Question 1

Hamburgers are example of goods that are:

Accepted Answer

Hamburgers are rival goods, meaning that one person's consumption of a hamburger prevents another person from consuming the same hamburger. They are also excludable goods, meaning that the seller can prevent someone who has not paid for the hamburger from consuming it.

Question 2

Which of the following statements is TRUE? I. In order for society to have a sufficient level of national defense, the government must tax the public to raise funds for a standing army. II. For every 100 people that use a public good, approximately 500 people are prevented from using it. III. People do not have an incentive to voluntarily pay for nonexcludable goods.

Accepted Answer

Statement I is true because national defense is a public good that requires the government to provide funding for a standing army. Statement III is also true because individuals may not see the benefit of voluntarily contributing to a nonexcludable good if they believe others will free ride and they will receive the same benefit without contributing. Statement II is false because it is not a fixed ratio and depends on the specific public good in question.

Question 3

Private goods can be provided by competitive markets because they are:

Accepted Answer

Private goods are excludable, which means that those who do not pay for the good can be prevented from consuming it. This provides an incentive for producers to produce the good and for consumers to pay for it. Competitive markets are able to provide private goods because producers can earn profits by selling the good to willing buyers, and buyers have the ability to choose from multiple sellers and prices.

Question 4

Which of the following statements is FALSE?

Accepted Answer

The answer of Which of the following statements is FALSE?
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Question 5

Suppose your city has had an increase in crime and the city government decides that more police are needed to patrol at night. Which of the following funding solutions avoids the free-rider problem involved with additional police officers?

Accepted Answer

An increase in the city's sales tax would be the best choice as it ensures that everyone who purchases goods and services within the city contributes to the funding of additional police officers. This solution avoids the free-rider problem as everyone who benefits from the additional police presence is paying for it through their purchases, regardless of their income level or willingness to donate.

Question 6

A major difference between a private good and a public good is that:

Accepted Answer

Private goods are excludable and rival in consumption, while public goods are non-excludable and non-rival, making all the statements correct.

Question 7

The problem of free riders is most apparent for:

Accepted Answer

Public goods have the problem of free ridership as they are non-excludable and non-rival. This means that it is impossible to prevent someone from using the good and one person's use of the good does not diminish its availability for others. This creates an incentive for individuals to free ride, meaning that they can benefit from the good without contributing to its provision. Private goods are rival and excludable, meaning that their consumption by one person prevents their consumption by someone else and it is possible to prevent someone from using the good. Nonrival private goods, such as streaming services, may have some issues with free riding, but they can also use methods such as password sharing restrictions to prevent it. Textbooks are typically considered private goods as well, as they are excludable and rival.

Question 8

Private goods: I. are excludable. II. can be priced. III. are rival in consumption.

Accepted Answer

Private goods are excludable, meaning that it is possible to prevent someone from consuming the good if they do not pay for it. They can also be priced, meaning that a price can be set and consumers must pay that price to obtain the good. Additionally, private goods are rival in consumption, meaning that if one person is consuming the good, it is not available for someone else to consume at the same time.

Question 9

Which of the following would NOT be considered as an example of public good?

Accepted Answer

Public roads are not considered a public good because they are excludable and can be congested, making them rivalrous in consumption.

Question 10

It is difficult to get people to pay for public goods voluntarily because these goods are:

Accepted Answer

Public goods are nonexcludable, which means that individuals cannot be excluded from receiving the benefits of the goods even if they do not pay for them. This leads to a free-rider problem, where people have an incentive to not pay for the good and still receive its benefits. Due to this, markets tend to underprovide public goods.

Question 11

In which of the cases can you identify the potential for a free- rider problem?

Accepted Answer

In voluntary payments for a smog reduction program, there is potential for a free-rider problem as some individuals may choose to not contribute to the program and still benefit from the reduction in smog without consequence.

Question 12

The need to produce public goods provides a strong argument for:

Accepted Answer

The answer of The need to produce public goods provides...

Question 13

Free riders are people who:

Accepted Answer

Free riders enjoy public goods without paying for them, such as people who use public parks or sidewalks without contributing to their upkeep.

Question 14

Asteroid deflection would be considered a:

Accepted Answer

The answer of Asteroid deflection would be considered a:
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Question 15

A forced rider is someone who:

Accepted Answer

A forced rider is someone who pays a share of the costs of a public good but does not enjoy the benefits. This happens because public goods are non-excludable, meaning that it is difficult to exclude people from using them, even if they do not contribute to their provision.

Question 16

Mosquito control must be provided by government because if:

Accepted Answer

Mosquito control is a public good where individuals cannot be excluded from the benefitting from it once it is provided. This leads to the problem of free riding where people may not contribute towards mosquito control but still benefit from it. As a result, the market would underprovide mosquito control if left to private providers. Thus, it is necessary for the government to provide mosquito control to ensure it is adequately provided for the entire population.

Question 17

The sun has features of a:

Accepted Answer

The sun is a public good because it is non-excludable and non-rivalrous; everyone can use it without reducing its availability to others.

Question 18

Public goods are: I. excludable. II. nonrival. III. free to those who do not pay.

Accepted Answer

The answer of Public goods are: I. excludable. II. nonrival....

Question 19

Why is national defense a public good? I. because it is expensive to produce II. because people who don't pay for national defense still benefit from having it III. because one person's benefit from national defense doesn't reduce anyone else's benefit from it IV. because it is provided by the government

Accepted Answer

National defense is a public good because people who don't pay for it (such as tourists or individuals who do not contribute taxes) still benefit from its provision and one person's benefit doesn't reduce anyone else's benefit from it. The cost of production (I) is not the defining characteristic of a public good, and while national defense is often provided by the government (IV), this is not the only reason it is a public good.

Question 20

The city government taxes its residents to pay for mosquito control. Betty is not happy about paying the tax, for mosquitoes never bite her. Betty is a:

Accepted Answer

The answer of The city government taxes its residents to...

Quiz 18: Labor Markets