Question 1

When government action leads to inefficiency, it is known as

Accepted Answer

A)  government failure. 
B)  government as usual. 
C)  lack of government trust. 
D)  politics. 
A)  government failure. 
B)  government as usual. 
C)  lack of government trust. 
D)  politics.

Question 2

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the third satellite?

Accepted Answer

A)  $30 
B)  $27 
C)  $54 
D)  $6 
A)  $30 
B)  $27 
C)  $54 
D)  $6

Question 3

Which of the following is TRUE about public goods?

Accepted Answer

A)  Consumption is rival and nonexcludable. 
B)  Consumption is nonrival and excludable. 
C)  Efficient provision occurs at the level of output at which total benefit is equal to total cost. 
D)  Unregulated private markets produce less than the efficient quantity of a public good. 
A)  Consumption is rival and nonexcludable. 
B)  Consumption is nonrival and excludable. 
C)  Efficient provision occurs at the level of output at which total benefit is equal to total cost. 
D)  Unregulated private markets produce less than the efficient quantity of a public good.

Question 4

Goods that are nonrival and nonexcludable are called

Accepted Answer

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

Question 5

A free-rider problem occurs when the

Accepted Answer

A)  good is excludable. 
B)  good is offered at no charge. 
C)  good is rival. 
D)  good is nonexcludable. 
A)  good is excludable. 
B)  good is offered at no charge. 
C)  good is rival. 
D)  good is nonexcludable.

Question 6

The free-rider problem is the absence of an incentive for

Accepted Answer

A)  firms to produce public goods. 
B)  people to use common resources. 
C)  people to pay for what they consume. 
D)  people to vote. 
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 7

Some years ago The Wall Street Journal reported that the government of Thailand "plans to launch a chain of more than 3,000 Thai restaurants world-wide over the next five years, with the largest number, more than 1,000, slated for the United States." The Thai government will have a 30 percent minority stake in the restaurants and the rest will be given to Thai owners. The country's deputy commerce minister explains that the government will play an active role in drawing up menus, making sure that genuine Thai food is served and ensuring that 70 percent of supplies for the restaurants are imported from Thailand. Because the Thai government will be part owner of these restaurants, are these restaurants public goods?

Accepted Answer

Although the government of Thailand has

Question 8

The free-rider problem is the reason way private markets are unlikely to achieve the efficient level of production of

Accepted Answer

A)  normal goods. 
B)  excludable goods. 
C)  public goods. 
D)  private goods. 
A)  normal goods. 
B)  excludable goods. 
C)  public goods. 
D)  private goods.

Question 9

How does the principle of minimum differentiation relate to the free-rider problem?

Accepted Answer

The free-rider problem requires that the

Question 10

A private good is ________ and ________.

Accepted Answer

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

Question 11

A movie shown on a pay-per-view cable station is an example of

Accepted Answer

A)  an excludable and rival good. 
B)  a nonexcludable and rival good. 
C)  an excludable and nonrival good. 
D)  a nonexcludable and nonrival good. 
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 12

Which of the following is the BEST example of a good that is nonrival and excludable?

Accepted Answer

A)  a can of Mountain Dew 
B)  fish in the ocean 
C)  cable television 
D)  national defense 
A)  a can of Mountain Dew 
B)  fish in the ocean 
C)  cable television 
D)  national defense

Question 13

To two hunters, a deer running in a forest is

Accepted Answer

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

Question 14

A good or service or a resource is nonrival if

Accepted Answer

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. 
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

Why isn't national defense provided by free markets?

Accepted Answer

National defense is a public good. This

Question 16

Free riding is NOT a problem in the market for a private good because

Accepted Answer

A)  people who do not pay for the good can be excluded from consumption. 
B)  the good is a rival good. 
C)  the market eliminates the problem of externalities. 
D)  The question errs because free riding is a problem in providing private goods. 
A)  people who do not pay for the good can be excluded from consumption. 
B)  the good is a rival good. 
C)  the market eliminates the problem of externalities. 
D)  The question errs because free riding is a problem in providing private goods.

Question 17

Which of the following is rival and excludable?

Accepted Answer

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

Question 18

Public goods are I. nonexcludable.
II) nonrival.

Accepted Answer

A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II 
A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II

Question 19

Which of the following nations spends more per person on healthcare than the United States?

Accepted Answer

A)  Switzerland 
B)  United Kingdom 
C)  Germany 
D)  None of the above nations spend more on healthcare. 
A)  Switzerland 
B)  United Kingdom 
C)  Germany 
D)  None of the above nations spend more on healthcare.

Question 20

-The figure above illustrates the marginal benefit and marginal cost of different quantities of national defense. What is the political equilibrium if voters are well informed?

Accepted Answer

A)  0 units 
B)  between 0 and 3 units 
C)  3 units 
D)  5 units 
A)  0 units 
B)  between 0 and 3 units 
C)  3 units 
D)  5 units

When government action leads to inefficiency, it is known as

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the third satellite?

Which of the following is TRUE about public goods?

Goods that are nonrival and nonexcludable are called

A free-rider problem occurs when the

The free-rider problem is the absence of an incentive for

The free-rider problem is the reason way private markets are unlikely to achieve the efficient level of production of

How does the principle of minimum differentiation relate to the free-rider problem?

A private good is and .

A movie shown on a pay-per-view cable station is an example of

Which of the following is the BEST example of a good that is nonrival and excludable?

To two hunters, a deer running in a forest is

A good or service or a resource is nonrival if

Why isn't national defense provided by free markets?

Free riding is NOT a problem in the market for a private good because

Which of the following is rival and excludable?

Public goods are I. nonexcludable. II) nonrival.

Which of the following nations spends more per person on healthcare than the United States?

-The figure above illustrates the marginal benefit and marginal cost of different quantities of national defense. What is the political equilibrium if voters are well informed?

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

Exam 16: Public Choices, Public Goods, and Healthcare

When government action leads to inefficiency, it is known as

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the third satellite?

Which of the following is TRUE about public goods?

Goods that are nonrival and nonexcludable are called

A free-rider problem occurs when the

The free-rider problem is the absence of an incentive for

The free-rider problem is the reason way private markets are unlikely to achieve the efficient level of production of

How does the principle of minimum differentiation relate to the free-rider problem?

A private good is ________ and ________.

A movie shown on a pay-per-view cable station is an example of

Which of the following is the BEST example of a good that is nonrival and excludable?

To two hunters, a deer running in a forest is

A good or service or a resource is nonrival if

Why isn't national defense provided by free markets?

Free riding is NOT a problem in the market for a private good because

Which of the following is rival and excludable?

Public goods are I. nonexcludable. II) nonrival.

Which of the following nations spends more per person on healthcare than the United States?

-The figure above illustrates the marginal benefit and marginal cost of different quantities of national defense. What is the political equilibrium if voters are well informed?

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

A private good is and .