ECON 15

15) Offering contributors private goods such as coffee mugs, books, or magazine subscriptions will ________ the free-rider problem and lead to a ________ level of contribution to the public good. A) reduce; smaller B) reduce; larger C) increase; smaller D) increase; larger

b

7) An example of a good that is non-rival in consumption is: A) a music CD. B) a radio broadcast of a song. C) a ticket to a concert. D) a guitar.

b

12) The free-rider problem implies that: A) each person will pay the full cost of the public good. B) nobody wants the public good. C) everybody will pay a portion of the cost of the public good. D) each person will try to benefit from the public good without paying for it.

D

2) A government can promote efficiency by intervening in a market in which there are: A) no spillovers. B) spillover costs. C) spillover benefits. D) either spillover costs or spillover benefits.

D

23) The self-interest model of government: A) suggests that government officials are selfish. B) explains why there are limits on government taxation and spending. C) shows how the theory of rent-seeking applies to governments. D) All of the above are correct.

D

1) A market in which there are neither spillover benefits nor spillover costs is: A) efficient. B) inefficient. C) efficient but not equitable. D) impossible.

A

22) Table 16.1 shows the preferred budget in millions for a new sports facility and the number of thousands of voters in a community who prefer that budget. Tom proposed a budget of $7 million while Mary proposed a budget of $2 million. Which of the two candidates will be elected if everyone votes? A) Tom B) Mary C) It will be a tie. D) The outcome of the election cannot be predicted.

A

4) A private good is a good that: A) is consumed by a single person or household. B) cannot be used by private citizens. C) can not result in external benefits or costs to those who don't consume. D) is available for everyone to consume, regardless of who pays.

A

6) A good that is consumed by a single person or household is called a(n): A) private good. B) external good. C) public good. D) spillover good.

A

20) What is the best explanation for the fact that the only two political candidates in an election often have very similar stands on the issues during an election? A) They are logrolling. B) They are behaving according to the median voter rule. C) Democrats and Republicans actually agree on most issues. D) They need to please special interest groups in order to be elected.

B

21) Table 16.1 shows the preferred budget in millions for a new sports facility and the number of thousands of voters in a community who prefer that budget. Tom proposed a budget of $6 million while Mary proposed a budget of $3 million. This suggests that Tom will get ________ thousand votes while Mary gets ________ thousand votes. A) 32; 11B) 22; 21C) 15; 28D) 12; 31

B

8) An example of a good that is rival in consumption is: A) a radio program. B) a copy of an economic textbook C) an economics web page. D) a poster of famous economists

B

3) A public good is a good that: A) is consumed by a single person or household. B) cannot be used by private citizens. C) is available for everyone to consume, regardless of who pays. D) is provided by the government.

C

5) A good that is available for everyone to consume, regardless of who pays and who doesn't, is called a: A) private good. B) external good. C) public good. D) spillover good.

C

11) A spillover benefit is the benefit experienced by people who: A) do not decide how much of the good to produce or consume. B) did not know why they are experiencing the benefit. C) decide how much of the good to produce or consume. D) consume the good.

a

13) When people try to benefit from a public good without paying for it we call it the: A) free-rider problem. B) duopolists' dilemma. C) public goods problem. D) taxation problem.

a

14) The free-rider problem occurs for: A) private goods and public goods. B) private goods but not public goods. C) public goods but not private goods. D) neither public nor private goods.

c

17) The diversion of asteroids is a public good because: A) no individual has enough money to develop the technology to divert asteroids on his or her own. B) individuals would not contribute money to divert asteroids. C) everyone on earth would benefit from asteroid diversion whether they contribute or not. D) none of the above; asteroid diversion is not a public good

c

18) Public choice economics studies: A) what individuals choose for themselves. B) how individuals are affected by advertising. C) how governments operate. D) the voter theory.

c

9) An example of a good that is excludable is: A) a park. B) a river. C) a boat. D) clean air.

c

10) An example of a good that is excludable is: A) broadcast television. B) an outdoor sculpture visible from the street. C) an aerial fireworks display. D) a television set.

d

16) Arranging matching charitable contributions will ________ the free-rider problem and lead to a ________ level of contribution to the public good. A) increase; smaller B) increase; larger C) reduce; smaller D) reduce; larger

d

19) The median voter rule says that: A) people "vote with their feet." B) the median voter will not bother to vote in the election, it is extremists who vote. C) the median voter never gets what he or she wants in an election. D) government decisions will reflect the preferences of the median voter.

d