Question 1

An uncrowded toll road is ________ because it is ________.

Accepted Answer

A)  a public good; both nonrival and nonexcludable 
B)  not a public good; nonrival but excludable 
C)  not a public good; nonexcludable but rival 
D)  not a public good; both rival and excludable 
A)  a public good; both nonrival and nonexcludable 
B)  not a public good; nonrival but excludable 
C)  not a public good; nonexcludable but rival 
D)  not a public good; both rival and excludable

Question 2

Private markets will NOT provide the efficient quantity of a public good because

Accepted Answer

A)  of the principle of minimum differentiation. 
B)  public goods are rival and excludable. 
C)  of rational ignorance. 
D)  of the free-rider problem. 
A)  of the principle of minimum differentiation. 
B)  public goods are rival and excludable. 
C)  of rational ignorance. 
D)  of the free-rider problem.

Question 3

What is the principle of minimum differentiation?

Accepted Answer

The principle of minimum differentiation

Question 4

The political market place requires all EXCEPT

Accepted Answer

A)  diplomats. 
B)  firms. 
C)  voters. 
D)  politicians. 
A)  diplomats. 
B)  firms. 
C)  voters. 
D)  politicians.

Question 5

-The table above provides information about the marginal social cost and marginal social benefit of street lights, which are a public good.
a) What quantity would a private company provide? Why?
b) What is the efficient quantity?

Accepted Answer

a) Street lights are a public good, so a

Question 6

An example of a natural monopoly is

Accepted Answer

A)  a house. 
B)  the Internet. 
C)  air traffic control. 
D)  fish in the ocean. 
A)  a house. 
B)  the Internet. 
C)  air traffic control. 
D)  fish in the ocean.

Question 7

If the consumption of a good decreases the quantity available for another person, the good is rival.

Accepted Answer

A) True 
 B)False

Question 8

How is the efficient quantity of public goods determined?

Accepted Answer

The efficient quantity of a public good

Question 9

A free rider problem is created by private goods.

Accepted Answer

A) True 
 B)False

Question 10

A good or service or a resource is excludable 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 11

In an unregulated market for healthcare, there is

Accepted Answer

A)  a deadweight loss from over-providing healthcare. 
B)  a deadweight loss from under-providing healthcare. 
C)  no deadweight loss. 
D)  Any of the above could be correcting depending on how the marginal cost paid by producers compares to the marginal social cost. 
A)  a deadweight loss from over-providing healthcare. 
B)  a deadweight loss from under-providing healthcare. 
C)  no deadweight loss. 
D)  Any of the above could be correcting depending on how the marginal cost paid by producers compares to the marginal social cost.

Question 12

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

Accepted Answer

A)  all the individuals can consume the same unit of the good. 
B)  more than one supplier can provide the good. 
C)  the same unit of the good cannot be simultaneously shared by more than one person at a time. 
D)  the government can supply a public good at a lower cost than can a private supplier. 
A)  all the individuals can consume the same unit of the good. 
B)  more than one supplier can provide the good. 
C)  the same unit of the good cannot be simultaneously shared by more than one person at a time. 
D)  the government can supply a public good at a lower cost than can a private supplier.

Question 13

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. Listeners can access Sirius satellite radio through a subscription to the service. Michigan Radio is a ________ and Sirius satellite radio is a ________.

Accepted Answer

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

Question 14

If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it

Accepted Answer

A)  decreases the capacity of the sewage system. 
B)  does not change the capacity of the sewage system. 
C)  increases the capacity of the sewage system. 
D)  increases the sewerage charge that the residents pay. 
A)  decreases the capacity of the sewage system. 
B)  does not change the capacity of the sewage system. 
C)  increases the capacity of the sewage system. 
D)  increases the sewerage charge that the residents pay.

Question 15

Cable television is an example of a public good.

Accepted Answer

A) True 
 B)False

Question 16

-The table above shows the marginal benefit from providing police protection in a community of two people, Jake and Elwood. Police protection is a public good.
a) What is the marginal social benefit to community from the 4th police car on duty?
b) If the marginal social cost of a police car on duty is $37, what is the efficient number of cars on duty?
c) If the marginal social cost of a police car on duty is $70, what is the efficient number of cars on duty?

Accepted Answer

a) The community's marginal social benef

Question 17

-The table above gives information on the perceived marginal (private) benefit and marginal social benefit associated with vaccination against varicella (chicken pox). If the marginal cost of a varicella vaccination is $10, to achieve an efficient quantity of vaccinations, the government could provide a subsidy of

Accepted Answer

A)  $4 per vaccination. 
B)  $3 per vaccination. 
C)  $2 per vaccination 
D)  $1 per vaccination. 
A)  $4 per vaccination. 
B)  $3 per vaccination. 
C)  $2 per vaccination 
D)  $1 per vaccination.

Question 18

The marginal social benefit curve from a public good is found by horizontally summing the marginal benefit curves of all individuals.

Accepted Answer

A) True 
 B)False

Question 19

A museum is NOT a public good if

Accepted Answer

A)  there can be no congestion. 
B)  the museum receives donations from members of the public. 
C)  an entry fee is charged and people are denied entry if they do not pay. 
D)  the general public typically does not go to the museum. 
A)  there can be no congestion. 
B)  the museum receives donations from members of the public. 
C)  an entry fee is charged and people are denied entry if they do not pay. 
D)  the general public typically does not go to the museum.

Question 20

The free-rider problem can arise when consumption of a good is

Accepted Answer

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

An uncrowded toll road is because it is .

Private markets will NOT provide the efficient quantity of a public good because

What is the principle of minimum differentiation?

The political market place requires all EXCEPT

-The table above provides information about the marginal social cost and marginal social benefit of street lights, which are a public good. a) What quantity would a private company provide? Why? b) What is the efficient quantity?

An example of a natural monopoly is

If the consumption of a good decreases the quantity available for another person, the good is rival.

How is the efficient quantity of public goods determined?

A free rider problem is created by private goods.

A good or service or a resource is excludable if

In an unregulated market for healthcare, there is

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

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. Listeners can access Sirius satellite radio through a subscription to the service. Michigan Radio is a and Sirius satellite radio is a .

If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it

Cable television is an example of a public good.

The marginal social benefit curve from a public good is found by horizontally summing the marginal benefit curves of all individuals.

A museum is NOT a public good if

The free-rider problem can arise when consumption of a good is

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

An uncrowded toll road is ________ because it is ________.

Private markets will NOT provide the efficient quantity of a public good because

What is the principle of minimum differentiation?

The political market place requires all EXCEPT

-The table above provides information about the marginal social cost and marginal social benefit of street lights, which are a public good. a) What quantity would a private company provide? Why? b) What is the efficient quantity?

An example of a natural monopoly is

If the consumption of a good decreases the quantity available for another person, the good is rival.

How is the efficient quantity of public goods determined?

A free rider problem is created by private goods.

A good or service or a resource is excludable if

In an unregulated market for healthcare, there is

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it

Cable television is an example of a public good.

The marginal social benefit curve from a public good is found by horizontally summing the marginal benefit curves of all individuals.

A museum is NOT a public good if

The free-rider problem can arise when consumption of a good is

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

An uncrowded toll road is because it is .