Question :
11) In economics, the term “free rider” refers to
A) : 1387509
11) In economics, the term “free rider” refers to
A) a person who evades taxes.
B) a supervisor who delegates menial time-consuming activities to others.
C) one who volunteers her services.
D) one who waits for others to produce a good and then enjoys its benefits without paying for it.
12) The demand curve for a public good is also called the
A) total welfare curve.
B) marginal social benefit curve.
C) total social benefit curve.
D) total willingness-to-pay curve.
13) How does the construction of a market demand curve for a private good differ from that for a public good?
A) There is no difference; in both cases the demand curve is determined by adding up the price each consumer is willing to pay for each quantity of the good.
B) There is no difference; in both cases the demand curve is determined by adding up the quantities demanded by each consumer at each price.
C) The market demand curve for a private good is determined by adding up the quantities demanded by each consumer at each price, but the market demand curve for a public good is determined by adding up the price each consumer is willing to pay for each quantity of the good.
D) The market demand curve for a private good is determined by adding up the price each consumer is willing to pay for each quantity of the good, but the market demand curve for a public good is determined by adding up the quantities demanded by each consumer at each price.
14) The market demand for a public good can be determined by
A) adding up the total private benefits and external benefits that each quantity provides the citizens of a country.
B) adding up how much each citizen expects to consume at each possible price.
C) adding up how much each consumer is willing to pay for each unit of the public good.
D) estimating the value of the benefit that each unit provides and multiplying that by the number of consumers.
15) One difference between the demand for a private good and that for a public good is that
A) with a private good, each consumer chooses the quantity she wants to consume but with a public good, each consumer chooses the price she is willing to pay for a fixed quantity.
B) with a private good, each consumer chooses the quantity she wants to consume but with a public good, everyone consumes the same quantity.
C) with a private good, each consumer receives different amounts of benefit from consuming the product but with a public good, every consumer realizes the same amount of benefit from consuming the product.
D) the marginal benefit from consuming the last unit of a public good always exceeds the marginal benefit from consuming the last unit of a private good because there are externalities in the consumption of the former.
16) For certain public projects such as building a dam on a river or a bridge to an island, what procedure is a government likely to use to determine what quantity of a public good should be supplied?
A) It conducts public surveys to determine if consumers want the product.
B) It hires economists to estimate the market demand for the product.
C) It takes a vote in Congress.
D) It evaluates the costs and benefits of producing the good.
17) For-profit producers will produce only private goods because
A) markets exist for private goods but not for public goods.
B) the cost of production can be easily determined.
C) buyers will be willing to pay for the goods since the benefits are excludable.
D) all external benefits can be internalized using market prices.
18) Private producers have no incentive to provide public goods because
A) the government subsidy granted is usually insufficient to enable private producers to make a profit.
B) production of huge quantities of public goods entails huge fixed costs.
C) they cannot avoid the tragedy of the commons.
D) once produced, it will not be possible to exclude those who do not pay for the good.
19) Sefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service. The value of the service to each of them is $50 and it costs $80 to hire a housecleaner. Should they hire a housecleaner?
A) Yes, if each contributes $50, then each stands to gain a consumer surplus.
B) No, because each will wait for the other to hire the housecleaner.
C) Yes, but only if a housecleaner will accept $50 so that each can take turns to pay the housecleaner.
D) No, because it will be difficult for them to agree on which housecleaning service to use.
20) Sefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service. The value of the service to each of them is $50 and it costs $80 to hire a housecleaner. Suppose Bella is lazy and a spendthrift and Sefronia suspects that Bella will be willing to pay $80. What is Sefronia likely to do, given that she is as rational as any other person?
A) She will correctly rationalize that Bella’s laziness and spendthrift ways are irrelevant to the decision at hand.
B) She might claim that she is not willing to pay for a housecleaner, hoping that Bella would pay the entire $80.
C) She might offer to do Bella’s housecleaning chores if Bella would pay her $50.
D) She will come clean and tell Bella that since Bella is lazy and a spendthrift she should pay a bigger share of the $80.
