Unit 4 Econ Review

Goods that are non-excludable and non-rivalrous in their consumption are called

• market failure

• public goods

• gross domestic product (GDP)

• externalities

Goods that produce social costs greater than the market price of those goods have

• negative externalities

• positive externalities

• non-rivalrous consumption

• non-excludable consumption

An example of a positive externality is

• soil contamination below an auto mechanic shop

• increased air traffic noise from a new runway

• Herd immunity developing through individual vaccinations

• habitat loss due to expanding farmland

A potential negative externality of the proposed copper-nickel mine in Northern MN is...

• mining innovation

• increased tourism

• polluting water in the Boundary Waters Canoe Area

• job creation

Taxing companies and producers to cover the cost of negative externalities is an effective strategy.

• True

• False

Public goods are not susceptible to a market failure known as "free riders".

• True

• False

What does a Gross Domestic Product (GDP) number tell us about a nation's economy?

• The average production value for each resident

• The value of goods produced by a nation's companies worldwide

• The total hidden costs of all externalities.

• The total value of all final goods and services produced in that nation

Which of the following usually comprises the largest percentage of the United States' GDP per year?

• household consumption

• government expenditure

• business investment

• net export

The U.S. typically has a negative net exports number because it usually imports more goods than it exports.

• True

• False

During times of economic contraction/recession in the business cycle, which is one likely side effect in the economy?

• hiring

• unemployment

• inflation

• hyperinflation