c28 - 1. The two main characteristics of a public good are:...

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The two main characteristics of a public good are: A) production at constant marginal cost and rising demand. B) nonexcludability and production at rising marginal cost. *C) nonrivalry and nonexcludability. D) nonrivalry and large negative externalities. 2. Unlike a private good, a public good: A) has no opportunity costs. *B) has benefits available to all, including nonpayers. C) produces no positive or negative externalities. D) is characterized by rivalry and excludability. 3. Which of the following is an example of a public good? *A) a weather warning system B) a television set C) a sofa D) a bottle of soda 4. An example of a public good is: A) broadband Internet access. *B) homeland defense. C) a baseball. D) a lawn mower. 5. Refer to the data below. P a and P b are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society. The collective willingness of this society to pay for the 2nd unit of this public good is: Q P a P b 1 $ 3 $ 5 2 2 4 3 1 3 4 0 2 5 0 1 A) $2. B) $4. *C) $6. D) $8. 6. Refer to the above data. If the marginal cost of this good at the optimal quantity is $4, the optimal quantity must be: A) 1 unit. B) 2 units. *C) 3 units. D) 4 units. 7. Refer to the above data. Suppose government has already produced 4 units of this public good. The amount individual B is willing
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This note was uploaded on 10/03/2010 for the course ECON 0453 taught by Professor Dongwahu during the Spring '09 term at Shoreline.

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c28 - 1. The two main characteristics of a public good are:...

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