A good is a nonexcl udable if a its consumption by

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60.A good is a nonexcludable ifa.its consumption by one person does not reduce its consumption by others.960
b.it is impossible to prevent people from obtaining the benefits of the good once it has beenproduced.c.no negative externalities are associated with its production and consumption.d.it is free in the first place; that is, it is so abundant that people can get all they want at zeroprice.ANS: BPTS:1DIF:ModerateNAT:AnalyticLOC:Markets, market failure, and externalities61.A __________ good is one that once produced and provided to one person, provides benefits toother persons.PTS:1DIF:EasyNAT:Analytic
LOC:Markets, market failure, and externalities62.Asymmetric informationexists whenPTS:1DIF:EasyNAT:Analytic
LOC:Markets, market failure, and externalities63.It seems quite possible that cigarette companies concealedinformation about the effect of smokingon health, causing cigarette prices to be __________ and cigarette sales to be __________than would have been the case under symmetric information.PTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities64.If an asymmetry of information is removed and laborers' preferences change against employment, thiswill shift the equilibrium in the labor market to thea.northwest.b.northeast.c.southwest.d.southeast.ANS: APTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities65.The government's provision of nonexcludable public goods such as national defense is acceptedbecause
c.people do not value public goods such as national defense very highly.d.a and ce.all of the aboveANS: BPTS:1DIF:ModerateNAT:AnalyticLOC:Markets, market failure, and externalities66.Marginal social costs are equal toPTS:1DIF:EasyNAT:Analytic
LOC:Markets, market failure, and externalities

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Term
Spring
Professor
CaraTucker
Tags
Externality, A C Pigou

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