5B Web Quiz.docx - (5b Web Quiz 2 Why does the government...

This preview shows page 1 - 3 out of 5 pages.

(5b Web Quiz) 2) Why does the government do what it does? Governments in the United States build and run schools, libraries, and parks, but not gas stations, clothing stores, or grocery stores? Why some things and not other things? Ans: Because markets would not achieve allocative efficiency in producing schools, libraries, and parks. 3) Which of the following is the best example of a product with positive externalities (spillover benefits)? Ans: Education 4) Which of the following is true based on this graph? Ans: Q1 is the profit maximizing quantity; Q2 is the efficient quantity
Image of page 1

Subscribe to view the full document.

5) If there are positive externalities (Spillover benefits) then the demand curve is to the left of MSB. If there are positive externalities the demand decreases and moves to the left of the MSB. WHY? Ans: Because positive externalities (spillover benefits) allow some people to benefit without paying (demanding) 6) What is the economic problem caused by positive externalities (spillover benefits)?
Image of page 2
Image of page 3

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern