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16. ECO1050 u08q1 Question 16 (Points: 3) Which of the following are devices tha

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Question

16. ECO1050 u08q1 Question 16 (Points: 3)
Which of the following are devices that the government uses to achieve a more efficient allocation of resources in the presence of external benefits? (3 points).



1. Taxes, subsidies, and regulation.

2. Vouchers, patents, and private subsidies.

3. Patents, taxes, and subsidies.

4. Regulations, copyrights, and vouchers.

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17. ECO1050 u08q1 Question 17 (Points: 3)
If we compare the use of public provision to private subsidy for the provision of education, what do we see? (3 points).



1. Public provision is unambiguously more efficient.

2. Private subsidies are always more efficient.

3. Both raise the cost for the consumer who receives the direct benefits.

4. Both lower the cost for the consumer and increase the availability.

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18. ECO1050 u08q1 Question 18 (Points: 3)
Which of the following about a government subsidy is correct? (3 points).



1. It decreases a firm's marginal cost.

2. It can help achieve an efficient amount of output when the good has an external benefit.

3. It increases a consumer's marginal benefit.

4. Both answers A and B are correct.

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19. ECO1050 u08q1 Question 19 (Points: 3)


The figure above shows the market for education, a good possessing an external benefit. In order to attain the efficient number of students, what must a government subsidy equal per student? (3 points).





1. $2,000.

2. $6,000.

3. $4,000.

4. $10,000.

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20. ECO1050 u08q1 Question 20 (Points: 3)
Education has an external benefit. To achieve the efficient level of education, an education voucher must equal the difference between what? (3 points).



1. The marginal cost and the marginal social benefit.

2. The dollar price and the efficient market equilibrium.

3. The marginal benefit and the marginal social benefit.

4. The dollar price and marginal cost.

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21. ECO1050 u08q1 Question 21 (Points: 3)
If a situation in which a previously ignored external benefit is overcome by the use of vouchers, which of the following is true? (3 points).



1. The demand curve will shift to the right.

2. The demand curve will shift to the left.

3. The supply curve will shift to the right.

4. The supply curve will shift to the left.

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22. ECO1050 u08q1 Question 22 (Points: 3)
Which of the following is true when people decide whether or not to get a flu vaccination? (3 points).



1. They may ignore the private cost and, as a result, too many vaccinations are given.

2. They may ignore the marginal private benefit and, as a result, too few vaccinations are given.

3. They may ignore the external benefit and, as a result, too few vaccinations are given.

4. They may ignore the marginal external cost and, as a result, vouchers must be provided.

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23. ECO1050 u08q1 Question 23 (Points: 2)
Which of the following goods is nonexcludable? (2 points).



1. A college education.

2. Pay-per-view television.

3. A lighthouse.

4. A restaurant meal.

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24. ECO1050 u08q1 Question 24 (Points: 2)
What is an office in the Empire State Building? (2 points).



1. Rival—only a certain number of people can use it at the same time.

2. A private good.

3. Excludable—it is possible to restrict access to it.

4. All of the above answers are correct.

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25. ECO1050 u08q1 Question 25 (Points: 2)
What is the free-rider problem caused by? (2 points).



1. Private goods or services that cause some people to want to take them for free.

2. Public goods that people cannot be excluded from consuming even if they do not pay for them.

3. Goods or services that are excludable and cause envy for those who do not have them.

4. Goods or services that are rival and leave some people without them.

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26. ECO1050 u08q1 Question 26 (Points: 3)
How do we determine the economy's marginal benefit curve for a public good or service? (3 points).



1. By dividing the sum of the marginal benefits of each member of society by the number of people in society.

2. By vertically summing the individual marginal benefit curves of each member of society.

3. By horizontally summing the individual marginal benefits curves of each member of society.

4. By multiplying the marginal benefits of each member of society.

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27. ECO1050 u08q1 Question 27 (Points: 3)
Consider the market for national defense. When there is a free-rider problem, which of the following is true regarding achievement of the efficient market outcome? (3 points).



1. A private firm can provide national defense because it is a private good.

2. The government can provide national defense because it is a public good.

3. The government can provide national defense because it is a private good.

4. None of the above answers is correct.

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28. ECO1050 u08q1 Question 28 (Points: 3)


Paul and Paula are the only members of society. The table above gives their marginal benefits from missile gunboats, a public good. Determine the marginal benefit to society of the second missile gunboat. (3 points).





1. $16 million.

2. $12 million.

3. $8 million.

4. $10 million.

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