Chapter 11(sample exercise)

Chapter 11(sample exercise) - Chapter 11Public Goods and...

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1. 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. 2. When a good is excludable 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. 3. If one person's use of a good diminishes another person's enjoyment of it, the good is a. rival. b. excludable. c. normal. d. exhaustible. 4. 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. 5. Goods that are rival 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. 6. When something of value has no price attached to it such as a public good a. externalities will be present. b. the good will be completely used up. c. only those who are better off have to pay. d. private companies will eventually produce the product and the good will no longer be free. 7. An example of a natural monopoly would be a. cable TV. b. tornado sirens. c. clothing. d. the environment. 8. Common resource goods are a. excludable but not rival. b. rival but not excludable. c. both excludable and rival. d. neither excludable nor rival. 9.
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This note was uploaded on 01/07/2010 for the course ECO eco1104 taught by Professor Davidgray during the Fall '09 term at University of Ottawa.

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Chapter 11(sample exercise) - Chapter 11Public Goods and...

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