University of Idaho: Microeconomics 202 Ch. 13

There is a skating rink in your city that is open to anybody to use at any time. They even provide skates for people who don't own any. This is an example of a good that is

rivalrous and nonexcludable

Generally, market competition and technology can A. support each other B. oppose each other C. compliment each other D. sometimes a or b.

Support each other, oppose each other (sometimes a or b)

Which of the following would be classified as a positive externality? A. a surcharge for ambulance service is shifted to property taxes B. converting a derelict empty lot to a public vegetable garden C. removing government education subsidies for public schools D. reselling outdated textbooks to under-funded public schools

converting a derelict empty lot to a public vegetable garden

An individual who wants others to pay for public goods, but plans to use those goods for their own purposes, is often referred to as a A. free rider B. tax evader C. excludable D. nonexcludable

free rider

I'mAComputerCo. would likely be more willing to undertake an innovative research project to reduce the amount of electricity required to run its computers if there were some form of guarantee that if it succeeded, A. it will enjoy a small temporary advantage over the competition. B. it would be able to set price to compensate for development costs. C. it could sell the new computers as a monopoly for at least a few years. D. it would receive a government bailout if losses could drive it out of business.

it could sell the new computers as a monopoly for at least a few years.

When it is costly or impossible to exclude someone who hasn't paid to use a particular good from using it, then that good is classified as being A. unexcludable B. public good C. non-excludable D. free rider

non-excludable

A public good is a good that is _________ ___________ , and thus is difficult for market producers to sell to individual consumers. A. excludable or rivalrous B. excludable and rivalrous C. non-excludable and non-rivalrous D. non-excludable or non-rivalrous

non-excludable and non-rivalrous

In order for a good to be classified as ____________ , when one person uses the good, others are also able to use it. A. unrivalrous B. unexcludable C. nonexcludable D. nonrivalrous

nonrivalrous

For a positive externality, than the social benefits. A. social benefits of an action are more B. social costs of an action are less C. private benefits of an action are less D. private benefits of an action are more

private benefits of an action are less

For a negative externality, the _______________________ than the costs imposed on society as a whole. A. social costs of an action are less B. social benefits of an action are more C. private costs of an action are less D. private benefits of an action are more

private costs of an action are less

Government has a variety of policies that allow inventors to _____________ , such as the granting patents and ______________________ . A. receive a reasonable rate of return; lifetime intellectual property rights. B. receive an increased rate of return; subsidization of research and development C. protect their inventions; limited copyrights during the inventor's lifetime D. register their inventions; unlimited copyrights during the inventor's lifetime

receive an increased rate of return; subsidization of research and development

Cathy can take either of two separate roads to drive to work. The first is a lightly used new toll road that is rarely congested. The second road is a local road with no tolls, but it is often congested and has many potholes. In this instance, the toll road is A. rivalrous and nonexcludable B. rivalrous and excludable C. nonrivalrous and nonexcludable D. nonrivalrous and excludable

rivalrous and nonexcludable

Which of the following would most likely be recognized as a defining characteristic of a public good? A. the good is nonrivalrous item B. the good is nonexcludable item C. the good is both a and b above D. the good is a separate and identifiable item

the good is both a and b above

If large numbers of individuals choose to behave as free riders, A. public goods will quickly be privatized. B. the public good may never be provided. C. more of the public good will be available for paying riders. D. public domain technologies become more difficult to obtain.

the public good may never be provided.