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Driving a car on crowded highway produces
a negative externality.
a positive externality.
Apartment dwellers who buy fire alarms or fire extinguishers generate a
A tax equal to the external cost on firms that emit pollutants would
not reduce pollution levels at all.
provide firms with the incentive to increase the level of activity creating the pollution.
provide firms with the incentive to decrease the level of activity creating the pollution.
provide firms with little incentive to search for less environmentally damaging production methods.
What is the free rider problem?
scarcity even when you pay for a good
Reaping all the benefits without contributing
Common goods that don't have a price
none of the above
What is one reason that local law enforcement is considered a public good?
Everyone in the community benefits from it.
Nobody in the community has to pay for it.
Private firms make a profit from producing it.
Individual citizens pay directly for it.
Which of the following is an example of a positive externality resulting from an outdoor band concert?
An elderly woman in her apartment hears a song that she liked as a child.
A pair of endangered birds leave their nest in a nearby tree when the concert starts.
A pizza parlor closes early, because all of its customers are at the concert.
A traffic jam occurs as drivers hunt for parking spots near the concert.
Which of the following explains why a city fireworks display on the Fourth of July is provided as a public good?
Fireworks displays usually take place in a public area.
Fireworks are a scarce resource.
Nonpayers cannot be prevented from seeing the fireworks.
Each consumer pays a fee to see the fireworks.
The part of the economy that involves the transactions of the government.
Someone who would not choose to pay for a certain good or service,but who would get the benefits of it anyway if it were provided as a public good.
The part of the economy that involves the transactions of individuals and businesses.
Is a situation in which the market, on its own, does not distribute resources efficiently.
An Economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume.
An example of a public good is...
all answers are correct
What does non-rival mean?
More than one person can use it
Only one person can use it
There are direct competitors for a product
None of the above
Someone can deny access to a good
Everyone is able to access a good
Multiple people can use something at the same time
Only one person can use something at one time
Public goods are
rival and excludable
non-rival and non-excludable
rival and non-excludable
non-rival and excludable