Define public goods whose benefits are less than their costs

Reference no: EM13188340

1.Sometimes, public goods whose benefits are less than their costs still get produced because:
a)Of market failures
b)Of externalities in production
c)The marginal benefit is still larger than the marginal cost
d)The benefits accrue to politically powerful government officials and their constituents

2. (Consider This) According to the Coase theorem:government should levy excise taxes on firms that generate spillover or external costs.
a)private individuals can often negotiate their own resolution of externality
B)problems, without the need for government intervention
c) private firms should not provide public goods.
d) taxes should be levied such that they change private behavior as little as possible.

3. At the optimal quantity of a public good:

a)marginal benefit equals marginal cost.

b)marginal benefit exceeds marginal cost by the greatest amount.

c)marginal benefit is zero.

d)total benefit equals total cost.

4) (Consider This) Suppose that a large tree on Betty's property is blocking Chuck's view of the lake below. Betty accepts Chuck's offer to pay Betty $100 for the right to cut down the tree. This situation describes:

a-nonrivalry and nonexcludability.

b-the Coase theorem.

c-the optimal allocation of a public good.

d-a market for externality rights.

5) A public good:

a-Costs essentially nothing to produce and thus is provided by the government at a zero price
b-Can never be provided by a nongovernmental organization

c-Generally results in substantial negative externalities

d-Can't be provided to one person without making it available to others as well

6) The minimum acceptable price for a product that producer Sam is willing to receive is $15. It is $12 for producer Sue. The market price they could get for the product is $18. What is the amount of the producer surplus for Sam and Sue combined?

a-$27
b-$18
c-$9

d-$6

Reference no: EM13188340

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