Question 1

In an unregulated market for healthcare, the equilibrium quantity is that at which ________ and the efficient quantity is that at which ________.

Accepted Answer

A)  D = S; MB = MSC 
B)  D = S; MSB = MSC 
C)  D = MSC; MB = MSC 
D)  MSB = S; MB = S 
A)  D = S; MB = MSC 
B)  D = S; MSB = MSC 
C)  D = MSC; MB = MSC 
D)  MSB = S; MB = S

Question 2

The free-rider problem with a public good leads to

Accepted Answer

A)  inefficiency if the good is provided by only private markets with no government action. 
B)  overproduction if the good is provided by private markets. 
C)  underproduction if the good is provided by the government. 
D)  None of the above answers is correct. 
A)  inefficiency if the good is provided by only private markets with no government action. 
B)  overproduction if the good is provided by private markets. 
C)  underproduction if the good is provided by the government. 
D)  None of the above answers is correct.

Question 3

Natural monopolies are ________ and ________.

Accepted Answer

A)  rival; excludable 
B)  nonrival; excludable 
C)  rival; nonexcludable 
D)  nonrival; nonexcludable 
A)  rival; excludable 
B)  nonrival; excludable 
C)  rival; nonexcludable 
D)  nonrival; nonexcludable

Question 4

The table above shows the marginal benefit that arises from providing police protection in an economy of two people, Paul and Art. Police protection is a public good.
a) Construct a table of the economy's marginal social benefit from providing police protection.
b) What is the economy's marginal social benefit from having 3 police cars on duty?

Accepted Answer

@#IMG-DLM& a) The table showing the economy's marg

Question 5

Protection of rivers in Idaho is a public good. If the marginal social cost of protecting rivers in Idaho exceeds the marginal social benefit of river protection, is there more than, less than, or the efficient amount of river protection taking place?

Accepted Answer

If the marginal social cost exceeds the

Question 6

Free riding

Accepted Answer

A)  is possible if the consumption of a good is characterized by excludability. 
B)  is possible if the consumption of a good is characterized by nonexcludability. 
C)  is characteristic of private goods. 
D)  occurs when consumers pay too much for services provided by government. 
A)  is possible if the consumption of a good is characterized by excludability. 
B)  is possible if the consumption of a good is characterized by nonexcludability. 
C)  is characteristic of private goods. 
D)  occurs when consumers pay too much for services provided by government.

Question 7

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

Accepted Answer

The statement is False. For bo

Question 8

-The graph shows costs and benefits of a mosquito control program, which is a public good:
a) What is the quantity of spraying that achieves efficiency?
b) What is the political equilibrium if voters are well informed?

Accepted Answer

a) Efficiency is reached at the quantity

Question 9

Which of the following is TRUE about public goods?

Accepted Answer

A)  Consumption is rival and nonexcludable. 
B)  Consumption is nonrival and excludable. 
C)  Efficient provision occurs at the level of output at which total benefit is equal to total cost. 
D)  Unregulated private markets produce less than the efficient quantity of a public good. 
A)  Consumption is rival and nonexcludable. 
B)  Consumption is nonrival and excludable. 
C)  Efficient provision occurs at the level of output at which total benefit is equal to total cost. 
D)  Unregulated private markets produce less than the efficient quantity of a public good.

Question 10

If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it ________.

Accepted Answer

A)  decreases the capacity of the sewage system 
B)  does not change the capacity of the sewage system 
C)  increases the capacity of the sewage system 
D)  increases the sewerage charge that the residents pay 
A)  decreases the capacity of the sewage system 
B)  does not change the capacity of the sewage system 
C)  increases the capacity of the sewage system 
D)  increases the sewerage charge that the residents pay

Question 11

Free riding is not a problem in the market for a private good because

Accepted Answer

A)  people who do not pay for the good can be excluded from consumption. 
B)  the good is a rival good. 
C)  the market eliminates the problem of externalities. 
D)  The question errs because free riding is a problem in providing private goods. 
A)  people who do not pay for the good can be excluded from consumption. 
B)  the good is a rival good. 
C)  the market eliminates the problem of externalities. 
D)  The question errs because free riding is a problem in providing private goods.

Question 12

An example of a natural monopoly is

Accepted Answer

A)  a house. 
B)  the Internet. 
C)  air traffic control. 
D)  fish in the ocean. 
A)  a house. 
B)  the Internet. 
C)  air traffic control. 
D)  fish in the ocean.

Question 13

Public goods create a free-rider problem because the quantity of the good that a person consumes ________ for that good.

Accepted Answer

A)  does not depend on the amount that the person pays 
B)  increases as that person pays less 
C)  increases as that person pays more 
D)  decreases as that person pays more 
A)  does not depend on the amount that the person pays 
B)  increases as that person pays less 
C)  increases as that person pays more 
D)  decreases as that person pays more

Question 14

Which of the following is a necessary characteristic of a public good? The good is

Accepted Answer

A)  excludable. 
B)  nonrival. 
C)  nonexcludable. 
D)  Both answers B and C are correct. 
A)  excludable. 
B)  nonrival. 
C)  nonexcludable. 
D)  Both answers B and C are correct.

Question 15

-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, to achieve an efficient quantity of vaccinations, the government could provide a subsidy of

Accepted Answer

A)  $4 per vaccination. 
B)  $3 per vaccination. 
C)  $2 per vaccination 
D)  $1 per vaccination. 
A)  $4 per vaccination. 
B)  $3 per vaccination. 
C)  $2 per vaccination 
D)  $1 per vaccination.

Question 16

The marginal social benefit curve from a public good is found by horizontally summing the marginal benefit curves of all individuals.

Accepted Answer

A) True 
 B)False

Question 17

-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 $36, the efficient quantity of satellites is

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  4. 
A)  1. 
B)  2. 
C)  3. 
D)  4.

Question 18

Private markets will not provide the efficient quantity of a public good because

Accepted Answer

A)  of the principle of minimum differentiation. 
B)  public goods are rival and excludable. 
C)  of rational ignorance. 
D)  of the free-rider problem. 
A)  of the principle of minimum differentiation. 
B)  public goods are rival and excludable. 
C)  of rational ignorance. 
D)  of the free-rider problem.

Question 19

-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 well informed and know what is best for them, the political equilibrium is that ________ police officers will be hired.

Accepted Answer

A)  2 
B)  4 
C)  6 
D)  3 
A)  2 
B)  4 
C)  6 
D)  3

Question 20

Food is an example of a ________ good.

Accepted Answer

A)  nonrival and nonexcludable 
B)  rival and excludable 
C)  nonrival and excludable 
D)  rival and nonexcludable 
A)  nonrival and nonexcludable 
B)  rival and excludable 
C)  nonrival and excludable 
D)  rival and nonexcludable

In an unregulated market for healthcare, the equilibrium quantity is that at which and the efficient quantity is that at which .

The free-rider problem with a public good leads to

Natural monopolies are and .

Protection of rivers in Idaho is a public good. If the marginal social cost of protecting rivers in Idaho exceeds the marginal social benefit of river protection, is there more than, less than, or the efficient amount of river protection taking place?

Free riding

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

-The graph shows costs and benefits of a mosquito control program, which is a public good: a) What is the quantity of spraying that achieves efficiency? b) What is the political equilibrium if voters are well informed?

Which of the following is TRUE about public goods?

If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it ________.

Free riding is not a problem in the market for a private good because

An example of a natural monopoly is

Public goods create a free-rider problem because the quantity of the good that a person consumes ________ for that good.

Which of the following is a necessary characteristic of a public good? The good is

The marginal social benefit curve from a public good is found by horizontally summing the marginal benefit curves of all individuals.

-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 $36, the efficient quantity of satellites is

Private markets will not provide the efficient quantity of a public good because

Food is an example of a ________ good.

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

In an unregulated market for healthcare, the equilibrium quantity is that at which ________ and the efficient quantity is that at which ________.

The free-rider problem with a public good leads to

Natural monopolies are ________ and ________.

Protection of rivers in Idaho is a public good. If the marginal social cost of protecting rivers in Idaho exceeds the marginal social benefit of river protection, is there more than, less than, or the efficient amount of river protection taking place?

Free riding

"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?

-The graph shows costs and benefits of a mosquito control program, which is a public good: a) What is the quantity of spraying that achieves efficiency? b) What is the political equilibrium if voters are well informed?

Which of the following is TRUE about public goods?

If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it ________.

Free riding is not a problem in the market for a private good because

An example of a natural monopoly is

Public goods create a free-rider problem because the quantity of the good that a person consumes ________ for that good.

Which of the following is a necessary characteristic of a public good? The good is

The marginal social benefit curve from a public good is found by horizontally summing the marginal benefit curves of all individuals.

-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 $36, the efficient quantity of satellites is

Private markets will not provide the efficient quantity of a public good because

Food is an example of a ________ good.

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 an unregulated market for healthcare, the equilibrium quantity is that at which and the efficient quantity is that at which .

Natural monopolies are and .