ECON%20Lind%20Macro%20Exam%202[1]

ECON%20Lind%20Macro%20Exam%202[1] - 1....

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1. "Excludability" means that: A. Sellers can restrict the benefits of a good to those who pay for it. B. Buyers can restrict other buyers from making purchases in that market. C. When one person buys a good, it is not available for others to buy. D. Government can prevent consumers from buying the good. 2. Once a government has provided a public good, everyone: A. pays the cost. B. can obtain the benefit. C. experiences positive externalities. D. experiences negative externalities. Answer the next question(s) on the basis of the following information is for public good. P a and P b represent the prices that citizens (a) and (b), the only two people in this nation, are willing to pay for additional units of a quantity (Q c ) of the public good. Q s represents the quantity of the public good supplied by government at each of the collective prices. 3. Refer to the above information. The collective willingness of this nation to pay for the fourth unit of the public good is: A. $7. B. $6. C. $5. D. $3.
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4. Refer to the above information. If the collective willingness to pay for an additional unit of this public good is $6, then the collective quantity demanded will be: A. 1 unit and the socially optimal quantity supplied will be 5 units. B. 2 units and the socially optimal quantity supplied will be 4 units. C. 3 units and the socially optimal quantity supplied will be 3 units. D. 4 units and the socially optimal quantity supplied will be 2 units.
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5. Refer to the above information. If only 1 unit of this public good is produced, then the marginal benefit is: A. $3 and the marginal cost is $9. B. $4 and the marginal cost is $7. C. $6 and the marginal cost is $3. D. $9 and the marginal cost is $3. 6. Refer to the above information. In equilibrium, the marginal benefit and cost of the public good will be: A. $7. B. $6. C. $5. D. $3. 7. If there are external or spillover benefits associated with consumption and production of a product, it can be said that the: A. government should consider placing a special tax on producers. B. government should consider prohibiting the production of the commodity. C. supply curve for the product lies too far to the right to provide an efficient allocation of resources. D. demand curve understates the total benefit from the product and resources are underallocated to its production. 8. One condition for individual bargaining to occur, according to the Coase theorem, is that there must
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ECON%20Lind%20Macro%20Exam%202[1] - 1....

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