Exam 5: Public Spending and Public Choice

If a nation's government determines that consumption of cigarettes should be discouraged, then this means that the government has judged cigarettes to be a(n)

Markets tend to underallocate resources to the production of a good when

A payment that is made by the government for which no goods or services are given in return is known as

All of the following are assumptions of both market and public-sector decision making EXCEPT:

Which of the following statements is true about the difference between a public and private good?

All of the following are major sources for financing public education EXCEPT

The largest spending category for state governments is

Which of the following is heavily subsidized by state and local governments?

The economic problem with Medicare financing is that

The free-rider problem plagues public goods because

Which of the following is an example of a positive externality?

The legal system in the United States tends

In graphical form,the effect of imposing a tax on a good is shown as

What type of policy does the government adopt in dealing with government-inhibited goods?

-Refer to the above figure. The market equilibrium quantity is . Point represents the optimal amount of production. This indicates that there is

What is the consequence of a positive externality in a market? What is the consequence of a negative externality? Why those consequences occur?

The economic functions of government include

According to your text, one reason for flat or falling achievement scores even in the face of substantially higher education subsidies may be that

Medicare and Social Security are examples of

Explain what market failure is. How does market failure relate to the price system? How does market failure relate to the role of government?