Question :
51.Ifeveryonebenefitsfromhelpingthepoor,
a.governmentinterventioncannotimprovesocialwell-being.
b.eliminatingtaxesaimedatredistributingincomewillmakerichpeoplebetteroff.
c.t : 1261433
51.Ifeveryonebenefitsfromhelpingthepoor,
a.governmentinterventioncannotimprovesocialwell-being.
b.eliminatingtaxesaimedatredistributingincomewillmakerichpeoplebetteroff.
c.taxingthewealthytoraiselivingstandardsofthepoorcanpotentiallymakeeveryonebetteroff.
d.privatemarketscanadequatelyprovidecharityprogramstohelpthepoor,despitefree-riderproblems.
52.Whichofthefollowingisadisadvantageofgovernmentprovisionofapublicgood?
a.Thegovernmentlacksinformationaboutwhatpeoplearewillingtopayforthegood.
b.Thegovernmentdoesnotprovideenoughofanypublicgood.
c.Theprivatesectorcanprovideallpublicgoodsatalowercost.
d.Noneoftheaboveisadisadvantage.
53.Whichofthe followingisnotacharacteristicofapublicgood?
a.Itisnotexcludable.
b.Itisnotdiminishedordepreciatedasadditionalpeopleconsumethegood.
c.Itsbenefitscannotbewithheldfromanyone.
d.Becauseitisafreegood,thereisnoopportunitycost.
54.Toachievetheoptimalprovisionofpublicgoods,the
a.marketshouldbeallowedtoarriveatanequilibriumwithoutgovernmentintervention.
b.governmentmustlimittheprovisionofthegoods.
c.governmentmusttaxproducersofthegoods.
d.governmentmusteitherprovidethegoodsorsubsidizetheirproduction.
55.Producershavelittleincentivetoproduceapublicgoodbecause
a.thesocialbenefitislessthantheprivatebenefit.
b.thesocialbenefitislessthanthesocialcost.
c.thereisafree-riderproblem.
d.thereisaTragedyoftheCommons.
56.Thegovernmentprovidespublicgoodsbecause
a.privatemarketsareincapableofproducingthesetypesofgoods.
b.free-ridersmakeitdifficultforprivatemarketstosupplythesociallyoptimalquantity.
c.marketsarealwaysbetteroffwithsomegovernmentoversight.
d.externalbenefitswillaccruetoprivateproducers.
57.Toofewresourcesaredevotedtothecreationofknowledgebecauseprofit-seekingfirms
a.undervalueknowledgeintheirpursuitofrevenues.
b.overusetheirpatents.
c.tendtofree-rideontheknowledgethatothershavedeveloped.
d.tendtorelyonexistingemployeeknowledge.
58.Aswithmanypublicgoods,determiningtheappropriatelevelofgovernmentsupportfortheproductionofgeneralknowledgeisdifficultbecause
a.patentscorrectforanunknownportionoftheexternality.
b.benefitsarehardtomeasure.
c.membersofCongressareoftenexpertsinthesciences.
d.thecostsalwaysexceedthebenefits.
59.Whichofthefollowingisadisadvantageofgovernmentprovisionofapublicgoodsuchasnationaldefense?
a.(i)only
b.(i)and(ii)only
c.(i)and(iii)only
d.(i),(ii),and(iii)
60.Theprivately-ownedschoolsysteminSmalltownhasavirtuallyunlimitedcapacity.Itacceptsallapplicantsandoperatesonbothtuitionandprivatedonations.Althougheveryresidentplacesvalueonhavinganeducatedcommunity,theschool’srevenueshavesufferedlatelyduetoalargedeclineinprivatedonationsfromtheelderlypopulation.Sincethebenefitthateachcitizenreceivesfromhavinganeducatedcommunityisapublicgood,whichof thefollowingwouldnotbecorrect?
a.Thefree-riderproblemcausestheprivatemarkettoundersupplyeducationtothecommunity.
b.Thegovernmentcanpotentiallyhelpthemarketreachasociallyoptimallevelofeducation.
c.Ataxincreasetopayforeducationcouldpotentiallymakethecommunitybetteroff.
d.Theprivatemarketisthebestwaytosupplyeducation.
Table11-1
ConsiderthetownofSpringfieldwithonlythreeresidents,Sophia,Amber,andCedric.Thethreeresidentsaretryingtodeterminehowlarge,inacres,theyshouldbuildthepublicpark.Thetablebelowshowseachresident’swillingnesstopayforeachacreofthepark.
Acres
Sophia
Amber
Cedric
1
$10
$24
$6
2
8
18
5
3
6
14
4
4
3
8
3
5
1
6
2
6
0
4
1
7
0
2
0