Exam 14: Public Goods and Tax Policy

A good or service that is both rival and excludable is a:

There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year. The marginal benefit of adding a third army base equals the local marginal benefit of $2 million plus the marginal benefit to Katlandia of ________.

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority.   Resident Reservatim Price Incame Kris \ 100 \ 1,000 Taylor \ 200 \ 5,000 Max \ 700 \ 6,000   Installing the public good would ________ total economic surplus by ________.

The government should only provide a pure public good if ________ and ________.

If the government needs to raise revenue to pay for a public good, the ideal tax structure would tax

Your state department of transportation is considering installing toll booths with gates on a quiet section of highway. If this is done, a good that is currently a:

There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year. Suppose the department of defense proposes to build a third base in the state of New Porkswick. The state representative from New Porkswick will ________ this proposal because ________.

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ________ for the 24ᵗʰ shell, and the marginal cost of the 24ᵗʰ shell is ________.

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. What is the vertical intercept of the village's demand curve for fireworks?

Which of the following statements about the provision of public goods is true?

A collective good is one that, to at least some degree, is:

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C. If the good shown on the graphs is a public good, and the marginal cost of providing each unit is constant and equal to $5, then what is the optimal quantity of the public good?

When private firms reduce investment because of the increase in interest rates brought about by government borrowing it is termed:

An Internet site that maintains a database of product reviews that anyone can access and that has advertisement banners is:

The table below shows the marginal benefit and marginal cost of purchasing an additional unit of 3 different public goods. Mar ginal benefit Marginal cost Total spending an the public Public pood 1 \ 20 \ 20 \ 1,500 Public pood 2 \ 15 \ 25 \ 800 Public pood 3 \ 10 \ 5 \ 700   The government is spending more than is socially optimal on:

A patch of edible mushrooms growing wild in a national forest is a ________ good.

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority.   Resident Reservatim Price Incame Kris \ 100 \ 1,000 Taylor \ 200 \ 5,000 Max \ 700 \ 6,000   Suppose that the government knows each resident's reservation price. To collect no more than $900 in tax revenue, each resident should be charged ________ percent of their ________. 

A crowded beach without an entrance fee is a ________ good.

If a tax imposed in a market generates deadweight in that market, then the tax:

When a negative externality is present in a market, the government should: