Question 1

Because people can enjoy the benefits of public goods whether they pay for them or not,they are usually unwilling to pay for them.This is known as the

Accepted Answer

A)  drop-in-the-bucket problem. 
B)  nonexcludable problem. 
C)  nonrival problem. 
D)  free-rider problem. 
A)  drop-in-the-bucket problem. 
B)  nonexcludable problem. 
C)  nonrival problem. 
D)  free-rider problem.

Question 2

If education results in external benefits,the government could subsidize education to lead the market to an inefficient level of output.

Accepted Answer

A) True 
 B)False

Question 3

Recall the Application about space debris in the atmosphere to answer the following question(s).
-Recall the Application.What kind of problem does global weather observation face?

Accepted Answer

A)  Information gathered by one country is nonrival and therefore produces a free rider problem. 
B)  No single organization gathers all the information to reveal the big weather picture. 
C)  Some parts of the world received little to no monitoring. 
D)  all of the above 
A)  Information gathered by one country is nonrival and therefore produces a free rider problem. 
B)  No single organization gathers all the information to reveal the big weather picture. 
C)  Some parts of the world received little to no monitoring. 
D)  all of the above

Question 4

The median-voter theory suggests that different political parties will not adopt the same position as the median voter to distinguish from the competition.

Accepted Answer

A) True 
 B)False

Question 5

Public goods and services are

Accepted Answer

A)  generally paid for voluntarily by private individuals. 
B)  always produced and sold in the private market. 
C)  generally subject to quotas. 
D)  generally paid for with tax revenues. 
A)  generally paid for voluntarily by private individuals. 
B)  always produced and sold in the private market. 
C)  generally subject to quotas. 
D)  generally paid for with tax revenues.

Question 6

Activities that provide external benefits

Accepted Answer

A)  should be taxed so that the recipients of the benefits pay for them; otherwise inefficiency will result. 
B)  may be subsidized by the government to give decision makers an incentive to consider increasing their consumption. 
C)  will not result in inefficiency if those benefits are not considered. 
D)  all of the above 
A)  should be taxed so that the recipients of the benefits pay for them; otherwise inefficiency will result. 
B)  may be subsidized by the government to give decision makers an incentive to consider increasing their consumption. 
C)  will not result in inefficiency if those benefits are not considered. 
D)  all of the above

Question 7

Which of the following would be an example of an external benefit?

Accepted Answer

A)  More people start to ride the bus and as a result air pollution is reduced. 
B)  Firms are able to reduce their costs of production by using a more efficient technology. 
C)  The government requires polluting firms to pay a special tax. 
D)  A firm has just gotten permission to open a landfill on property that is adjacent to your home. 
A)  More people start to ride the bus and as a result air pollution is reduced. 
B)  Firms are able to reduce their costs of production by using a more efficient technology. 
C)  The government requires polluting firms to pay a special tax. 
D)  A firm has just gotten permission to open a landfill on property that is adjacent to your home.

Question 8

The government is able to use its taxing power to provide a good that would otherwise not be provided.

Accepted Answer

A) True 
 B)False

Question 9

In the absence of government,an underallocation of resources generally exists for

Accepted Answer

A)  goods with external costs. 
B)  imported goods and services. 
C)  public goods. 
D)  all of the above 
A)  goods with external costs. 
B)  imported goods and services. 
C)  public goods. 
D)  all of the above

Question 10

Which of the following would be typically classified as a public good?

Accepted Answer

A)  postal delivery 
B)  national defense 
C)  toll roads 
D)  college education 
A)  postal delivery 
B)  national defense 
C)  toll roads 
D)  college education

Question 11

Why might a politician start a costly spending program if its costs exceed its social benefits?

Accepted Answer

A)  The politician is trying to find ways to raise more money for the next election. 
B)  The politician gains prestige and voters are not well informed of the benefits and costs. 
C)  Voters do not care about the costs of programs, as long as their taxes do not go up. 
D)  The costs cannot be measured therefore the politicians focus on the benefits which are explicit. 
A)  The politician is trying to find ways to raise more money for the next election. 
B)  The politician gains prestige and voters are not well informed of the benefits and costs. 
C)  Voters do not care about the costs of programs, as long as their taxes do not go up. 
D)  The costs cannot be measured therefore the politicians focus on the benefits which are explicit.

Question 12

Recall the Application about the value of trees in residential neighborhoods to answer the following question(s).
-Recall the Application.The benefits from planting trees in residential neighborhoods,including improved air quality and aesthetics,go to ________.This implies that trees provide both private and social benefits.

Accepted Answer

A)  the property owners but not the neighbors 
B)  the neighbors but not the property owners 
C)  the property owner as well as the neighbors 
D)  neither the property owners nor the neighbors 
A)  the property owners but not the neighbors 
B)  the neighbors but not the property owners 
C)  the property owner as well as the neighbors 
D)  neither the property owners nor the neighbors

Question 13

Public-choice economics is

Accepted Answer

A)  the vote of every politician with respect to economics. 
B)  the right of every citizen to know about the economic status of his/her country. 
C)  the field that uses models of rational choice to study how governments operate. 
D)  none of the above 
A)  the vote of every politician with respect to economics. 
B)  the right of every citizen to know about the economic status of his/her country. 
C)  the field that uses models of rational choice to study how governments operate. 
D)  none of the above

Question 14

Give an example of an external benefit and explain why the outcome is inefficient.

Accepted Answer

Student responses will vary.The student'

Question 15

When do we expect special-interest groups to form?

Accepted Answer

A)  when the benefits are spread out over many and the costs are concentrated on a few citizens 
B)  when the costs of a project are spread out among all taxpayers while the benefits are concentrated among smaller segments of the population 
C)  when there is a great possibility that a vast number of citizens will become free-riders 
D)  when the choices made by the government match the preferences of the median voter 
A)  when the benefits are spread out over many and the costs are concentrated on a few citizens 
B)  when the costs of a project are spread out among all taxpayers while the benefits are concentrated among smaller segments of the population 
C)  when there is a great possibility that a vast number of citizens will become free-riders 
D)  when the choices made by the government match the preferences of the median voter

Because people can enjoy the benefits of public goods whether they pay for them or not,they are usually unwilling to pay for them.This is known as the

If education results in external benefits,the government could subsidize education to lead the market to an inefficient level of output.

Recall the Application about space debris in the atmosphere to answer the following question(s). -Recall the Application.What kind of problem does global weather observation face?

The median-voter theory suggests that different political parties will not adopt the same position as the median voter to distinguish from the competition.

Public goods and services are

Activities that provide external benefits

Which of the following would be an example of an external benefit?

The government is able to use its taxing power to provide a good that would otherwise not be provided.

In the absence of government,an underallocation of resources generally exists for

Which of the following would be typically classified as a public good?

Why might a politician start a costly spending program if its costs exceed its social benefits?

Public-choice economics is

Give an example of an external benefit and explain why the outcome is inefficient.

When do we expect special-interest groups to form?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 15: Public Goods and Public Choice

Because people can enjoy the benefits of public goods whether they pay for them or not,they are usually unwilling to pay for them.This is known as the

If education results in external benefits,the government could subsidize education to lead the market to an inefficient level of output.

Recall the Application about space debris in the atmosphere to answer the following question(s). -Recall the Application.What kind of problem does global weather observation face?

The median-voter theory suggests that different political parties will not adopt the same position as the median voter to distinguish from the competition.

Public goods and services are

Activities that provide external benefits

Which of the following would be an example of an external benefit?

The government is able to use its taxing power to provide a good that would otherwise not be provided.

In the absence of government,an underallocation of resources generally exists for

Which of the following would be typically classified as a public good?

Why might a politician start a costly spending program if its costs exceed its social benefits?

Public-choice economics is

Give an example of an external benefit and explain why the outcome is inefficient.

When do we expect special-interest groups to form?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters