Question 1

Why isn't national defense provided by free markets?

Accepted Answer

National defense is a public good.This f

Question 2

Why is watching sports more important to many prospective voters than watching the news? In your answer,mention the role played by rational ignorance and the cost of gathering information.

Accepted Answer

It takes a great deal of time to learn a

Question 3

The free-rider problem exists because

Accepted Answer

A)  private goods or services cause some people to want to take them for free. 
B)  some goods or services are excludable and cause envy for those who don't have them. 
C)  some goods or services that are rival and leave some people without them. 
D)  people cannot be excluded from consuming public goods even if they don't pay for them. 
E)  people must all consume the same public good and so everyone wants to pay for it. 
A)  private goods or services cause some people to want to take them for free. 
B)  some goods or services are excludable and cause envy for those who don't have them. 
C)  some goods or services that are rival and leave some people without them. 
D)  people cannot be excluded from consuming public goods even if they don't pay for them. 
E)  people must all consume the same public good and so everyone wants to pay for it.

Question 4

The reason that private provision of a public good often leads to inefficiency is because

Accepted Answer

A)  private property rights are too costly to enforce. 
B)  marginal private benefits are too costly to calculate. 
C)  no one has the incentive to pay for the good. 
D)  no one has an incentive to conserve the good. 
E)  the tragedy of the commons occurs and too many public goods are provided. 
A)  private property rights are too costly to enforce. 
B)  marginal private benefits are too costly to calculate. 
C)  no one has the incentive to pay for the good. 
D)  no one has an incentive to conserve the good. 
E)  the tragedy of the commons occurs and too many public goods are provided.

Question 5

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The market equilibrium with no government intervention is raising ________.

Accepted Answer

A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct. 
A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct.

Question 6

A good or resource from which no one can be excluded and which is nonrival is a

Accepted Answer

A)  government good. 
B)  private good. 
C)  common good. 
D)  public good. 
E)  common resource. 
A)  government good. 
B)  private good. 
C)  common good. 
D)  public good. 
E)  common resource.

Question 7

Bureaucrats

Accepted Answer

A)  have no incentive to influence the quantity of public goods provided by the government. 
B)  have no role in the production of public goods. 
C)  attempt to maximize their budget. 
D)  make political policy. 
E)  are generally rationally ignorant about the size of their budget. 
A)  have no incentive to influence the quantity of public goods provided by the government. 
B)  have no role in the production of public goods. 
C)  attempt to maximize their budget. 
D)  make political policy. 
E)  are generally rationally ignorant about the size of their budget.

Question 8

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Level of contaminates } \
\text { (parts per million) }
\end{array} & \begin{array} { c } 
\text { Marginal benef it } \
\text { (dollars per year) }
\end{array} & \begin{array} { c } 
\text { Marginal cost } \
\text { (dollars per year) }
\end{array} \
\hline 20 & 2 & 0 \
15 & 7 & 4 \
10 & 12 & 12 \
5 & 16 & 16 \
0 & 20 & 24 \
\hline
\end{array}$$
-Ten homeowners live around Lake Alice.Unfortunately,the lake is contaminated with various chemicals and the level of contamination is currently 20 parts per million.All the homeowners benefit equally if the level of contamination is reduced.The table above gives the marginal cost and marginal benefit for removing the contaminants from the lake.
a.What will be the parts per million if the homeowners alone are in charge of reducing the contaminants?
b.What is the efficient amount of contamination?

Accepted Answer

a.Homeowners will not reduce the contami

Question 9

A good that is ________ and ________ is a ________.

Accepted Answer

A)  rival; excludable; private good 
B)  rival; excludable; public good 
C)  nonrival; excludable; public good 
D)  rival; nonexcludable; private good 
E)  nonrival; nonexcludable; private good 
A)  rival; excludable; private good 
B)  rival; excludable; public good 
C)  nonrival; excludable; public good 
D)  rival; nonexcludable; private good 
E)  nonrival; nonexcludable; private good

Question 10

A good is nonexcludable if

Accepted Answer

A)  only the government can produce it. 
B)  nobody can be excluded from enjoying the benefits of the good. 
C)  when you pay for the good, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, that means there is no less for someone else. 
E)  it is also nonrival. 
A)  only the government can produce it. 
B)  nobody can be excluded from enjoying the benefits of the good. 
C)  when you pay for the good, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, that means there is no less for someone else. 
E)  it is also nonrival.

Question 11

Competition in the political marketplace can result in the efficient provision of a public good if

Accepted Answer

A)  there is only one political party. 
B)  voters' preferences are unknown. 
C)  benefits are small. 
D)  voters are well informed and evaluate the alternatives. 
E)  politicians need to be elected by majority votes. 
A)  there is only one political party. 
B)  voters' preferences are unknown. 
C)  benefits are small. 
D)  voters are well informed and evaluate the alternatives. 
E)  politicians need to be elected by majority votes.

Question 12

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

Accepted Answer

A)  the principle of minimum differentiation. 
B)  provision of a public good. 
C)  rational ignorance. 
D)  overproduction of a private good. 
E)  overproduction of a public good. 
A)  the principle of minimum differentiation. 
B)  provision of a public good. 
C)  rational ignorance. 
D)  overproduction of a private good. 
E)  overproduction of a public good.

Question 13

Voters typically have information only about issues that have a perceptible effect on their well-being and tend not to have information about other issues.Behavior such as this is known as

Accepted Answer

A)  voter preferences. 
B)  inefficient overprovision. 
C)  political competition. 
D)  rational ignorance. 
E)  the tragedy of voters. 
A)  voter preferences. 
B)  inefficient overprovision. 
C)  political competition. 
D)  rational ignorance. 
E)  the tragedy of voters.

Question 14

A good or resource is excludable if

Accepted Answer

A)  only the government can produce them. 
B)  nobody can be excluded from enjoying the benefits of the good or resource. 
C)  when you pay for the good or resource, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, that means there is one less for someone else. 
E)  it is a common resource. 
A)  only the government can produce them. 
B)  nobody can be excluded from enjoying the benefits of the good or resource. 
C)  when you pay for the good or resource, you are guaranteed to be the sole consumer. 
D)  when you consume a unit, that means there is one less for someone else. 
E)  it is a common resource.

Question 15

National defense is a ________ because ________.

Accepted Answer

A)  public good; it can be an overused resource 
B)  public good; it is nonrival and nonexcludable 
C)  common resource; no one has the incentive to pay for his or her share 
D)  private good; no one has an incentive to conserve the good 
E)  common resource; it suffers from the tragedy of the commons 
A)  public good; it can be an overused resource 
B)  public good; it is nonrival and nonexcludable 
C)  common resource; no one has the incentive to pay for his or her share 
D)  private good; no one has an incentive to conserve the good 
E)  common resource; it suffers from the tragedy of the commons

Question 16

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

Accepted Answer

A)  the free-rider problem. 
B)  the principle of minimum differentiation. 
C)  the public provision of a good. 
D)  a public good. 
E)  rational ignorance on the part of Burger King. 
A)  the free-rider problem. 
B)  the principle of minimum differentiation. 
C)  the public provision of a good. 
D)  a public good. 
E)  rational ignorance on the part of Burger King.

Question 17

When Jean makes a decision  NOT  to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

Accepted Answer

A)  rational exuberance. 
B)  irrational exuberance. 
C)  irrational intelligence. 
D)  rational ignorance. 
E)  the principle of minimum ignorance. 
A)  rational exuberance. 
B)  irrational exuberance. 
C)  irrational intelligence. 
D)  rational ignorance. 
E)  the principle of minimum ignorance.

Question 18

A public good

Accepted Answer

A)  can only be consumed by one person at a time. 
B)  can be consumed simultaneously by many people. 
C)  is any good provided by a company owned by a member of the public. 
D)  is any good provided by government. 
E)  is both rival and excludable. 
A)  can only be consumed by one person at a time. 
B)  can be consumed simultaneously by many people. 
C)  is any good provided by a company owned by a member of the public. 
D)  is any good provided by government. 
E)  is both rival and excludable.

Question 19

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 peopl

Question 20

An example of a common resource is

Accepted Answer

A)  a bridge. 
B)  a non-crowded movie theater. 
C)  a tuna in the ocean. 
D)  national defense. 
E)  All of the above answers are correct. 
A)  a bridge. 
B)  a non-crowded movie theater. 
C)  a tuna in the ocean. 
D)  national defense. 
E)  All of the above answers are correct.

Why isn't national defense provided by free markets?

Why is watching sports more important to many prospective voters than watching the news? In your answer,mention the role played by rational ignorance and the cost of gathering information.

The free-rider problem exists because

The reason that private provision of a public good often leads to inefficiency is because

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The market equilibrium with no government intervention is raising ________.

A good or resource from which no one can be excluded and which is nonrival is a

Bureaucrats

A good that is and is a .

A good is nonexcludable if

Competition in the political marketplace can result in the efficient provision of a public good if

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

Voters typically have information only about issues that have a perceptible effect on their well-being and tend not to have information about other issues.Behavior such as this is known as

A good or resource is excludable if

National defense is a because .

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

A public good

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

An example of a common resource is

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Public Goods and Common Resources

Why isn't national defense provided by free markets?

Why is watching sports more important to many prospective voters than watching the news? In your answer,mention the role played by rational ignorance and the cost of gathering information.

The free-rider problem exists because

The reason that private provision of a public good often leads to inefficiency is because

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The market equilibrium with no government intervention is raising ________.

A good or resource from which no one can be excluded and which is nonrival is a

Bureaucrats

A good that is ________ and ________ is a ________.

A good is nonexcludable if

Competition in the political marketplace can result in the efficient provision of a public good if

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

Voters typically have information only about issues that have a perceptible effect on their well-being and tend not to have information about other issues.Behavior such as this is known as

A good or resource is excludable if

National defense is a ________ because ________.

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

A public good

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

An example of a common resource is

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

A good that is and is a .

National defense is a because .