Public Goods and Public Choices

2. 10 Public Goods and Public Choices CLICKER QUESTIONS

3. Checkpoint 10.2 Checkpoint 10.3 Checkpoint 10.1 Question 7 Question 1 Question 4 Question 8 Question 2 Question 5 Question 9 Question 6 Question 3 Question 10

4. CHECKPOINT 10.1 Question 1 A public good ___________. • can only be consumed by one person at a time • can be consumed simultaneously by many people • is any good provided by a company owned by a member of the public • is any good provided by government • is both rival and excludable

5. CHECKPOINT 10.1 Question 2 Which of the following items best describes an externality? • something that is external to the economy • a tax on a good in addition to the market price • an effect of a transaction felt by someone other than the consumer or producer • anything produced in another country • a change from what is normal

6. CHECKPOINT 10.1 Question 3 Which of the following is the best example of a mixed good with external costs? • national defense • a Ford Thunderbird • Yosemite national park • logging in the Amazon basin • Internet

7. CHECKPOINT 10.2 Question 4 The marginal benefit of a public good is the ___________. • average of the marginal benefits of all the people in the economy at each quantity of the good • marginal benefit of the person who places the lowest value on the good, multiplied by the number of people in the economy • marginal benefit of the person who places the highest value on the good, multiplied by the number of people in the economy • benefit of the last person’s consumption • sum of the marginal benefits of all the people in the economy at each quantity

8. CHECKPOINT 10.2 Question 5 The efficient quantity of a public good is ________. • the quantity that private firms produce • the quantity at which the marginal benefit from the good equals the marginal cost of producing it • impossible to determine because each person’s marginal benefit is different • the quantity at which the marginal benefit exceeds the marginal cost by the largest possible amount • where the quantity demanded of the good equals the quantity supplied of the good

9. CHECKPOINT 10.2 Question 6 Government bureaucracies overprovide public goods because of their goal of _____ combined with the _____ of the voters. • budget maximization; irrational exuberance • budget minimization; irrational intelligence • budget maximization; minimum differentiation • budget maximization; rational ignorance • minimum differentiation; budget maximization

10. CHECKPOINT 10.3 Question 7 Suppose that a service creates an external benefit. If the market for the service is unregulated, the _______. • quantity of the service produced exceeds than the efficient quantity • price of the service is too high for the market to be efficient • quantity of the service produced is less than the efficient quantity • producer’s marginal cost is less than the marginal social cost • government might impose a tax to help make the market outcome more efficient

11. CHECKPOINT 10.3 Question 8 The figure shows the market for flu vaccinations. The quantity of vaccinations is ____ a year, and the deadweight loss is ______. • 100 million; $187.5 • 50 million; $250 million • 75 million; $0 • 100 million; $250 million • 75 million; $187.5 million

12. CHECKPOINT 10.3 Question 9 If an external benefit is present, then the _______. • marginal private benefit exceeds the marginal private cost • marginal social benefit exceeds the marginal private benefit • marginal social cost exceeds the marginal private benefit • marginal social benefit is equal to the marginal social cost • marginal social benefit equals the marginal private benefit

13. CHECKPOINT 10.3 Question 10 The figure shows the market for flu vaccinations. The quantity of flu vaccinations will be efficient if the government ____. • offers doctors a $10 subsidy • advertises the benefits • offers people a $10 subsidy • offers people a $20 voucher • offers free flu vaccinations