Econ Test 1 Chapter 9 Study

When goods and services are nonrivalrous, the ________ of a good or service by one person does not change the quantity available for consumption by others

consumption

A negative _______ is the uncompensated cost of an activity that imposed on a third party

externality

When the marginal benefit of pollution prevention _______, the equilibrium quantity of pollution prevention ________

increases, increases or decreases, decreases

When a ________ externality exists, the socially optimal level of output will be less than the resulting from a private market

negative

When a firm lacks the ability to prevent people from consuming a good or service, the good is called a ____________ good

nonexcludable

When people cannot be prevented or excluded from consuming a good or service, then that good or service is called

nonexcludable

A public good is any good or service that is

nonrivalrous and nonexcludable

The supply of a good or service that reflects only the private costs of its production is called

private supply

One potential role of government is to provide ______ goods that otherwise would be underprovided or not provided at all

public

A property right is

the exclusive right to determine how a resource is used

A market failure occurs when

the market does not produce an output level that maximizes total surplus

If the marginal cost of a pollution prevention program exceeds the marginal benefit of the program

the program will not proceed

True or False. Sometimes private markets can successfully provide public goods

True