midterm 2 with answers - Eco 304k midterm 2 (100 points...

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(100 points total) Multiple Choice (37 points total) Identify the letter of the choice that best completes the statement or answers the question. Each question is worth 1 point. ____ 1. When a good is rival it means that a. one person's use of the good diminishes another person's 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. ____ 2. Goods that are NOT excludable include both a. private goods and public goods. b. natural monopolies and common resources. c. common resources and public goods. d. private goods and natural monopolies. ____ 3. If the local government in Richmond, Missouri decides to put on a public fireworks display, the display would be a. excludable. b. rival. c. a public good. d. All of the above are correct. ____ 4. Due to the externalities associated with public goods and common resources, a. private markets will lead to an efficient allocation of resources. b. government intervention can potentially raise economic well-being. c. private markets will correct for the gain or loss to consumer surplus. d. the free-rider problem is eliminated. ____ 5. The government provides public goods because a. private markets are incapable of producing public goods. b. free-riders make it difficult for private markets to supply the socially optimal quantity. c. markets are always better off with some government oversight. d. external benefits will occur to private producers. ____ 6. Excessive fishing occurs because a. each individual fisherman has little incentive to maintain the species for the next year. b. fishermen rely on government managers to worry about fish populations. c. fishermen are concerned about the population dynamics of fish biomass, not current harvest rates. d. fishermen have other marketable skills and do not fear exploitation of fish reserves. ____ 7. A stairwell in a certain office building is always congested at 12:00 p.m. and 5:00 p.m. The congestion is so bad that people have been complaining to the building's owner. Which of the following methods would be the most efficient way of reducing congestion? a. Charge everyone who uses the stairwell when it is congested a fee based on their income, with richer people paying more than poorer people. b. Encourage people to voluntarily keep off the stairwell during peak times. c. Charge everyone who uses the stairwell when it is congested the same fee. People who value the use of the stairs the most will be the ones who use the stairwell at peak times. d. Hold a lottery to determine who wins the right to use the stairwell at peak times. ____ 8.
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midterm 2 with answers - Eco 304k midterm 2 (100 points...

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