MRU19.3: CLUB GOODS
Why doesn't Google make its search technology excludable by requiring a login and charging a subscription fee? - Because it does not have enough market power yet to justify this move. - Because it makes more profit by providing search technology as a public good and selling advertising. - Because the technology to require a login for Google search services does not yet exist. - Because no one would pay money for Google's search services.
A: Because it makes more profit by providing search technology as a public good and selling advertising.
Which of the following is NOT mentioned in the video as an example of a club good? - Wi-Fi - Satellite radio - Jeans - HBO
A: Jeans
Private markets: - provide club goods just as efficiently as they provide private goods. - tend to overproduce club goods. - can never provide club goods. - can provide club goods but with some inefficiency.
A: can provide club goods but with some inefficiency.
Club goods are: - excludable, because non-payers can be prevented from consuming the good. - rival, because if more users consume the good, the cost will increase. - nonexcludable, because non-payers can be prevented from consuming the good. - nonrival, because if more users consume the good, the cost will increase.
A: excludable, because non-payers can be prevented from consuming the good.
Wi-Fi is an interesting club good because it is provided: - exclusively for free by local governments. - exclusively for a fee. - in many different ways. - exclusively for free by businesses to attract customers.
A: in many different ways.
According to Professor Tabarrok, the loss of efficiency that occurs when markets produce club goods: - is probably outweighed by the creativity that private provision inspires. - justifies the government provision of club goods. - is a serious inefficiency that should be corrected through government intervention. - is equal to the loss of efficiency that occurs when markets produce private goods.
A: is probably outweighed by the creativity that private provision inspires.
Club goods are: - excludable, because non-payers can be prevented from consuming the good. - rival, because if more users consume the good, the cost will increase. - nonexcludable, because non-payers can be prevented from consuming the good. - nonrival, because if more users consume the good, the cost will increase.
A: nonrival, because if more users consume the good, the cost will increase.
Turning _______ into club goods can help to solve the problems associated with the provision of those goods. - public goods - common resources - private goods - capital goods
A: public goods
With club goods: - some trades for which cost exceeds value sometimes occur. - some trades do not occur even though value exceeds cost. - no potential trades have value that exceeds cost. - all trades for which value exceeds cost will occur.
A: some trades do not occur even though value exceeds cost.
Broadcast television is a public good: - that is provided by the government. - that is produced by private markets, thanks to advertising. - that is both excludable and rival. - that is produced by private markets, albeit at a financial loss.
A: that is produced by private markets, thanks to advertising.