Chapter 4 Public Goods
Multiple Choice
1. Public goods are characterized by
A) nonrivalness.
B) excludability.
C) the sum of the MRSs equaling MRT.
D) all of the above.
Ans: d
2. Market mechanisms are unlikely to provide
A) prices.
B) nonrival goods efficiently.
C) supply and demand.
D) none of the above.
Ans: b
3. A pure private good is
A) nonrival in consumption and subject to exclusion.
B) rival in consumption and subject to exclusion.
C) rival in consumption and not subject to exclusion.
D) all of the above.
Ans: b
4. Commodity egalitarianism refers to commodities that
A) are important for most consumers.
B) are too dangerous for most consumers.
C) should be made available to all consumers.
D) are good ideas but never produced.
Ans: c
5. Charging individual prices that are based on consumers’ willingness to pay is
A) government price supports.
B) will pricing.
C) second tier pricing.
D) price discrimination.
Ans: d
, 6. Equilibrium for public goods is characterized by
A) MSB = MSB.
B) MRS = MRT.
C) MRS1 = MRS2 = MRS3=…= MRSn = MRT.
D) MC = MB.
E) MRS – MRT = MSB.
Ans: c
7. Summing demand curves horizontally sends market to individuals, while summing
vertically sends market to individuals.
A) price; price
B) quantity; quantity
C) quantity; price
D) price; quantity
Ans: d
8. Public goods can be
A) provided privately.
B) provided publicly.
C) subject to free rider problems.
D) all of the above.
Ans: d
9. A is a person who wants to enjoy the benefits of a public good without contributing his or
her marginal benefit to the cost of financing the amount made.
A) free rider
B) politician
C) price maker
D) price optimizer
Ans: a
10. Congestible public goods
A) are nonrival in consumption.
B) cannot be priced in the market.
C) are rival in consumption.
D) are never provided by the private sector.
Ans: c
11. A private good is
A) nonrival in consumption.
B) subject to free rider problems.
C) not subject to exclusion.
D) subject to exclusion.
Ans: d
Multiple Choice
1. Public goods are characterized by
A) nonrivalness.
B) excludability.
C) the sum of the MRSs equaling MRT.
D) all of the above.
Ans: d
2. Market mechanisms are unlikely to provide
A) prices.
B) nonrival goods efficiently.
C) supply and demand.
D) none of the above.
Ans: b
3. A pure private good is
A) nonrival in consumption and subject to exclusion.
B) rival in consumption and subject to exclusion.
C) rival in consumption and not subject to exclusion.
D) all of the above.
Ans: b
4. Commodity egalitarianism refers to commodities that
A) are important for most consumers.
B) are too dangerous for most consumers.
C) should be made available to all consumers.
D) are good ideas but never produced.
Ans: c
5. Charging individual prices that are based on consumers’ willingness to pay is
A) government price supports.
B) will pricing.
C) second tier pricing.
D) price discrimination.
Ans: d
, 6. Equilibrium for public goods is characterized by
A) MSB = MSB.
B) MRS = MRT.
C) MRS1 = MRS2 = MRS3=…= MRSn = MRT.
D) MC = MB.
E) MRS – MRT = MSB.
Ans: c
7. Summing demand curves horizontally sends market to individuals, while summing
vertically sends market to individuals.
A) price; price
B) quantity; quantity
C) quantity; price
D) price; quantity
Ans: d
8. Public goods can be
A) provided privately.
B) provided publicly.
C) subject to free rider problems.
D) all of the above.
Ans: d
9. A is a person who wants to enjoy the benefits of a public good without contributing his or
her marginal benefit to the cost of financing the amount made.
A) free rider
B) politician
C) price maker
D) price optimizer
Ans: a
10. Congestible public goods
A) are nonrival in consumption.
B) cannot be priced in the market.
C) are rival in consumption.
D) are never provided by the private sector.
Ans: c
11. A private good is
A) nonrival in consumption.
B) subject to free rider problems.
C) not subject to exclusion.
D) subject to exclusion.
Ans: d
