Question 1

A public good is ________ and ________.

Accepted Answer

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

Question 2

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.

Question 3

Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. The marginal social benefit of the barrier is equal to the

Accepted Answer

A)  marginal private benefit of the person who benefits the most from the barrier. 
B)  marginal private benefit of the person who benefits the least from the barrier. 
C)  sum of the marginal private benefits for anyone who benefits from the barrier. 
D)  difference between the marginal private benefit of the person who benefits the most and the person who benefits the least from the barrier.

Question 4

Which of the following is the BEST example of a common resource?

Accepted Answer

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

Question 5

Katie Bobby
 
-The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $175 a piece to produce, what is the efficient quantity of submarines?

Accepted Answer

A)  0 
B)  1 
C)  2 
D)  3

Question 6

The principle of minimum differentiation suggests that competitors

Accepted Answer

A)  try to distinguish themselves by offering highly different products. 
B)  try to gain the largest market share by differentiating a popular product. 
C)  tend to make identical goods in order to appeal to the largest number of consumers. 
D)  try to decrease costs by minimizing the differences in the types of resources used.

Question 7

-In the above figure, the competitive unregulated equilibrium is producing and consuming ________ vaccinations per year at a price of ________.

Accepted Answer

A)  30 thousand; $40 
B)  30 thousand; $30 
C)  30 thousand; $20 
D)  50 thousand; $30

Question 8

Two candidates are running for election as mayors of New York City that was recently impacted by Superstorm Sandy. In their election platforms, both candidates supported spending very similar amounts on hurricane protection. This similarity is most likely the result of

Accepted Answer

A)  both candidates necessarily having the same preferences towards risk and protection. 
B)  the Principle of Minimum Differentiation. 
C)  both the candidates realize that hurricane protection is a public good. 
D)  politicians only take efficiency into account and hence all candidates will suggest the efficient outcome.

Question 9

Because Jess didn't have the time to understand the issue, she did not vote on the amendment about clean energy. Jess's behavior demonstrates the economic principle of

Accepted Answer

A)  diminishing marginal utility. 
B)  voting preferences. 
C)  rational ignorance. 
D)  minimum differentiation.

Question 10

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.

Question 11

Governments exist to

Accepted Answer

A)  maintain property rights. 
B)  provide non-market mechanisms for allocating scarce resources. 
C)  implement arrangements that redistribute wealth and income. 
D)  all of the above.

Question 12

-If the good in the table above is a public good and Pat and Al are the only members of society, then the efficient quantity to produce is

Accepted Answer

A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units.

Question 13

When consumption of a good is nonrival and nonexcludable, the good is a

Accepted Answer

A)  public good. 
B)  private good. 
C)  mixed good. 
D)  service.

Question 14

A good or service or a resource is rival 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.

Question 15

Rational ignorance suggests that voters will

Accepted Answer

A)  be ignorant about all issues. 
B)  be ignorant about issues that are of no special interest to them. 
C)  pursue information on all issues before voting. 
D)  avoid voting if they have no information.

Question 16

When describing goods and services, what is meant by the terms "rival" and "nonrival?" Are private goods rival or nonrival? Are public goods rival or nonrival? Are common resources rival or nonrival?

Accepted Answer

The answer of When describing goods and services, what is...

Question 17

Government failure, when government actions lead to inefficiency, can result in

Accepted Answer

A)  overprovision. 
B)  underprovision. 
C)  both A and B. 
D)  neither A nor B.

Question 18

-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 $54, the quantity of satellites provided by a competitive market is

Accepted Answer

A)  0. 
B)  1. 
C)  2. 
D)  3.

Question 19

Which of the following is the BEST example of a common resource?

Accepted Answer

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

Question 20

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

Accepted Answer

The answer of Why is it rational for individuals to...

Exam 16: Public Choices, Public Goods, and Healthcare

A public good is and .

For a good to be nonrival, then

Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. The marginal social benefit of the barrier is equal to the

Which of the following is the BEST example of a common resource?

Katie Bobby -The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $175 a piece to produce, what is the efficient quantity of submarines?

The principle of minimum differentiation suggests that competitors

-In the above figure, the competitive unregulated equilibrium is producing and consuming vaccinations per year at a price of .

Two candidates are running for election as mayors of New York City that was recently impacted by Superstorm Sandy. In their election platforms, both candidates supported spending very similar amounts on hurricane protection. This similarity is most likely the result of

Because Jess didn't have the time to understand the issue, she did not vote on the amendment about clean energy. Jess's behavior demonstrates the economic principle of

Bureaucratic overprovision of a public good could occur because

Governments exist to

-If the good in the table above is a public good and Pat and Al are the only members of society, then the efficient quantity to produce is

When consumption of a good is nonrival and nonexcludable, the good is a

A good or service or a resource is rival if

Rational ignorance suggests that voters will

When describing goods and services, what is meant by the terms "rival" and "nonrival?" Are private goods rival or nonrival? Are public goods rival or nonrival? Are common resources rival or nonrival?

Government failure, when government actions lead to inefficiency, can result in

-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 $54, the quantity of satellites provided by a competitive market is

Which of the following is the BEST example of a common resource?

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