ECON 2 Assignment 1 EXAM QUESTIONS (39 TERMS) WITH VERIFIED DEFINITIONS UPDATED 2024
When goods do not have a price, which of the following primarily ensures that the good is produced?
A. the market
B. buyers
C. sellers
D. government
When a good is rival in consumption,
A. people can be p...
1). When goods do not have a price, which of the following primarily ensures that the good is
produced?
a. the market
b. buyers
c. sellers
d. government
Ans: D. government
2). When a good is rival in consumption,
a. people can be prevented from using the good.
b. an unlimited number of people can use the good at the same time.
c. everyone will be excluded from obtaining the good.
d. one person's use of the good diminishes another person's ability to use it.
Ans: D. one person's use of the good diminishes another person's ability to use it.
3). A television broadcast is an example of a good that is
a. not rival in consumption.
b. social.
c. normal.
d. private.
Ans: A. not rival in consumption
4). The value and cost of goods are easiest to determine when the goods are
a. private goods.
b. common resources.
c. public goods.
d. club goods.
Ans: A. private goods
5). At the local park there is a playground that anyone may use. there is rarely anyone using the
playground, so children who use the playground receive full enjoyment from its use. the
playground is
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, a. rival in consumption, but is not excludable.
b. rival in consumption and is excludable.
c. not rival in consumption nor is it excludable.
d. not rival in consumption, but is excludable.
Ans: C. not rival in consumption nor is it excludable
6). Because it is
a. neither excludable nor rival in consumption, a tornado siren is a common resource.
b. excludable but not rival in consumption, a tornado siren is produced by a natural
monopoly.
c. rival in consumption but not excludable, a tornado siren is a common resource.
d. neither excludable nor rival in consumption, a tornado siren is a public good.
Ans: D. neither excludable nor rival in consumption, a tornado siren is a public good.
7). Rival in consumption?
yes no
excludable? yes a b
no c d
refer to figure 11-1. for which two boxes is it the case that externalities arise because
something of value has no price attached to it?
a. box a and box c
b. box c and box d
c. box a and box b
d. box b and box d
Ans: B. Box C and Box D
8). When a free-rider problem exists,
a. the market will devote too few resources to the production of the good.
b. the cost of the good will always be more than the benefit of the good.
c. the good will not be produced.
d. entrepreneurs will eventually find a way to make free-riders pay their share.
Ans: A. the market will devote too few resources to the production of the good.
9). Mike miller is the town manager of medfield, a town with 50,000 residents. at a recent town
meeting, several citizens proposed building a large public swimming pool in the center of
town for all of the residents to enjoy. a survey of all 50,000 residents revealed that the pool
would be worth $50 to each of them. because the cost to build the swimming pool is only
$1,000,000, manager miller arranges to have the pool built. everyone in town enjoys the
pool, but when manager miller asks for donations to pay for the pool, he only collects
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