Question 1

If voters are rationally ignorant, then the interest of the bureaucracy to maximize its budget will result in an oversupply of a public good.

Accepted Answer

A) True 
 B)False

Question 2

The efficient quantity of a public good is provided when the economy's

Accepted Answer

A)  total benefit from the good equals its total cost. 
B)  total benefit from the good is less than its total cost. 
C)  marginal social benefit from the good equals its marginal social cost. 
D)  marginal social benefit from the good is greater than its marginal social cost. 
A)  total benefit from the good equals its total cost. 
B)  total benefit from the good is less than its total cost. 
C)  marginal social benefit from the good equals its marginal social cost. 
D)  marginal social benefit from the good is greater than its marginal social cost.

Question 3

Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?

Accepted Answer

The sailboat is a private good. The sail

Question 4

A free-rider problem exists if

Accepted Answer

A)  those consuming the good pay more than the cost of providing the good so that the producer's profits increase ("free ride") as a result of the overpayment. 
B)  those consuming the good pay nothing for it. 
C)  two consumers can jointly consume a good, which lowers the price per person. 
D)  a firm can obtain technology at a fair price. 
A)  those consuming the good pay more than the cost of providing the good so that the producer's profits increase ("free ride") as a result of the overpayment. 
B)  those consuming the good pay nothing for it. 
C)  two consumers can jointly consume a good, which lowers the price per person. 
D)  a firm can obtain technology at a fair price.

Question 5

A public choice is

Accepted Answer

A)  a decision that affects one person. 
B)  a decision that affects no one. 
C)  a decision made in public. 
D)  a decision that affects an entire society. 
A)  a decision that affects one person. 
B)  a decision that affects no one. 
C)  a decision made in public. 
D)  a decision that affects an entire society.

Question 6

A free rider is someone who

Accepted Answer

A)  pays for a good and then does not consume the good. 
B)  consumes a good without paying for it. 
C)  pays the dollar value that he or she places on a given amount of a public good. 
D)  pays the maximum amount that he or she is willing to pay for the good. 
A)  pays for a good and then does not consume the good. 
B)  consumes a good without paying for it. 
C)  pays the dollar value that he or she places on a given amount of a public good. 
D)  pays the maximum amount that he or she is willing to pay for the good.

Question 7

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 participate because the square quickly becomes crowded with no space left for latecomers. This celebration can be classified as

Accepted Answer

A)  rival and excludable. 
B)  non-rival and non-excludable. 
C)  non-rival and excludable. 
D)  rival and non-excludable. 
A)  rival and excludable. 
B)  non-rival and non-excludable. 
C)  non-rival and excludable. 
D)  rival and non-excludable.

Question 8

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week. How would Michigan public radio best be classified?

Accepted Answer

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

Question 9

Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. For residents of Long Beach Island, this barrier system would be a

Accepted Answer

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

Question 10

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $54, the efficient quantity of satellites is

Accepted Answer

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

Question 11

-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 fourth satellite?

Accepted Answer

A)  $36 
B)  $20 
C)  $18 
D)  $4 
A)  $36 
B)  $20 
C)  $18 
D)  $4

Question 12

Private goods are those for which consumption is

Accepted Answer

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

Question 13

The free-rider problem with a public good leads to

Accepted Answer

A)  inefficiency if the good is provided by only private markets with no government action. 
B)  overproduction if the good is provided by private markets. 
C)  underproduction if the good is provided by the government. 
D)  None of the above answers is correct. 
A)  inefficiency if the good is provided by only private markets with no government action. 
B)  overproduction if the good is provided by private markets. 
C)  underproduction if the good is provided by the government. 
D)  None of the above answers is correct.

Question 14

Rational ignorance about the efficient quantity of a public good can result in

Accepted Answer

A)  the principle of minimum differentiation. 
B)  excludable goods. 
C)  bureaucratic overprovision of a good. 
D)  the vertical summation of individual's marginal benefit curves. 
A)  the principle of minimum differentiation. 
B)  excludable goods. 
C)  bureaucratic overprovision of a good. 
D)  the vertical summation of individual's marginal benefit curves.

Question 15

A free rider is someone who

Accepted Answer

A)  creates an external benefit. 
B)  is irrational. 
C)  consumes only the goods he or she pays for. 
D)  enjoys the benefits of a good without paying for it. 
A)  creates an external benefit. 
B)  is irrational. 
C)  consumes only the goods he or she pays for. 
D)  enjoys the benefits of a good without paying for it.

Question 16

In the political market place, typical voters

Accepted Answer

A)  support policies that they think will make the poor better off. 
B)  fire bureaucrats who support efficient policies. 
C)  are fully informed. 
D)  are sometimes rationally ignorant about a policy. 
A)  support policies that they think will make the poor better off. 
B)  fire bureaucrats who support efficient policies. 
C)  are fully informed. 
D)  are sometimes rationally ignorant about a policy.

Question 17

An example of a public good is

Accepted Answer

A)  national defense services. 
B)  a Ford truck. 
C)  a loaf of bread. 
D)  a home computer. 
A)  national defense services. 
B)  a Ford truck. 
C)  a loaf of bread. 
D)  a home computer.

Question 18

Education at a private university is NOT a pure public good because it is

Accepted Answer

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

Question 19

When consumption is rival and excludable, the product is a

Accepted Answer

A)  public good. 
B)  private good. 
C)  mixed good. 
D)  service, not a good. 
A)  public good. 
B)  private good. 
C)  mixed good. 
D)  service, not a good.

Question 20

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

Accepted Answer

A)  a parking space 
B)  a car 
C)  a stop sign 
D)  a toll road 
A)  a parking space 
B)  a car 
C)  a stop sign 
D)  a toll road

If voters are rationally ignorant, then the interest of the bureaucracy to maximize its budget will result in an oversupply of a public good.

The efficient quantity of a public good is provided when the economy's

Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?

A free-rider problem exists if

A public choice is

A free rider is someone who

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week. How would Michigan public radio best be classified?

Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. For residents of Long Beach Island, this barrier system would be a

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $54, the efficient quantity of satellites is

-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 fourth satellite?

Private goods are those for which consumption is

The free-rider problem with a public good leads to

Rational ignorance about the efficient quantity of a public good can result in

A free rider is someone who

In the political market place, typical voters

An example of a public good is

Education at a private university is NOT a pure public good because it is

When consumption is rival and excludable, the product is a

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

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

If voters are rationally ignorant, then the interest of the bureaucracy to maximize its budget will result in an oversupply of a public good.

The efficient quantity of a public good is provided when the economy's

Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?

A free-rider problem exists if

A public choice is

A free rider is someone who

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week. How would Michigan public radio best be classified?

Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. For residents of Long Beach Island, this barrier system would be a

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $54, the efficient quantity of satellites is

-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 fourth satellite?

Private goods are those for which consumption is

The free-rider problem with a public good leads to

Rational ignorance about the efficient quantity of a public good can result in

A free rider is someone who

In the political market place, typical voters

An example of a public good is

Education at a private university is NOT a pure public good because it is

When consumption is rival and excludable, the product is a

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

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