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Econ_198_Spr_07_Exam__3 - Introduction to Microeconomics...

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Introduction to Microeconomics Allen R. Sanderson Economics 19800 Spring 2007 THIRD HOUR EXAMINATION Name (Please Print): ______________________________________ [41 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 20 points total. 1. Which of the following situations provides the best example of the free-rider problem? a. Diana, a single mother, draws welfare and child-support payments from several sources and doesn’t seriously try to find employment. b. Juanita listens to National Public Radio all the time but has never made a contribution/donation. c. Tom and Nancy, wealthy corporate lawyers, send their children to public schools. d. A paper mill dumps part of its waste products into a nearby stream. e. Tom backpacks in the mountains and camps on government land and isn’t charged a fee. 2. When Charles Wheelan says that his “decision to buy and drive an SUV affects everyone else on the road, yet none of these people has a say in my decision,” this is basically one about: 3. Which of the following most clearly illustrates the concept of derived demand? 4. The requirement that all employees must join the recognized union and pay dues within a specified length of time after their employment with the firm is called: 5. The usual justification for government provision of a public good is: a. on equity grounds – even poor people should have access to certain essential goods. b. economies of scale can be so large that a single firm would not have adequate resources to produce it efficiently by itself. c. that there are simply some things in a free-enterprise system too valuable to be left to the whims of the marketplace.
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