1. Which of the following is the best example of a public good?
A. Highway system
B. Shopping mall
C. Country club
D. Movie theater
2. Which of the following is a characteristic of a public good?
A. the private sector could provide it more efficiently
B. it's benefits are greater for government than society
C. it is shared by the public but is provided by the government
D. taxpayers demand that the government provide it
3. Something is generally considered to be a public good if
A. the private sector could provide the service more efficiently
B. the benefits of the good are greater for government than for society
C. the total benefits to society are greater than the total financial costs
D. taxpayers demand that the government provide the service
4. Markets sometimes have shortcomings that governments try to correct by intervening in the economy. Which of the following best describes the outcome of government intervention?
A. government nearly always corrects the shortcoming and improves the economy
B. government hardly ever correct the shortcoming and usually end up making things worse
C. government policies may solve some problems, but not necessarily. Government policies have shortcomings too
D. government can't correct the market's shortcomings. The market always provides the best answer to economic answers
5. An external cost is
A. a cost paid by someone other than the decision-maker who incurred it
B. a cost paid by consumers for the costs associated with government regulations
C. a cost paid by government to cover the costs of providing public services
D. a cost paid by either federal or state legislators to discourage unfair trade laws
6. Which of the following best illustrates the concept of an external cost?
A. a business charges customers extras to cover the cost of regulatory compliance
B. a wholesale outlet is charged higher insurance costs because of the store's location
C. a factory pours toxic waste into a nearby stream, causing harm to a nearby town
D. a consumer returns merchandise to a retail store, claiming the goods were defective
7. Sally sold seashells down by the seashore. Sally's supplier sold Sally some phony seashells. Sally's supplier said "Sorry", but refused to refund her the money she paid for the seashells. What role of government would allow Sally to take care of this problem?
A. regulate competition
B. correct for externalities
C. provide a legal structure for commercial disputes
D. provide public goods
1. A
2. C
3. C
4. C
5. B
6. C
7. C
I could use some help trying to figure out if these are right or not
I'm not sure about 5 and 6.
Your other answers are right.
I think 5 would be A because an external cost will affect a third party, so someone else than who made the decision in the first place.
1. To determine the correct answer for question 1, let's first understand what a public good is. A public good is a type of good that is non-excludable and non-rivalrous, meaning that it is available to everyone and one person's consumption of it does not diminish its availability to others.
The best example of a public good among the options given is the highway system (option A). Highways are typically publicly funded and accessible to all without excluding anyone. Additionally, one person's use of the highway does not prevent others from using it. Therefore, option A, the highway system, is the correct answer.
2. Question 2 asks for a characteristic of a public good. Among the given options, the correct characteristic is that it is shared by the public but provided by the government (option C). This reflects the non-excludable nature of public goods, as they are available to all members of the public, but typically provided by the government due to the challenges of private firms providing them.
3. Question 3 tests our understanding of what makes something a public good. The correct criterion for considering something a public good is that the total benefits to society are greater than the total financial costs (option C). Public goods are generally provided by the government because the private sector may have difficulty charging individuals for their use due to their non-excludability.
4. Question 4 asks about the outcome of government intervention to correct market shortcomings. The most accurate answer is that government policies may solve some problems but also have shortcomings (option C). Government intervention is often employed to address market failures and promote economic efficiency, but it is not always a guaranteed solution, as government policies can have their own limitations.
5. An external cost refers to a cost paid by someone other than the decision-maker who incurred it. Therefore, the correct answer for question 5 is option A.
6. Question 6 requires the identification of an example that illustrates the concept of an external cost. Among the options given, the best example is option C, where a factory pours toxic waste into a nearby stream, causing harm to a nearby town. In this case, the cost of the pollution is borne by the people in the town who are affected by it, even though they did not contribute to the decision to pollute the stream.
7. Finally, question 7 asks about the role of government that would help Sally in her dispute with the supplier. The correct role is to provide a legal structure for commercial disputes (option C). This means that the government provides a system of laws and regulations that can be used to resolve conflicts between parties involved in commercial transactions.
Based on the explanations provided, the correct answers are:
1. A
2. C
3. C
4. C
5. A
6. C
7. C