Question 1

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 2

If it possible to prevent a person from enjoying the benefits of a good unless the person pays for the good, the good is

Accepted Answer

A)  rival. 
B)  excludable. 
C)  pure. 
D)  free. 
A)  rival. 
B)  excludable. 
C)  pure. 
D)  free.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

For a good to be nonrival, then

Accepted Answer

A)  one person's consumption of that good does not decrease another person's consumption of that good. 
B)  a person cannot be prevented from consuming that good even if he or she did not pay for it. 
C)  a person is willing to pay any price to ensure that the product is available. 
D)  a person is not willing to pay for the good because even without paying for it, the person can consume the good anyway. 
A)  one person's consumption of that good does not decrease another person's consumption of that good. 
B)  a person cannot be prevented from consuming that good even if he or she did not pay for it. 
C)  a person is willing to pay any price to ensure that the product is available. 
D)  a person is not willing to pay for the good because even without paying for it, the person can consume the good anyway.

Question 5

-In the above figure, to achieve efficiency the government could offer a subsidy to producers of ________ per vaccination so that consumers would pay ________ per vaccination.

Accepted Answer

A)  $20; $20 
B)  $30; $10 
C)  $20; $10 
D)  $30; $40 
A)  $20; $20 
B)  $30; $10 
C)  $20; $10 
D)  $30; $40

Question 6

Why is society's marginal social benefit curve for a public good found by vertically summing individual marginal benefit curves and not by horizontal summation as is the case for private goods?

Accepted Answer

In the case of a private good, producers

Question 7

-A city of 50,000 people is considering installing a sewage disposal system. The total fixed cost of the system is $100,000 per month. The marginal benefit to an average city resident from the first thousand gallons of capacity is 1.4 cents. The table shows the relationship between the system's capacity, its total cost, and the marginal benefit received by an average city resident:
a) Draw the marginal social cost curve of the sewage system and the residents' marginal social benefit curve. What is the capacity that achieves maximum net benefit?
b) How much will each person have to pay in taxes to support the efficient capacity level?
c) What is the political equilibrium if voters are well informed?

Accepted Answer

@#IMG-DLM& a) See the figure above. The marginal c

Question 8

A good or service or a resource is nonrival 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 9

You are studying with a friend and your friend says, "Private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?

Accepted Answer

No, private goods are excludable and riv

Question 10

-Broomfield city council is deciding how many police officers the city needs. Broomfield's population is 10,000 people. The marginal cost of a police officer is $60,000 per year. The marginal benefit schedule of an average city resident from police protection is shown in the table above. Police protection is a public good. If voters in Broomfield are rationally ignorant and the police department achieves the highest attainable budget, each resident of Broomfield will pay ________ per year in taxes.

Accepted Answer

A)  $18 
B)  $36 
C)  $4 
D)  $60 
A)  $18 
B)  $36 
C)  $4 
D)  $60

Question 11

-The principle of minimum differentiation

Accepted Answer

A)  results in political parties proposing very similar or possibly identical policies. 
B)  refers to the tendency of competitors to make themselves different in order appeal to the maximum number of clients or voters. 
C)  explains why Burger King, Wendy's, and other fast food restaurants tend to locate far away from each other. 
D)  None of the above answers are correct. 
A)  results in political parties proposing very similar or possibly identical policies. 
B)  refers to the tendency of competitors to make themselves different in order appeal to the maximum number of clients or voters. 
C)  explains why Burger King, Wendy's, and other fast food restaurants tend to locate far away from each other. 
D)  None of the above answers are correct.

Question 12

When government action leads to inefficiency, it is known as

Accepted Answer

A)  government failure. 
B)  government as usual. 
C)  lack of government trust. 
D)  politics. 
A)  government failure. 
B)  government as usual. 
C)  lack of government trust. 
D)  politics.

Question 13

Efficiency in the provision of a public good is achieved when its

Accepted Answer

A)  total social benefit equals its total social cost. 
B)  average social benefit equals its average social cost. 
C)  marginal social benefit equals its marginal social cost. 
D)  marginal social benefit equals zero. 
A)  total social benefit equals its total social cost. 
B)  average social benefit equals its average social cost. 
C)  marginal social benefit equals its marginal social cost. 
D)  marginal social benefit equals zero.

Question 14

The concept of rational ignorance can explain why the government might provide more than the efficient quantity of a public good.

Accepted Answer

A) True 
 B)False

Question 15

-Broomfield city council is deciding how many police officers the city needs. Broomfield's population is 10,000 people. The marginal cost of a police officer is $60,000 per year. The marginal benefit schedule of an average city resident from police protection is shown in the table above. Police protection is a public good. To support the efficient number of police officers, each resident of Broomfield will have to pay ________ per year in taxes.

Accepted Answer

A)  $36 
B)  $6.40 
C)  $18 
D)  $60 
A)  $36 
B)  $6.40 
C)  $18 
D)  $60

Question 16

In the United States, the smallest source of expenditure on healthcare is

Accepted Answer

A)  government expenditure. 
B)  private insurance expenditure. 
C)  out-of-pocket expenditure. 
D)  unknown. 
A)  government expenditure. 
B)  private insurance expenditure. 
C)  out-of-pocket expenditure. 
D)  unknown.

Question 17

The quantity of a public good supplied by a private market is

Accepted Answer

A)  smaller than the efficient quantity. 
B)  equal to the efficient quantity. 
C)  larger than the efficient quantity. 
D)  the quantity that maximizes total public benefit. 
A)  smaller than the efficient quantity. 
B)  equal to the efficient quantity. 
C)  larger than the efficient quantity. 
D)  the quantity that maximizes total public benefit.

Question 18

The economy's marginal social benefit curve for a public good is calculated by adding the

Accepted Answer

A)  marginal cost of all the suppliers at each quantity. 
B)  quantities supplied by all the suppliers at each price. 
C)  quantities demanded by all the individuals at each price. 
D)  marginal benefits of all the individuals at each quantity. 
A)  marginal cost of all the suppliers at each quantity. 
B)  quantities supplied by all the suppliers at each price. 
C)  quantities demanded by all the individuals at each price. 
D)  marginal benefits of all the individuals at each quantity.

Question 19

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 20

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.

A good or service or a resource is excludable if

If it possible to prevent a person from enjoying the benefits of a good unless the person pays for the good, the good is

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

For a good to be nonrival, then

-In the above figure, to achieve efficiency the government could offer a subsidy to producers of per vaccination so that consumers would pay per vaccination.

Why is society's marginal social benefit curve for a public good found by vertically summing individual marginal benefit curves and not by horizontal summation as is the case for private goods?

A good or service or a resource is nonrival if

You are studying with a friend and your friend says, "Private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?

-The principle of minimum differentiation

When government action leads to inefficiency, it is known as

Efficiency in the provision of a public good is achieved when its

The concept of rational ignorance can explain why the government might provide more than the efficient quantity of a public good.

In the United States, the smallest source of expenditure on healthcare is

The quantity of a public good supplied by a private market is

The economy's marginal social benefit curve for a public good is calculated by adding the

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

A free rider is someone who

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

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

A good or service or a resource is excludable if

If it possible to prevent a person from enjoying the benefits of a good unless the person pays for the good, the good is

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

For a good to be nonrival, then

-In the above figure, to achieve efficiency the government could offer a subsidy to producers of ________ per vaccination so that consumers would pay ________ per vaccination.

Why is society's marginal social benefit curve for a public good found by vertically summing individual marginal benefit curves and not by horizontal summation as is the case for private goods?

A good or service or a resource is nonrival if

You are studying with a friend and your friend says, "Private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?

-The principle of minimum differentiation

When government action leads to inefficiency, it is known as

Efficiency in the provision of a public good is achieved when its

The concept of rational ignorance can explain why the government might provide more than the efficient quantity of a public good.

In the United States, the smallest source of expenditure on healthcare is

The quantity of a public good supplied by a private market is

The economy's marginal social benefit curve for a public good is calculated by adding the

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

A free rider is someone who

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-In the above figure, to achieve efficiency the government could offer a subsidy to producers of per vaccination so that consumers would pay per vaccination.