chpters 10/11

Goods that are not excludable include both

common resources and public goods

Goods that are rival in consumption but not excludable would be considered

common resources

When goods do not have a price, which of the following primarily ensures that the good is produced?

government

Under which of the following scenarios would a park be considered a club good?

Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables

A city street is

a common resource when it is congested, but it is a public good when it is not congested

The impact of one person's actions on the well-being of a bystander is called

an externality

Which of the following would not be considered a private good?

cable TV service

A cost imposed on someone who is neither the consumer nor the producer is called a

negative externality

If a road is congested, then use of that road by an additional person would lead to a

negative externality

The provision of a public good generates a

positive externality and the use of a common resource generates a negative externality

Goods that are rival in consumption and excludable would be considered

private goods

Goods that are excludable include both

private goods and club goods

A paper plant produces water pollution during the production process. If the government forces the plant to internalize the negative externality, then the

supply curve for paper would shift to the left.

Suppose that smoking creates a negative externality. If the government does not interfere in the cigarette market, then

the equilibrium quantity of cigarettes smoked will be greater than the socially optimal quantity of cigarettes smoked.

Suppose that a firm produces electricity by burning coal. The production process creates a negative externality of air pollution. If the firm does not internalize the cost of the externality, it will produce where

the value of electricity to consumers equals the private cost of producing electricity