US18L1

  • 1

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    When resources are used inefficiently, ___________ exists.

    monopoly always
    market failure
    resource failure
    perfect competition

  • 2

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    National defense and lighthouses are examples of _____________.

    government goods
    public goods
    nonexcludable and rival goods
    monopoly goods

  • 3

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    Food is an example of a _______ good.

    nonrival and excludable
    rival and excludable
    nonrival and nonexcludable
    rival and nonexcludable

  • 4

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    Public goods create a free-rider problem because the quantity of the good that a person consumes ___________________.

    increases as that person pays more
    does not depend on the amount that the person pays
    decreases as that person pays more
    increases as that person pays less

  • 5

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    When people decorate the exteriors of their homes with colored lights, they create _________ and motorists who pass by receive a benefit.

    an excludable good
    an externality
    a public good
    a competitive good

  • 6

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    In economic models of public choice, _______ maximize their utility by _______.

    voters; demanding a constant tax rate
    bureaucrats; maximizing their agency's budget
    politicians; accepting campaign contributions
    politicians; debating government policies

  • 7

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    When all choices made by voters, politicians, and bureaucrats are compatible and no group can improve its position by making a different choice, there is a _________________.

    government equilibrium
    political equilibrium
    law-making marketplace
    majority government

  • 8

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    Marginal benefit is the _______ of a public good.

    benefit resulting from an increase in the quantity
    increase in total benefit resulting from a one-unit increase in the quantity
    sum of each individuals benefit
    difference between the total benefit and total cost

  • 9

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    If every new car that is produced has an AM-FM radio and CD player, then the auto makers are

    appealing to a younger market
    encouraging rational ignorance among purchasers
    trying to increase net benefit
    practicing the principle of minimum differentiation

  • 10

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    Rational ignorance is the decision not to acquire information because _____________________.

    ignorance is bliss
    gathering information is too time consuming
    only lobbyists are well-informed
    the cost of acquiring the information is greater than the expected benefit

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