Question 1

The purchase of fire extinguishers by apartment dwellers provides benefits to their neighbors.Explain why this situation leads to an inefficient outcome.

Accepted Answer

When the person renting an apartment buys a fire extinguisher,the decision is based on the utility the person expects to receive from owning it.However,if his neighbor also receives utility from his purchase of the fire extinguisher,its true social value will not be reflected in the price.Thus,too few fire extinguishers will be purchased.

Question 2

Education generates external benefits.A free market with no government intervention will produce:

Accepted Answer

A) an efficient level of education. 
B) more than the efficient level of education. 
C) less than the efficient level of education. 
D) zero units of education. 
A) an efficient level of education. 
B) more than the efficient level of education. 
C) less than the efficient level of education. 
D) zero units of education. C

Question 3

Public-choice economics is:

Accepted Answer

A) the vote of every politician with respect to economics. 
B) the right of every citizen to know about the economic status of his/her country. 
C) the field that uses models of rational choice to study how governments operate. 
D) none of the above 
A) the vote of every politician with respect to economics. 
B) the right of every citizen to know about the economic status of his/her country. 
C) the field that uses models of rational choice to study how governments operate. 
D) none of the above C

Question 4

A free rider is a person who:

Accepted Answer

A) does not maximize utility. 
B) enjoys something only if he pays for it. 
C) acts irrationally. 
D) enjoys something without paying for it. 
A) does not maximize utility. 
B) enjoys something only if he pays for it. 
C) acts irrationally. 
D) enjoys something without paying for it.

Question 5

Self-interest theory of government is:

Accepted Answer

A) a way for the government to impose its will. 
B) the power of the government to overrule its citizen without their consent. 
C) explains why voters might establish implicit boundaries of government spending and taxes. 
D) explains why voters might establish explicit limits of government spending and taxes. 
A) a way for the government to impose its will. 
B) the power of the government to overrule its citizen without their consent. 
C) explains why voters might establish implicit boundaries of government spending and taxes. 
D) explains why voters might establish explicit limits of government spending and taxes.

Question 6

The marginal social benefit of an activity equals its marginal private benefit plus its marginal external benefit.

Accepted Answer

A) True 
 B)False

Question 7

Public goods and services are:

Accepted Answer

A) generally paid for voluntarily by private individuals. 
B) always produced and sold in the private market. 
C) generally subject to quotas. 
D) generally paid for with tax revenues. 
A) generally paid for voluntarily by private individuals. 
B) always produced and sold in the private market. 
C) generally subject to quotas. 
D) generally paid for with tax revenues.

Question 8

Which of the following contains most of the characteristics of a public good?

Accepted Answer

A) education 
B) trash collection 
C) public transportation 
D) fireworks shows 
A) education 
B) trash collection 
C) public transportation 
D) fireworks shows

Question 9

The ________ problem of public goods occurs because people can enjoy the benefits of these goods even when they do not have to pay for them.

Accepted Answer

A) moral hazard 
B) free-hand 
C) free-rider 
D) external cost 
A) moral hazard 
B) free-hand 
C) free-rider 
D) external cost

Question 10

Public goods are land,labor,and capital resources provided by households in return for payments from the government.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true?

Accepted Answer

A) Public goods are generally paid for by voluntary contributions. 
B) Public goods are generally paid for by the government with tax revenues. 
C) Private goods will not be produced in the private market. 
D) none of the above 
A) Public goods are generally paid for by voluntary contributions. 
B) Public goods are generally paid for by the government with tax revenues. 
C) Private goods will not be produced in the private market. 
D) none of the above

Question 12

Suppose it is that time of the year for the National Public radio station to invite every listener to pledge and support the station.Donna is a daily listener and decides to wait for others to contribute and support the station.Meanwhile she continues to get the benefit of public broadcasting.This is an example of the:

Accepted Answer

A) public good problem. 
B) free-rider problem. 
C) rival in consumption problem. 
D) drop-in-the-bucket problem. 
A) public good problem. 
B) free-rider problem. 
C) rival in consumption problem. 
D) drop-in-the-bucket problem.

Question 13

Every good or service that comes from the government is automatically considered a public good.

Accepted Answer

A) True 
 B)False

Question 14

The model of government based on small groups of people manipulating government for their own gain is:

Accepted Answer

A) conservative ideology. 
B) median-voter policy. 
C) special-interest politics. 
D) common resource strategy. 
A) conservative ideology. 
B) median-voter policy. 
C) special-interest politics. 
D) common resource strategy.

Question 15

Which of the following is true concerning public goods?

Accepted Answer

A) One person's enjoyment of a public good reduces another person's enjoyment from the same public good. 
B) People cannot be prevented from enjoying a public good. 
C) Public goods can be produced and patented by individuals. 
D) none of the above 
A) One person's enjoyment of a public good reduces another person's enjoyment from the same public good. 
B) People cannot be prevented from enjoying a public good. 
C) Public goods can be produced and patented by individuals. 
D) none of the above

Question 16

Which of the following would NOT be considered to be a public good?

Accepted Answer

A) national defense 
B) radio broadcasts 
C) police protection 
D) a newspaper 
A) national defense 
B) radio broadcasts 
C) police protection 
D) a newspaper

Question 17

Give an example of a public good.Explain what characteristics make this good a public good.

Accepted Answer

Student responses wi

Question 18

What distinguishes a public good from a private good?

Accepted Answer

A) Public goods are subject to the free-rider problem. 
B) Private goods are never produced by the government. 
C) Public goods are excludable,but nonrival. 
D) Private goods will not be produced in private markets unless the government is involved. 
A) Public goods are subject to the free-rider problem. 
B) Private goods are never produced by the government. 
C) Public goods are excludable,but nonrival. 
D) Private goods will not be produced in private markets unless the government is involved.

Question 19

The median voter group is:

Accepted Answer

A) a special interest group. 
B) a group of voters who express their opinions in television and radio advertisements. 
C) the large group of voters in the middle of the political spectrum. 
D) all of the above 
A) a special interest group. 
B) a group of voters who express their opinions in television and radio advertisements. 
C) the large group of voters in the middle of the political spectrum. 
D) all of the above

Question 20

The private market does NOT provide national defense because:

Accepted Answer

A) the resources needed to provide national defense are not available in the private market. 
B) the fixed cost of providing national defense is too high. 
C) it is impossible to prevent anyone from enjoying the benefit of national defense. 
D) it is an excludable and rival good. 
A) the resources needed to provide national defense are not available in the private market. 
B) the fixed cost of providing national defense is too high. 
C) it is impossible to prevent anyone from enjoying the benefit of national defense. 
D) it is an excludable and rival good.

The purchase of fire extinguishers by apartment dwellers provides benefits to their neighbors.Explain why this situation leads to an inefficient outcome.

Education generates external benefits.A free market with no government intervention will produce:

Public-choice economics is:

A free rider is a person who:

Self-interest theory of government is:

The marginal social benefit of an activity equals its marginal private benefit plus its marginal external benefit.

Public goods and services are:

Which of the following contains most of the characteristics of a public good?

The ________ problem of public goods occurs because people can enjoy the benefits of these goods even when they do not have to pay for them.

Public goods are land,labor,and capital resources provided by households in return for payments from the government.

Which of the following is true?

Every good or service that comes from the government is automatically considered a public good.

The model of government based on small groups of people manipulating government for their own gain is:

Which of the following is true concerning public goods?

Which of the following would NOT be considered to be a public good?

Give an example of a public good.Explain what characteristics make this good a public good.

What distinguishes a public good from a private good?

The median voter group is:

The private market does NOT provide national defense because:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 15: Public Goods and Public Choice

The purchase of fire extinguishers by apartment dwellers provides benefits to their neighbors.Explain why this situation leads to an inefficient outcome.

Education generates external benefits.A free market with no government intervention will produce:

Public-choice economics is:

A free rider is a person who:

Self-interest theory of government is:

The marginal social benefit of an activity equals its marginal private benefit plus its marginal external benefit.

Public goods and services are:

Which of the following contains most of the characteristics of a public good?

The ________ problem of public goods occurs because people can enjoy the benefits of these goods even when they do not have to pay for them.

Public goods are land,labor,and capital resources provided by households in return for payments from the government.

Which of the following is true?

Every good or service that comes from the government is automatically considered a public good.

The model of government based on small groups of people manipulating government for their own gain is:

Which of the following is true concerning public goods?

Which of the following would NOT be considered to be a public good?

Give an example of a public good.Explain what characteristics make this good a public good.

What distinguishes a public good from a private good?

The median voter group is:

The private market does NOT provide national defense because:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters