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