micro econ exam 3 2ND 1/2

National defense is an example of a good that is: A) only nonexcludable. B) neither nonrival nor nonexcludable. C) largely nonrival and nonexcludable. D) only nonrival

C

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________. A) TVs; TVs B) radios; both goods C) TVs; radios D) radios; TVs

D

If a society's consumption possibilities are identical to its production possibilities that society has A) an open economy. B) a free trade policy. C) a two-person economy. D) a closed economy.

D

When a negative externality is present in a market, the government should: A) always intervene. B) intervene if the benefit of doing so exceeds the cost. C) never intervene. D) intervene it if the public supports doing so.

B

A good or service that is both rival and excludable is a: A) collective good. B) public good. C) commons good. D) private good.

D

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the most of each type that can be produced per day if each worker fully specializes according to his/her comparative advantage? A) 4 TVs and 10 radios B) 5 TVs and 12 radios C) 3 TVs and 8 radios D) 2 TVs and 6 radios

A

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Jen to produce one TV? A) 5 radios B) 10 radios C) 1/5 radio D) 1/3 radio

A

Broadcast television is an example of: A) a public good provided by private firms. B) a collective good provided by the government. C) a private good provided by private firms. D) a private good provided by the government.

A

One disadvantage of using the government to provide pure public goods is that everyone receives ________ of the public good and has ________ for the public good. A) the same amount; a different reservation price B) a different amount; the same reservation price C) a different amount; a different reservation price D) the same amount; the same reservation price

A

Suppose the latest Hunger Games movie first played in theaters, where it sold out during its opening week. Several months later it was available on pay-per-view TV. Two years later it was shown on CBS, a broadcast television network. When the movie was playing in theaters, it was a ________ good; when it was available on pay-per-view TV, it was a ________ good; and when it was shown on CBS, it was a ________ good. A) private; collective; public B) collective; private; commons C) private; public; public D) collective; commons; public

A

The current U.S. income tax system requires taxpayers to pay a higher marginal tax rate on higher levels of taxable income. Suppose that the tax rate is 10 percent on the first $15,000 of taxable income, 15 percent on the next $45,000 of taxable income, 30 percent on the next $60,000 of taxable income, and 35 percent on taxable income above $120,000. This income tax system is: A) progressive. B) regressive. C) progressive when income is low, then regressive. D) proportional.

A

A good or service that is rival but nonexcludable is called a ________, and a good or service that is nonrival but excludable is called a ________. A) commons good; public good B) commons good; collective good C) public good; private good D) public good; collective good

B

Aaron's neighbor Cliff keeps his front yard well-manicured and plants beautiful flowers which Aaron enjoys. If local law prevents Cliff from fencing his yard, the beauty of Cliff's front yard is: A) nonexcludable. B) both nonrival and nonexcludable. C) nonrival. D) a private good.

B

An Internet site that maintains a database of product reviews that anyone can access and that has advertisement banners is: A) a private good. B) a privately provided public good. C) a privately provided collective good. D) a government-provided public good.

B

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Rich to produce one radio? A) 1/12 TV B) 1/3 TV C) 1/6 TV D) 4 TVs

B

Beyond the provision of public goods, government exists to address: A) national defense. B) externalities and property rights. C) the problem of declining moral values. D) limiting personal freedom.

B

Free trade is ________, because it ________ the size of the pie available to the economy. A) efficient; decreases B) efficient; increases C) inefficient; decreases D) inefficient; increases

B

Goods like Wi-Fi networks that are nonrival but excludable are known as: A) private goods. B) collective goods. C) commons goods. D) pure public goods.

B

If a good is nonrival, then: A) consumption of the good by one person diminishes its availability to others. B) consumption of the good by one person does not diminish its availability to others. C) consumers can enjoy it without paying for it. D) it has no substitutes.

B

If the price of a good in a closed economy is greater than the world price, then if the country opens its markets to world trade the country will be a ________ of that good. A) producer B) net importer C) importer and exporter D) net exporter

B

Spike pays $14,000 in taxes and earns $100,000. Ace earns $120,000. If the tax system is progressive, Ace will pay ________ in taxes. A) $16,800. B) more than $16,800. C) more than $15,500 but less than $16,800. D) $15,500.

B

The government subsidizes education because: A) it is a pure public good. B) education is thought to have positive externalities. C) private firms will not provide education. D) the government can provide a better education than can private firms.

B

The slope of a many-worker consumption possibilities is determined by the relative price of A) the good that is most in demand. B) both goods in the world market. C) the good that is least in demand. D) both goods in the domestic market.

B

Which of the following statements about the provision of public goods is true? A) The government should always provide public goods. B) If the marginal benefit of a public good exceeds its marginal cost, more should be provided. C) The total benefit of a public good should equal its total cost. D) The optimal level of a public good occurs when all taxpayers receive some of the good.

B

in an open economy, a society's consumption possibilities are typically ________ its production possibilities. A) less than B) greater than C) unrelated to D) equal to

B

According to the textbook, the private provision of television programming may not be socially optimal because: A) the government strictly regulates the market. B) consumers don't pay for broadcast television. C) programs are chosen on the basis of audience size rather than the value to the audience. D) most consumers don't like watching television commercials.

C

The combination of pork barrel spending and logrolling leads to: A) the largest net benefit for society. B) the quick termination of projects that are wasteful. C) inefficiently large government spending. D) under provision of public goods.

C

The development of pay-per-view technology: A) allows consumers to see movies that were previously unavailable for several years. B) has made all consumers worse off. C) converted a pure public good into a collective good. D) converted a collective good into a private good.

C

The government should only provide a pure public good if ________ and ________. A) voters desire the good; no new taxes will be needed B) the good's benefits exceed its costs; the government can afford to provide the good C) the good's benefits exceed its costs; there is no less costly way to provide it D) the good is indeed a public good; the majority of voters want it to be provided

C

Your state department of transportation is considering installing toll booths with gates on a quiet section of highway. If this is done, a good that is currently a: A) rival good will become an excludable good. B) nonrival good will become a rival good. C) nonexcludable good will become an excludable good. D) public good will become a private good.

C

Logrolling refers to: A) the practice of introducing many similar bills in hopes that one of the versions will pass. B) the practice of attaching a controversial bill to a large appropriations bill. C) legislation that affects the timber industry. D) the practice whereby legislators support each other's pork barrel spending.

D

Pork barrel programs are government programs that: A) benefit industry. B) benefit agriculture. C) increase total economic surplus but lack political support. D) benefit local areas but are of questionable value from a national perspective.

D

The world price of a good is determined by the A) supply of that good in the world market. B) demand for that good in the world market. C) country that produces the good. D) worldwide demand and supply of that good.

D