Mod 6.3: Public Goods

An increase in the marginal social benefit of consuming a public good should result in:

• no change in the value of the good

• a decrease in the social costs associated with consuming the good

• an increase in the optimal quantity of the good

• a decrease in public production of the good

• a decrease in the social costs associated with producing the good

If a good cannot be consumed by multiple people at the same time, it is:

• nonexcludable

• artificially scarce

• a public good

• a normal good

• rival in consumption

Which of the following types of goods are always nonrival in consumption?

• public goods

• normal goods

• inferior goods

• private goods

• common resources

If people who haven't paid for a good can be prevented from consuming it, the good is:

• free

• nonrival in consumption

• excludable

• valuable

• public

Which of the following are excludable? (CHOOSE ALL THAT APPLY)

• normal goods

• artificially scarce goods

• common goods

• private goods

• public goods

The only goods that will be produced and consumed in efficient quantities in a

competitive market are

• inferior goods

• artificially scarce goods

• common resources

• public goods

• private goods

Which of the following is the best example of the free-rider problem?

• A company gives away free samples of a new product.

• Sammy did all of the rowing when he and Kelan were paired up in kayaks in Catalina.

• There are economies of scale in the production of passenger elevators.

• Aneesh brings donuts when London brings coffee.

• Rahul gives Clover gas money for a ride to school.

Which of the following would most likely worsen the overuse of a public resource?

• a tree harvesting tax

• a government regulation that bans chainsaws in the forest

• a limited tree harvesting season

• tradable licenses for tree harvesting

• a subsidy for tree harvesting