ECON 101 CH 5

The principle of reciprocity ("golden rule") states, "the winner deserves the golden ticket". "treat others as you would want them to treat you". "the one who has the gold makes the rules." "your best friends should be given the golden parachute".

"treat others as you would want them to treat you".

The economist considered the founder of Solidarism is: Karl Marx Adam Smith Heinrich Pesch Thomas Aquinas

Heinrich Pesch

Markets fail when externalities are present: because all of the costs and benefits of producing a good are reflected in the market price. if the positive externalities are less than the negative externalities. because some of the costs and benefits of producing a good are not reflected in the market price. because profits are not maximized. only if they are negative; positive externalities are not market failures.

because some of the costs and benefits of producing a good are not reflected in the market price.

How does an additional individual's consumption of a good that is nonrival-in-consumption, such as a radio broadcast, affect the amount of the good available to other consumers? The amount available to others will decline. The amount available to others is unaffected. The amount available to others will increase. The amount available to others is eliminated.

The amount available to others is unaffected.

Which of the following provides the best example of a public good? an unscrambled television signal. the medical services provided by a local hospital. residential trash pickups provided by a local government. elementary and secondary education.

an unscrambled television signal

The spillover effects of actions that affect the well-being of nonconsenting third parties are called: internalizations. externalities. side components. free riders.

externalities.

A situation in which the structure of incentives is such that the political process, including democratic political decision-making, will encourage individuals to undertake actions that conflict with economic efficiency is called ______________ ___

government failure

A good is considered to be a public good if it: is both nonrival-in-consumption and nonexcludable. is a good produced by the government sector. is a good whose production is financed by tax revenue. benefits only a small group of consumers but is very costly to produce.

is both nonrival-in-consumption and nonexcludable.

The principle of reciprocity: is found in many ethical and religious teachings throughout the world. implies we should treat others as inferior to us. exists only in the Judeo-Christian tradition. states that we should only reciprocate good deeds when it is to our benefit.

is found in many ethical and religious teachings throughout the world.

___ ______________ refers to a situation in which the structure of incentives is such that markets will encourage individuals to undertake activities that are inconsistent with economic efficiency.

market failure

The government sometimes provides public goods because: private markets would not produce the efficient quantity of the goods. private markets would not produce any of the goods. private markets would charge too high a price for the goods. the government produces public goods more efficiently than private markets can.

private markets would not produce the efficient quantity of the goods.

___ ______________ are goods for which rivalry among consumers is absent and exclusion of nonpaying customers is difficult.

public goods

The "free rider problem" occurs in connection with: public goods. both public and private goods. private goods. goods that are not scarce.

public goods.

A basic proposition of the Scholastic concept of natural law is that: it cannot be analyzed with human reasoning. it naturally evolves over time. it is superior to artificial law. some of the same moral principles can be found across many cultures and time.

some of the same moral principles can be found across many cultures and time.

Thomas Aquinas made __________ the basis for his ideas on the just price. the free market utility maximization socialism the Golden Rule

the Golden Rule

Solidarism influenced the thinking of Pope John Paul II and his writings on Catholic Social Teaching. These, in turn, inspired the Solidarity movement in Poland which eventual lead to the demise of the Roman Empire. the British Empire. Communism in China. the Soviet Union.

the Soviet Union.

After Jack made his purchase he discovered that he unwittingly paid twice as much as most people pay. He now has buyer's remorse. His buyer's remorse is a symptom that: the item he purchased was without value. Jack is at fault. the principle of reciprocity was not fulfilled. buyer's remorse should play no part in economics.

the principle of reciprocity was not fulfilled.

Consider two goods--one that generates external benefits and another that generates external costs. A competitive market economy would tend to produce: too much of both goods. too little of the good that generates external benefits and too much of the good that generates external costs. too little of both goods. too much of the good that generates external benefits and too little of the good that generates external costs.

too little of the good that generates external benefits and too much of the good that generates external costs.