Question : 31) A fireworks show has been arranged in a park. : 1377440

 

31) A fireworks show has been arranged in a park. The ticket for the show is $5 but only 40% of the tickets get sold as spectators can watch the show without entering the park. This is an example of ________.

A) the free-rider problem

B) the paradox of thrift

C) the paradox of plenty

D) the tragedy of the commons

32) The citizens of a country often refuse to pay voluntarily for defense spending because ________.

A) national defense is a common pool resource

B) nobody can be excluded from being defended by the state

C) all citizens do not derive equal satisfaction from national defense

D) national defense is rival in consumption

33) Alex is a non-union employee in a factory. If the union negotiates certain benefits for the employees, Alex enjoys all the benefits although he does not pay the union fee. His behavior is an example of ________.

A) rent-seeking

B) free-riding

C) profit maximizing

D) rivalry

34) Five players are given $10 each and asked to contribute any portion of it to a group account. They are also told that the total collection will be doubled and distributed equally among each of them. In this case, the players are likely to contribute ________.

A) $5 each

B) $10 each

C) $1 each

D) nothing

35) A video available on a website that allows free download is a ________.

A) private good

B) public good

C) club good

D) common pool resource

36) The government should provide one more unit of a public good if ________.

A) the marginal benefits equal the marginal costs of providing the additional unit

B) the marginal cost of providing the next unit exceeds the marginal benefits

C) the marginal benefits exceed the marginal costs of providing the next unit

D) the marginal costs of providing the next unit equal the average cost of providing the next unit

37) Suppose there are 3 houses in a locality. The residents are considering installing street lights and are trying to determine how many lights need to be installed. Each resident’s willingness to pay for street lights is given in the table below.

 

Number of street lights

House 1

House 2

House 3

1

$300

$400

$200

2

$280

$360

$160

3

$240

$300

$120

4

$180

$220

$100

5

$80

$100

$10

If the cost of installing one light is $500, how many lights will be installed?

A) 1

B) 2

C) 4

D) 5

38) Which of the following is true?

A) The market demand curve for a public good has a positive slope.

B) The market demand curve for a private good has a positive slope.

C) The market demand curve for a public good is arrived at by the horizontal sum of individual demand curves.

D) The market demand curve for a public good is arrived at by the vertical sum of individual demand curves.

39) Tom is willing to contribute $400 toward building a public park , Jack is willing to contribute $500, and Joe is willing to contribute $750. What is the total marginal value for the park if Tom, Jack, and Joe are the only residents in the locality where the park is being built?

A) $1,650

B) $1,050

C) $3,300

D) $2,350

40) The total willingness to pay for public rest rooms in a city is given in the table below:

 

Number of rest rooms

Total willingness to pay

1

$208,000

2

$199,000

3

$150,000

4

$85,000

A) 1

B) 2

C) 3

D) 4