Question 1

Public goods are those for which

Accepted Answer

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. 
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. B

Question 2

The principle of minimum differentiation reflects the

Accepted Answer

A)  tendency for firms to produce at minimum marginal cost in order to compete with one another. 
B)  tendency for political parties to make themselves identical to appeal to the median voter. 
C)  concept of minimizing the difference between total benefit and total cost to produce efficiently. 
D)  attempt to minimize the free-rider problem. 
A)  tendency for firms to produce at minimum marginal cost in order to compete with one another. 
B)  tendency for political parties to make themselves identical to appeal to the median voter. 
C)  concept of minimizing the difference between total benefit and total cost to produce efficiently. 
D)  attempt to minimize the free-rider problem. B

Question 3

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Accepted Answer

The free-rider problem occurs when people enjoy the benefits from a good or service without paying for it. The free-rider problem occurs with public goods because no one can be excluded from using them without paying for them. As a result, the free-rider problem is that the private market produces too little of these goods. To produce the efficient quantity, the government can intervene by taxing people and using those funds to pay for the public good.

Question 4

Katie Bobby
  
-The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $300 a piece, what is the efficient quantity to produce?

Accepted Answer

A)  0 
B)  1 
C)  2 
D)  3 
A)  0 
B)  1 
C)  2 
D)  3

Question 5

-The above figure shows the marginal benefit and marginal cost curves for a public good. The efficient quantity is

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  zero units supplied. 
A)  A. 
B)  B. 
C)  C. 
D)  zero units supplied.

Question 6

Explain why some amount of ignorance can be rational.

Accepted Answer

Acquiring information is not costless. T

Question 7

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week. The on-air fundraiser, which ran during October 2010, generated over 7400 pledges from donors. The money raised helps pay for programming costs at the station, with membership support being the single largest source of income. The 392,600 listeners who did not call and donate can be classified as what?

Accepted Answer

A)  free riders 
B)  marginal beneficiaries 
C)  rival consumers 
D)  rationally ignorant 
A)  free riders 
B)  marginal beneficiaries 
C)  rival consumers 
D)  rationally ignorant

Question 8

A good which is nonrival and nonexcludable is

Accepted Answer

A)  a public good. 
B)  a private good. 
C)  a social good. 
D)  an externality. 
A)  a public good. 
B)  a private good. 
C)  a social good. 
D)  an externality.

Question 9

-A city of 50,000 people is considering installing a sewage disposal system. The total fixed cost of the system is $100,000 per month. The marginal benefit to an average city resident from the first thousand gallons of capacity is 1.4 cents. The table shows the relationship between the system's capacity, its total cost, and the marginal benefit received by an average city resident:
a) Draw the marginal social cost curve of the sewage system and the residents' marginal social benefit curve. What is the capacity that achieves maximum net benefit?
b) How much will each person have to pay in taxes to support the efficient capacity level?
c) What is the political equilibrium if voters are well informed?

Accepted Answer

@#IMG-DLM& a) See the figure above. The marginal c

Question 10

-The figure above shows the market for polio vaccination in Africa.
a) If the market is competitive and left unregulated, how many doses of vaccine will be administered?
b) If the Melinda and Bill Gates Foundation underwrites the cost of the vaccine by paying for a large fraction of the preparation and delivery cost, what will happen to the number of doses administered? Why?

Accepted Answer

a) If the market is competitive and left

Question 11

In the United States, the smallest source of expenditure on healthcare is

Accepted Answer

A)  government expenditure. 
B)  private insurance expenditure. 
C)  out-of-pocket expenditure. 
D)  unknown. 
A)  government expenditure. 
B)  private insurance expenditure. 
C)  out-of-pocket expenditure. 
D)  unknown.

Question 12

-Broomfield city council is deciding how many police officers the city needs. Broomfield's population is 10,000 people. The marginal cost of a police officer is $60,000 per year. The marginal benefit schedule of an average city resident from police protection is shown in the table above. Police protection is a public good. The efficient number of police officers in Broomfield is

Accepted Answer

A)  2. 
B)  3. 
C)  4. 
D)  6. 
A)  2. 
B)  3. 
C)  4. 
D)  6.

Question 13

What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?

Accepted Answer

A good is nonexcludable if everyone bene

Question 14

Suppose that the marginal social benefit from another unit of a public good is less than the marginal social cost of producing it. Then

Accepted Answer

A)  the principle of minimum differentiation means that production should be decreased. 
B)  the number of free riders is at its efficient amount. 
C)  less of the product should be produced because its provision exceeds the efficient level. 
D)  more of the product should be produced because its provision is less than the efficient level. 
A)  the principle of minimum differentiation means that production should be decreased. 
B)  the number of free riders is at its efficient amount. 
C)  less of the product should be produced because its provision exceeds the efficient level. 
D)  more of the product should be produced because its provision is less than the efficient level.

Question 15

What are the two features of a public good?

Accepted Answer

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

Question 16

"The Internet is nonrival, which means it's a public good." Do you agree or disagree? Explain.

Accepted Answer

The statement is incorrect. A public goo

Question 17

Because of free riders, a private, unregulated market would not produce the efficient quantity of a public good.

Accepted Answer

A) True 
 B)False

Question 18

A free rider problem is a problem associated with

Accepted Answer

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

Question 19

-Broomfield city council is deciding how many police officers the city needs. Broomfield's population is 10,000 people. The marginal cost of a police officer is $60,000 per year. The marginal benefit schedule of an average city resident from police protection is shown in the table above. Police protection is a public good. If voters in Broomfield are rationally ignorant and the police department achieves the highest attainable budget, the political equilibrium is ________ police officers.

Accepted Answer

A)  6 
B)  7 
C)  4 
D)  3 
A)  6 
B)  7 
C)  4 
D)  3

Question 20

The economy's marginal benefit curve for a public good is found by ________ for all individuals.

Accepted Answer

A)  vertically summing the marginal benefit curves 
B)  vertically summing the total benefit curves 
C)  horizontally summing the total benefit curves 
D)  horizontally summing the marginal benefit curves 
A)  vertically summing the marginal benefit curves 
B)  vertically summing the total benefit curves 
C)  horizontally summing the total benefit curves 
D)  horizontally summing the marginal benefit curves

Public goods are those for which

The principle of minimum differentiation reflects the

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Katie Bobby -The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $300 a piece, what is the efficient quantity to produce?

-The above figure shows the marginal benefit and marginal cost curves for a public good. The efficient quantity is

Explain why some amount of ignorance can be rational.

A good which is nonrival and nonexcludable is

In the United States, the smallest source of expenditure on healthcare is

What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?

Suppose that the marginal social benefit from another unit of a public good is less than the marginal social cost of producing it. Then

What are the two features of a public good?

"The Internet is nonrival, which means it's a public good." Do you agree or disagree? Explain.

Because of free riders, a private, unregulated market would not produce the efficient quantity of a public good.

A free rider problem is a problem associated with

The economy's marginal benefit curve for a public good is found by ________ for all individuals.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

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Exam 16: Public Choices, Public Goods, and Healthcare

Public goods are those for which

The principle of minimum differentiation reflects the

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Katie Bobby -The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $300 a piece, what is the efficient quantity to produce?

-The above figure shows the marginal benefit and marginal cost curves for a public good. The efficient quantity is

Explain why some amount of ignorance can be rational.

A good which is nonrival and nonexcludable is

In the United States, the smallest source of expenditure on healthcare is

What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?

Suppose that the marginal social benefit from another unit of a public good is less than the marginal social cost of producing it. Then

What are the two features of a public good?

"The Internet is nonrival, which means it's a public good." Do you agree or disagree? Explain.

Because of free riders, a private, unregulated market would not produce the efficient quantity of a public good.

A free rider problem is a problem associated with

The economy's marginal benefit curve for a public good is found by ________ for all individuals.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters