Exam 16: Public Choices, Public Goods, and Healthcare

A school of tuna swimming in the ocean is

Every year as the clock nears midnight on December 31st, the eyes of the world turn to Times Square in New York City to watch the famous ball drop at midnight. The event is open to everyone, but it is advised you arrive early to be able to participate because the square quickly becomes crowded with no space left for latecomers. This celebration is most like a

-Mike, Joe, and Sam are roommates. They need lamps for their common living room. Lamps in their living room are a public good for these roommates. The marginal benefit that each individual receives from varying numbers of lamps in the living room is given in the table above. The marginal benefit for the second lamp to this group of roommates taken as a whole is

"To find the economy's marginal social benefit curve for a public good, we sum the individual marginal benefit curves horizontally." True or false? Explain.

-Suppose two individuals, Pooh and Piglet, desire protection (provided by Tigger) for their community, The Hundred Acre Wood, from heffalumps. Protection is a public good. The marginal cost of protection as well as Piglet's and Pooh's marginal benefits from protection are in the table above. What is the quantity of protection that achieves the maximum net benefit?

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

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

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

Long Beach Island, off the coast of New Jersey, is considering building a system of satellite towers that will enhance communication during emergencies such as hurricanes. The efficient quantity of satellite towers is definitely the quantity of such that the

What are the differences between public goods and private goods?

Free riders are NOT a problem in the market for a private good because

Why is society's marginal social benefit curve for a public good found by vertically summing individual marginal benefit curves and not by horizontal summation as is the case for private goods?

A common resource is nonrival but excludable.

The United States uses a single payer model of healthcare in which the government pays for all healthcare. Because a single payer model of health care creates no deadweight loss, most economists agree that the U.S. system of health care is efficient.

Rational ignorance says that voters will

Which of the following would most likely be provided by a natural monopoly?

The economy's marginal social benefit curve for a public good is obtained by

Which of the following would most likely be a public good?

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week and is funded through listener donations. If Michigan Radio suffers from the free-rider problem then the market would provide an ________ quantity of the public good.

The efficient quantity of a public good is the quantity that sets the marginal social benefit from the good equal to the good's marginal social cost.