MyLab Economics with Pearson eText -- Access Card -- for Foundations of Economics
8th Edition
ISBN: 9780134518312
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 11, Problem 3MCQ
To determine
To choose:
The correct option stating the exact definition of marginal social benefit.
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Roommates D, E and F can buy paintings at $30 each for their dorms. Marginal benefits are MB of D = 100 - 2Q, MB of E = 200 - Q, MB of F = 300 - 2Q.
a. What are the 2 properties of a public good?
b. Explain the Free Rider problem.
c. Aggregate the demand curves(vertical sum).
d. Why are there kinks in the market demand curve?
e. Calculate and illustrate the optimal quantity for this good?
f. How should the costs of purchasing this quantity be allocated between the buyers?
If the social cost of producing a good is higher than the private cost then: *
a.The price of the good or service is too high
b.The good or service is a public good
c.The production of the good or service should be subsidized
d.The price of the good or service is too low
Market failure occurs when the private sector fails to distribute our resources efficiently through the pricing system. Externalities and a lack of public goods and services are two examples of market failure.Give an example of a positive and a negative externalities that someone faces in their life. Also, what are some public goods and services that you utilize in your everyday life?
Chapter 11 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Foundations of Economics
Ch. 11 - Prob. 1SPPACh. 11 - Prob. 2SPPACh. 11 - Prob. 3SPPACh. 11 - Prob. 4SPPACh. 11 - Prob. 5SPPACh. 11 - Prob. 6SPPACh. 11 - Prob. 7SPPACh. 11 - Prob. 8SPPACh. 11 - Prob. 9SPPACh. 11 - Prob. 10SPPA
Ch. 11 - Prob. 1IAPACh. 11 - Prob. 2IAPACh. 11 - Prob. 3IAPACh. 11 - Prob. 4IAPACh. 11 - Prob. 5IAPACh. 11 - Prob. 6IAPACh. 11 - Prob. 7IAPACh. 11 - Prob. 8IAPACh. 11 - Prob. 9IAPACh. 11 - Prob. 1MCQCh. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - A renewable common resource is used sustainably if...Ch. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - When ITQs are assigned, the market price of an ITQ...
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- (Optimal Provision of Public Goods) Using at least two individual consumers, show how the market demand curve is derived from individual demand curves (a) for a private good and (b) for a public good. Once you have derived the market demand curve in each case, introduce a market supply curve and then show the optimal level of production.arrow_forwardExplain what public goods are, and why public goods are provided by the government, using terms and details from thearrow_forwardNegative Externalities are:A. External BenefitsB. Non-excludableC. External CostsD. Non-Rivalous What term was coined by Adam Smith and is a metaphor for an economic guidance system that leads to desirable economic outcomes? A. Competition B. Price mechanism C. Capitalism D. "The invisible hand" What are the two characteristics of a public good? (Choose 2)A. External CostB. Non excludableC. External BenefitD. Non-Rivalousarrow_forward
- Give an example of a public good and how the free rider problem emanates from it.arrow_forwardWhen people decide to buy cars, they have to decide between fuel economy and other features. It is argued that there is a "public good" issue involved in this decision. Why might that be? How the existence of public-good characteristics affect the price of the car? Include in your answer a good definition of a public good and free riders. Be complete and use the language of economics.arrow_forwardThe government must provide public goods such as national defense because a. the production of public goods requires economies of scale that the private sector cannot achieve b. t is generally impossible to exclude individuals who value public goods but do not pay for them c. public goods cannot be produced in private competitive markets, since they have highly inelastic demand d. private producers charge a price that is substantially greater than marginal cost e. no single individual should have to pay for public goods, since they benefit society as a wholearrow_forward
- What examples do you have of public goods? What is the free-rider problem?arrow_forwardIdentify the characteristics of a public good. a. Why do public goods exist? b. What is the problem that comes about due to public goods? c. Which of the following are public goods: parks, police services, welfare payments to the poor, production of energy, space exploration? d. Briefly describe how the free rider problem can be overcome. e. Briefly explain why markets often have a difficult time producing public goods.arrow_forwardJust answer true or false 1. Mining has negative externalities 2. The social cost of putting up a dam is reduced if the government ensures that the communities adversely affected are relocated in another area with sustainable sources of livelihood 3. Fireworks display during Christmas sponsored by an agency has both positive and negative externalities. 4. When a public space has been enclosed for a concert and people can only get in by buying tickets, the public space is no longer a public good that is non-rival and non-exclusive.arrow_forward
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