Sign up for FREE

Mic11: Externalities, Public goods

Last updated about 6 years ago

5 questions

1

1

1

1

1

Question 1

1.

A cost or benefit of a market transaction that spills over onto a third party is referred to as:

Externality

Incentive

Government regulation

Public good

Question 2

2.

Which of the following is true of a negative externality such as pollution?

It should be encouraged by government using taxes

It should be encouraged by government using subsidies

It should be discouraged by government using subsidies

It should be discouraged by government using taxes

Question 3

3.

Goods and services that the government provides to its citizens and are paid for with taxes are called:

Capital goods

Private goods

Collective goods

Public goods

Question 4

4.

What two characteristics apply to public goods?

Public goods are rival and excludable

Public goods are non-rival and non-excludable

Public goods are rival and non-excludable

Public goods are non-rival and excludable

Question 5

5.

What is the problem with the picture above?

People wouldn't pay for something they could get for free

There might be a cloudy day and you can't see the sunset

The view might be better somewhere else

$10 is too expensive a price to pay