional people consume the good.
C)   Its benefits cannot be withheld from anyone.
D)   It is a free good with zero opportunity cost.E) B) and D)
F) None of the above

Question 12

What are the private and social costs associated with over-consumption of alcohol and what options are available for the government to correct this?

Accepted Answer

Alcohol's private costs include the cost...

Question 13

For private goods allocated in markets,

Accepted Answer

A)   prices guide the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources.
B)   prices guide the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources.
C)   the government guides the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources.
D)   the government guides the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources.E) A) and C)
F) A) and B)

Question 14

De-merit goods

Accepted Answer

A)   are over consumed in the view of the government.
B)   are harmful to individual consumer.
C)   have negative externalities.
D)   can be all of the above.E) A) and C)
F) B) and C)

Question 15

People have little incentive to produce a public good because

Accepted Answer

A)   the social benefit is less than the private benefit.
B)   the social benefit is less than the social cost.
C)   there is a free rider problem.
D)   there is a tragedy of the commons.E) All of the above
F) C) and D)

Question 16

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

Accepted Answer

A)   hot dogs at a picnic
B)   whales in the ocean
C)   national defence
D)   apples on a tree in a public parkE) None of the above
F) B) and C)

Question 17

Which de-merit good is likely to be over consumed when left to the market mechanism?

Accepted Answer

A)   education.
B)   health care.
C)   museum attendance.
D)   tobacco.E) A) and D)
F) A) and B)

Question 18

The government often intervenes when private markets fail to provide an optimal level of certain goods and services. For example, the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another. Why might the private market not reach the socially optimal level of traffic without the help of government?

Accepted Answer

It is possible that everyone can agree t...

Exam 10: Public Goods, Common Resources and Merit Goods

What are the characteristics of public goods, why is there a free rider associated with public goods and what determines whether the government should make provision for public goods?

Correct Answer
verified
Public goods are neither rival nor exclu...
View Answer

Correct Answer
verified
It is possible that everyone can agree t...
View Answer

A television signal is an example of

Correct Answer
verified

De-merit goods

Correct Answer
verified

If one person's consumption of a good diminishes other people's use of the good, the good is said to be

Correct Answer
verified

The three most important public goods are national defence, basic research, and

Correct Answer
verified

A free rider is a person who

Correct Answer
verified

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

Correct Answer
verified

The creation of knowledge is a public good. Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge. How do governments correct for this apparent market failure?

Correct Answer
verified
Governments assign and protect the prope...
View Answer

Which de-merit good is likely to be over consumed when left to the market mechanism?

Correct Answer
verified

For private goods allocated in markets,

Correct Answer
verified

Government policy can potentially raise economic well-being

Correct Answer
verified

People have little incentive to produce a public good because

Correct Answer
verified

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Correct Answer
verified
Eliminating poverty is not a good that t...
View Answer

A private good is

Correct Answer
verified

What are the private and social costs associated with over-consumption of alcohol and what options are available for the government to correct this?

Correct Answer
verified
Alcohol's private costs include the cost...
View Answer

Music is an example of

Correct Answer
verified

Which of the following is NOT a characteristic of a public good?

Correct Answer
verified

Exam 10: Public Goods, Common Resources and Merit Goods

What are the characteristics of public goods, why is there a free rider associated with public goods and what determines whether the government should make provision for public goods?

Correct AnswerverifiedPublic goods are neither rival nor exclu...View AnswerShow Answer

Correct AnswerverifiedIt is possible that everyone can agree t...View AnswerShow Answer

A television signal is an example of

Correct AnswerverifiedShow Answer

De-merit goods

Correct AnswerverifiedShow Answer

If one person's consumption of a good diminishes other people's use of the good, the good is said to be

Correct AnswerverifiedShow Answer

The three most important public goods are national defence, basic research, and

Correct AnswerverifiedShow Answer

A free rider is a person who

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The creation of knowledge is a public good. Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge. How do governments correct for this apparent market failure?

Correct AnswerverifiedGovernments assign and protect the prope...View AnswerShow Answer

Which de-merit good is likely to be over consumed when left to the market mechanism?

Correct AnswerverifiedShow Answer

For private goods allocated in markets,

Correct AnswerverifiedShow Answer

Government policy can potentially raise economic well-being

Correct AnswerverifiedShow Answer

People have little incentive to produce a public good because

Correct AnswerverifiedShow Answer

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Correct AnswerverifiedEliminating poverty is not a good that t...View AnswerShow Answer

A private good is

Correct AnswerverifiedShow Answer

What are the private and social costs associated with over-consumption of alcohol and what options are available for the government to correct this?

Correct AnswerverifiedAlcohol's private costs include the cost...View AnswerShow Answer

Music is an example of

Correct AnswerverifiedShow Answer

Which of the following is NOT a characteristic of a public good?

Correct AnswerverifiedShow Answer

Correct Answer
verified
Public goods are neither rival nor exclu...
View Answer

Correct Answer
verified
It is possible that everyone can agree t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Governments assign and protect the prope...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Eliminating poverty is not a good that t...
View Answer

Correct Answer
verified

Correct Answer
verified
Alcohol's private costs include the cost...
View Answer

Correct Answer
verified

Correct Answer
verified