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Unformatted text preview: Chapter 11 Public Goods and Common Resources MULTIPLE CHOICE 1 . In the market for a good like ice-cream cones, a. an inefficient number of ice-cream cones will be produced. b. the sum of producer surplus and consumer surplus is minimized. c. price adjusts to balance supply and demand. d. the price established in the market will not reflect the value of ice cream cones to consumers. 2 . When goods are available in an economy free of charge a. market forces cannot be used to allocate resources. b. too many of these goods will be produced since there is no cost of production. c. the product will have no value for the majority of the population. d. goods are not available in market economies free of charge. 3 . Each of the following are provided by nature EXCEPT a. mountains. b. beaches. c. oceans. d. parks. 4 . Each of the following are provided by government EXCEPT a. playgrounds. b. parks. c. beaches. d. parades. 5 . For most goods in an economy, the signal that guides the decisions of buyers and sellers is a. greed. b. the self-interest of both buyers and sellers. c. prices. d. profits. 6 . In an economy, when goods do not have a price, what/who primarily ensures that the good is produced? a. entrepreneurs b. the government c. charities d. nature 7 . When a good is excludable it means that a. one persons use of the good diminishes another persons ability to use it. b. people can be prevented from using the good. c. no more than one person can use the good at the same time. d. everyone will be excluded from obtaining the good. 8 . A good is excludable if a. one person's use of the good diminishes another person's enjoyment of it. b. the government can regulate its availability. c. it is not a normal good. d. people can be prevented from using it. 9 . When a good is rival it means that a. one persons use of the good diminishes another persons ability to use it. b. people can be prevented from using the good. c. no more than one person can use the good at the same time. d. everyone will be excluded from obtaining the good. 10 . If one persons use of a good diminishes another persons enjoyment of it, the good is a. rival. b. excludable. c. normal. d. exhaustible. 11 . Goods that are excludable include both a. natural monopolies and public goods. b. public goods and common resources. c. common resources and private goods. d. private goods and natural monopolies....
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- Spring '08