Question 1

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MBT)  for the public good?

Accepted Answer

A)  MBT = 10 - 3q
B)  MBT =30- 3q
C)  MBT =10 - 1/3.q
D)  MBT =30 - 1/3q
E)  None of the above.

Question 2

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MBT)  for the public good?

Accepted Answer

A)  MBT = 10 - q
B)  MBT =40- 2q
C)  MBT =40 - q
D)  MBT =20 - 1/2q
E)  None of the above.

Question 3

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.The marginal cost of providing the good is $10 per unit.How many units are supplied in the private-sector market?

Accepted Answer

A)  0
B)  10
C)  20
D)  40
E)  5

Question 4

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is the efficient level of output?

Accepted Answer

A)  0
B)  10
C)  20
D)  40
E)  5 B

Question 5

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is DWL in the market outcome?

Accepted Answer

A)  10
B)  20
C)  30
D)  40
E)  50 E

Question 6

A public good is:

Accepted Answer

A)  A good that is both rival and excludable.
B)  A good that is rival and non-excludable.
C)  A good that is non-excludable and non-rival.
D)  A good that is both excludable and non-rival.
E)  Any good provided by the government. C

Question 7

The tragedy of the common arises when:

Accepted Answer

A)  A good is rival but non-excludable.
B)  Property rights can be used to allocate good or services via the price mechanism.
C)  A good is non-rival and non-excludable.
D)  A good is rival but non-excludable
E)  None of the above.

Question 8

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $15 per unit, what is the efficient level of output?

Accepted Answer

A)  30
B)  20
C)  10
D)  5
E)  15

Question 9

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $0 per unit, what is the DWL arising in the market outcome?

Accepted Answer

A)  DWL = $150
B)  DWL = $75
C)  DWL = $50
D)  DWL = $300
E)  DWL = $200

Question 10

An inefficiency can arise in the provision of public good:

Accepted Answer

A)  Because the good is non-rival.
B)  As a private sector firm cannot enforcement payment for the good.
C)  Because the marginal benefit curve for society is the vertical summation of individual MB curves.
D)  a and C

Exam 17: Public Goods and Common Resources

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MB_T) for the public good?

Correct Answer
verified

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MB_T) for the public good?

Correct Answer
verified

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.The marginal cost of providing the good is $10 per unit.How many units are supplied in the private-sector market?

Correct Answer
verified

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is the efficient level of output?

Correct Answer
verified
B

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is DWL in the market outcome?

Correct Answer
verified
E

A public good is:

Correct Answer
verified
C

The tragedy of the common arises when:

Correct Answer
verified

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $15 per unit, what is the efficient level of output?

Correct Answer
verified

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $0 per unit, what is the DWL arising in the market outcome?

Correct Answer
verified

An inefficiency can arise in the provision of public good:

Correct Answer
verified

Exam 17: Public Goods and Common Resources

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MBT) for the public good?

Correct AnswerverifiedShow Answer

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MBT) for the public good?

Correct AnswerverifiedShow Answer

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.The marginal cost of providing the good is $10 per unit.How many units are supplied in the private-sector market?

Correct AnswerverifiedShow Answer

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is the efficient level of output?

Correct AnswerverifiedB

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.If the marginal cost of provision is $30 per unit, what is DWL in the market outcome?

Correct AnswerverifiedE

A public good is:

Correct AnswerverifiedC

The tragedy of the common arises when:

Correct AnswerverifiedShow Answer

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $15 per unit, what is the efficient level of output?

Correct AnswerverifiedShow Answer

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $0 per unit, what is the DWL arising in the market outcome?

Correct AnswerverifiedShow Answer

An inefficiency can arise in the provision of public good:

Correct AnswerverifiedShow Answer

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.What is society's marginal benefit (MB_T) for the public good?

Correct Answer
verified

Consider an economy with two consumers, each with a marginal benefit for a public good of MB = 20 - 1/2q.What is society's marginal benefit (MB_T) for the public good?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified
E

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified