Question 1

How does the principle of minimum differentiation relate to the free-rider problem?

Accepted Answer

The free-rider problem requires that the

Question 2

Why isn't national defense provided by free markets?

Accepted Answer

National defense is a public good. This

Question 3

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

Accepted Answer

A)  all the individuals can consume the same unit of the good. 
B)  more than one supplier can provide the good. 
C)  the same unit of the good cannot be simultaneously shared by more than one person at a time. 
D)  the government can supply a public good at a lower cost than can a private supplier. 
A)  all the individuals can consume the same unit of the good. 
B)  more than one supplier can provide the good. 
C)  the same unit of the good cannot be simultaneously shared by more than one person at a time. 
D)  the government can supply a public good at a lower cost than can a private supplier.

Question 4

Nonrivalry is a feature of

Accepted Answer

A)  goods but not services. 
B)  all nonexcludable goods. 
C)  excludable goods. 
D)  public goods. 
A)  goods but not services. 
B)  all nonexcludable goods. 
C)  excludable goods. 
D)  public goods.

Question 5

There are four lighthouses on the island of Sand. If this is the efficient quantity of lighthouses, ________.

Accepted Answer

A)  the marginal social benefit of the fourth lighthouse equals its marginal social cost 
B)  total social benefit is zero 
C)  marginal social benefit minus marginal social cost is a maximum 
D)  Both answers A and C are correct. 
A)  the marginal social benefit of the fourth lighthouse equals its marginal social cost 
B)  total social benefit is zero 
C)  marginal social benefit minus marginal social cost is a maximum 
D)  Both answers A and C are correct.

Question 6

-Suppose two individuals, Pooh and Piglet, desire protection (provided by Tigger) for their community, The Hundred Acre Wood, from heffalumps. Protection is a public good. The marginal cost of protection as well as Piglet's and Pooh's marginal benefits from protection are in the table above. What is the quantity of protection that achieves the maximum net benefit?

Accepted Answer

A)  1 hour per day 
B)  2 hours per day 
C)  3 hours per day 
D)  4 hours per day 
A)  1 hour per day 
B)  2 hours per day 
C)  3 hours per day 
D)  4 hours per day

Question 7

A free rider problem is created by private goods.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the BEST example of a private good?

Accepted Answer

A)  a can of Mountain Dew 
B)  fish in the ocean 
C)  cable television 
D)  national defense 
A)  a can of Mountain Dew 
B)  fish in the ocean 
C)  cable television 
D)  national defense

Question 9

The free-rider problem is the absence of an incentive for

Accepted Answer

A)  firms to produce public goods. 
B)  people to use common resources. 
C)  people to pay for what they consume. 
D)  people to vote. 
A)  firms to produce public goods. 
B)  people to use common resources. 
C)  people to pay for what they consume. 
D)  people to vote.

Question 10

An uncrowded toll road is ________ because it is ________.

Accepted Answer

A)  a public good; both nonrival and nonexcludable 
B)  not a public good; nonrival but excludable 
C)  not a public good; nonexcludable but rival 
D)  not a public good; both rival and excludable 
A)  a public good; both nonrival and nonexcludable 
B)  not a public good; nonrival but excludable 
C)  not a public good; nonexcludable but rival 
D)  not a public good; both rival and excludable

Question 11

Bureaucratic overprovision of a public good could occur because

Accepted Answer

A)  of a failure of minimum differentiation. 
B)  of rational ignorance among voters. 
C)  voters want more of the good than do bureaucrats. 
D)  bureaucrats attempt to maximize efficiency. 
A)  of a failure of minimum differentiation. 
B)  of rational ignorance among voters. 
C)  voters want more of the good than do bureaucrats. 
D)  bureaucrats attempt to maximize efficiency.

Question 12

The economy's marginal social benefit curve for a public good is obtained by

Accepted Answer

A)  horizontally summing each individual's demand curve. 
B)  horizontally summing each individual's marginal benefit curve. 
C)  vertically summing each individual's marginal benefit curve. 
D)  averaging each individual's marginal benefit curve. 
A)  horizontally summing each individual's demand curve. 
B)  horizontally summing each individual's marginal benefit curve. 
C)  vertically summing each individual's marginal benefit curve. 
D)  averaging each individual's marginal benefit curve.

Question 13

A free-rider problem exists if

Accepted Answer

A)  those consuming the good pay more than the cost of providing the good so that the producer's profits increase ("free ride") as a result of the overpayment. 
B)  those consuming the good pay nothing for it. 
C)  two consumers can jointly consume a good, which lowers the price per person. 
D)  a firm can obtain technology at a fair price. 
A)  those consuming the good pay more than the cost of providing the good so that the producer's profits increase ("free ride") as a result of the overpayment. 
B)  those consuming the good pay nothing for it. 
C)  two consumers can jointly consume a good, which lowers the price per person. 
D)  a firm can obtain technology at a fair price.

Question 14

A museum is NOT a public good if

Accepted Answer

A)  there can be no congestion. 
B)  the museum receives donations from members of the public. 
C)  an entry fee is charged and people are denied entry if they do not pay. 
D)  the general public typically does not go to the museum. 
A)  there can be no congestion. 
B)  the museum receives donations from members of the public. 
C)  an entry fee is charged and people are denied entry if they do not pay. 
D)  the general public typically does not go to the museum.

Question 15

Which of the following is the BEST example of a public good?

Accepted Answer

A)  a can of Mountain Dew 
B)  fish in the ocean 
C)  cable television 
D)  national defense 
A)  a can of Mountain Dew 
B)  fish in the ocean 
C)  cable television 
D)  national defense

Question 16

For health care, the perceived marginal benefit ________ the marginal social benefit.

Accepted Answer

A)  is less than 
B)  is greater than 
C)  is equal to 
D)  cannot be compared to 
A)  is less than 
B)  is greater than 
C)  is equal to 
D)  cannot be compared to

Question 17

If it is impossible or very costly to prevent someone from benefiting from a good even if the person does not pay for it, the good is

Accepted Answer

A)  nonrival. 
B)  nonexcludable. 
C)  pure. 
D)  rival. 
A)  nonrival. 
B)  nonexcludable. 
C)  pure. 
D)  rival.

Question 18

If a voter is ignorant of some of the issues that affect public policy, then the voter is definitely behaving irrationally.

Accepted Answer

A) True 
 B)False

Question 19

A public choice is

Accepted Answer

A)  a decision that affects one person. 
B)  a decision that affects no one. 
C)  a decision made in public. 
D)  a decision that affects an entire society. 
A)  a decision that affects one person. 
B)  a decision that affects no one. 
C)  a decision made in public. 
D)  a decision that affects an entire society.

Question 20

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week. How would Michigan public radio best be classified?

Accepted Answer

A)  as a private good 
B)  as a common resource 
C)  as a natural monopoly 
D)  as a public good 
A)  as a private good 
B)  as a common resource 
C)  as a natural monopoly 
D)  as a public good

How does the principle of minimum differentiation relate to the free-rider problem?

Why isn't national defense provided by free markets?

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

Nonrivalry is a feature of

There are four lighthouses on the island of Sand. If this is the efficient quantity of lighthouses, ________.

A free rider problem is created by private goods.

Which of the following is the BEST example of a private good?

The free-rider problem is the absence of an incentive for

An uncrowded toll road is because it is .

Bureaucratic overprovision of a public good could occur because

The economy's marginal social benefit curve for a public good is obtained by

A free-rider problem exists if

A museum is NOT a public good if

Which of the following is the BEST example of a public good?

For health care, the perceived marginal benefit ________ the marginal social benefit.

If it is impossible or very costly to prevent someone from benefiting from a good even if the person does not pay for it, the good is

If a voter is ignorant of some of the issues that affect public policy, then the voter is definitely behaving irrationally.

A public choice is

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week. How would Michigan public radio best be classified?

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

How does the principle of minimum differentiation relate to the free-rider problem?

Why isn't national defense provided by free markets?

The construction of the economy's marginal social benefit curve for a public good reflects the fact that

Nonrivalry is a feature of

There are four lighthouses on the island of Sand. If this is the efficient quantity of lighthouses, ________.

A free rider problem is created by private goods.

Which of the following is the BEST example of a private good?

The free-rider problem is the absence of an incentive for

An uncrowded toll road is ________ because it is ________.

Bureaucratic overprovision of a public good could occur because

The economy's marginal social benefit curve for a public good is obtained by

A free-rider problem exists if

A museum is NOT a public good if

Which of the following is the BEST example of a public good?

For health care, the perceived marginal benefit ________ the marginal social benefit.

If it is impossible or very costly to prevent someone from benefiting from a good even if the person does not pay for it, the good is

If a voter is ignorant of some of the issues that affect public policy, then the voter is definitely behaving irrationally.

A public choice is

Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week. How would Michigan public radio best be classified?

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

An uncrowded toll road is because it is .