The owner of a good has the right to decide how that good is used and to restric

Question

The owner of a good has the right to decide how that good is used and to restrict others from using that good. This idea is known as: a. the principle of mutual excludability. b. the principle of comparative advantage c. the principle of public ownership. d. the principle of negative externalities. e. the law of demand 12. 13. A good that is both excludable and rivalrous is a(n): a. public good b. club good. c. private good. d. inferior good. e. necessary good. 14. The free-rider problem occurs because: it is easy to exclude others from consuming the good. consumption is rivalrous, so that the consumption of a product by one individual diminishes that available for others. exclusion is costly or impossible, so that a consumer or producer can use the good without having to pay for it. costs are imposed on others not directly involved in the transaction. individuals are not required to pay for those goods which do not yield any utility to them. a. b. c. d. e. 15. Why do market failures arise in case of public goods? a. The quantity produced is much more than is actually required by the people. b. The quality of these goods are not good enough. c. The quantity produced is too less from the society's point of view. d. The government wastes a lot of resources for producing a public good e. The users of such goods are required to pay a high price for these goods 16. When economic activity imposes costs on others not directly involved in the transaction: a. a negative externality exists. b. a positive externality exists. c. then the market, will produce too little of the good. d. the tragedy of commons problem arises. e. a free rider problem arises _17. Why do externalities arise? The costs of production are not borne by the producer An economic activity imposes a burden on them who are not directly involved in it An economic activity imposes a cost on them who are directly involved in it The government produces such goods and services which are consumed by onlya particular class of people Goods of mass consumption are not produced as they do not yield profit for the producers a. b. c. d. e.

Explanation / Answer

12. (a) the princlepal of mutual excludability

13. (c) private goods

14. (d) cost are imposed on others not directly involved in the transaction

15. (c) the quantity produced is to less from the socity's point of view

16. (e) a free rider problem arise

17. (b) an economic activity impose a burden on them who are not directly involved in it

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.