Pratice Third Exam Fall 2010

Pratice Third Exam Fall 2010 - Pratice Third Exam Fall 2010...

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Pratice Third Exam Fall 2010 Student: ___________________________________________________________________________ 1. Market failure means that the economy is definitely producing: A. A suboptimal mix of output B. At a point beyond the production possibilities curve C. At a point inside the production possibilities curve D. Zero output 2. Which of the following is not an example of market failure? A. Goods that produce external costs are overproduced B. Public goods experience free-riders C. Goods are distributed to those with the most money D. Government spending is too large 3. Which of the following is considered a market failure? A. Goods are distributed inequitably B. Public goods are overproduced C. Goods that generate external benefits are overproduced D. Private goods are underproduced 4. Which of the following is not an example of market failure? A. Public goods B. Government intervention C. Market power D. Externalities 5. Market failure establishes a basis for: A. Market power B. Externalities C. Government intervention D. Private goods
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6. A private good is unique because: A. Non-payers can be prevented from consuming it B. It can be enjoyed exclusively by free riders C. The market is likely to produce too little of it D. It is provided most efficiently by government 7. In economics, a public good: A. Is any good produced by the government B. Has social costs that are lower than private costs C. Is provided in an optimal amount by the market D. Cannot be denied to consumers who do not pay 8. Which of the following is used to justify the government's role in providing national parks? A. Inequity B. Market power C. The free-rider dilemma D. External costs 9. The free-rider problem arises because those who: A. Do not pay cannot be excluded B. Pay are not willing to share C. Demand the goods are excluded D. Supply the goods are greedy 10. The free-rider problem arises because: A. Private goods are not available B. Most public goods involve illegal activity C. People prefer private goods D. Public goods can be jointly consumed 11. The problem with public goods is that those who do not pay receive: A. None of the good B. The same amount of the good as those who pay C. Some of the good but less than those who pay D. More of the good than those who pay
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12. When public goods are marketed like private goods: A. Too many goods are produced B. Many consumers want to buy the goods C. Too few goods are produced D. Government failure results 13. The market produces too few public goods because: A. The link between payment and consumption is broken B. They must be paid for by wealthy individuals C. Only the government can produce public goods D. The market distributes goods to those with the most money 14. The market underproduces public goods because: A. The government is mandated to produce public goods B. People do not want public goods as much as private goods C. People are less willing to pay for public goods than for private goods D. Of concerns about equity
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Pratice Third Exam Fall 2010 - Pratice Third Exam Fall 2010...

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