Exam 16: Public Choices, Public Goods, and Healthcare

-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?

Why is it rational for individuals to be ignorant about public goods but not about private goods?

If a public good was left to be provided by the private sector

Which of the following is likely to be nonexcludable but rival?

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $95, the efficient quantity of satellites is

An example of a public good is

Katie Bobby -The above table shows the marginal benefit from submarines for the only two citizens of a country. Suppose submarines cost $175 a piece. Politician A proposes 2 submarines while politician B proposes 4. Assuming that both Bobby and Katie pay one half of the resulting taxes and neither is rationally ignorant, which politician will win the election?

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

A free rider problem is a problem associated with

In a single payer model of healthcare, the government pays for all healthcare. Because patients access healthcare at a zero or low cost, the quantity of healthcare services demanded exceeds the quantity provided.

A free rider is a person who consumes a good without paying for it.

-The above figure shows the marginal benefit and marginal cost curves for a public good. The quantity that has the best prospect of winning in an election by well-informed voters is

An example of a public good is national defense services.

Nonexcludability is a feature of

-The figure above shows the market for polio vaccination in Africa. a) If the market is competitive and left unregulated, how many doses of vaccine will be administered? b) If the Melinda and Bill Gates Foundation underwrites the cost of the vaccine by paying for a large fraction of the preparation and delivery cost, what will happen to the number of doses administered? Why?

Because of the free-rider problem, ________.

-Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the fourth satellite?

The efficient quantity of a public good is the quantity that has the highest possible marginal social benefit.

-The table above gives information on the marginal perceived private benefit and marginal social benefit associated with vaccination against varicella (chicken pox). If the marginal cost of a varicella vaccination is $10, then the unregulated competitive equilibrium will have

In the political marketplace, voters do all of the following EXCEPT