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public goods MCQs

Practise focused public goods questions with marked answers for exam preparation and subject revision.

public goods Mcqs

1. A private good is ?
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A. rival but not excludable

B. not rival but excludable

C. both rival excludable

D. neither rival nor excludable

2. A positive externality affects market efficiency in a manner similar to a ?
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A. rival good

B. public good

C. common resource

D. private good

3. Which of the following are potential solutions to the problem of air pollution?
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A. Grant right of the clean air to citizens so that firms must purchase the right to pollute

B. all of these answers

C. Auctions off pollution permits.

D. Regulate the amount of pollutants that firms can put in the air

4. If one persons consumption of a good diminishes other peoples use of the good, the good is said to be ?
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A. a good produced by a natural monopoly

B. a common resource

C. excludable

D. rival

5. A common resource is ?
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A. not rival but excludable

B. both rival and excludable

C. rival but not excludable

D. neither rival nor excludable

6. Public goods are difficult for a private market to provide due to ?
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A. The free-rider problem.

B. the rivalness problem

C. the public goods problem

D. the Tragedy of the Commons.

7. Suppose each of 20 neighbours on street values street repairs at 3000 the cost of the street repair is 40,000 which of the following statements is true ?
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A. It is efficient for each neighbour to pay 3,000 to repair the section of street in front of his/her home

B. None of these answers are true

C. it is not efficient to have the street repaired

D. it is efficient for the government to tax the resident 2,000 each and repair the road

8. If a person can be prevented from using a good, the good is said to be ?
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A. a public goods

B. a common resource

C. rival

D. excludable

9. A person who regularly watches BBC television programs in the UK but fails to pay their TV licence fee is known as ?
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A. a costly rider

B. excess baggage

C. a common resource

D. an unwelcome rider

E. a free rider

10. Which of the following is an example of a public good ?
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A. Whales in the ocean

B. apples on a tree in a public park

C. national defense

D. hot dogs at a picnic

11. A free rider is a person who ?
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A. receives the benefits of a good but avoids paying for it.

B. fails to produce goods but is allowed to consume goods.

C. pays for a good but fails to receive any benefit from the good

D. produces a good but fails to receive payment for the good

12. The Tragedy of the Commons is a parable that illustrates why?
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A. private goods are under consumed

B. public goods are underproduced

C. natural monopolies overproduce goods.

D. common resources are overconsumed

13. A negative externality affect market efficiency in a manner similar to ?
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A. a private good

B. a common resource

C. an excludable good.

D. a public good.

14. When markets fail to allocate resources efficiently, the ultimate source of the problem is usually ?
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A. that prices are not high enough, so people overconsume

B. government regulation

C. that property rights have not been well established

D. that prices are not low enough so firms over produce

15. A good produced by a natural monopoly is ?
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A. rival but not excludable

B. neither rival nor excludable

C. not rival but excludable

D. both rival and excludable

16. When government employ cost-benefit analysis to help them decide whether to provide a public good, measuring benefits is difficult because ?
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A. the benefits are infinite because a public good is not rival and an infinite amount of people can consume it at the same time

B. respondents to naires have little incentive to tell the truth.

C. there are no benefits to the public since a public good is not excludable

D. one can never place a value on human life or the environment

17. A public good is ?
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A. neither rival nor excludable

B. rival but not excludable.

C. both rival but excludable

D. not rival but excludable

18. Which of the following is an example of a common resource ?
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A. a firework displays

B. iron one

C. a national park

D. national defense

19. Suppose that requiring motorcycle riders to wear helmets reduces the probability of a motorcycle fatality from 0.3 percent to 0.2 percent over the lifetime of a motorcycle rider and that the cost of lifetime supply of helmets is Rs5000. It is efficient for the government to require riders to wear helmets if human life is valued at ?
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A. Rs50,000 or more

B. Rs 150 or more

C. Rs 500,000 or more

D. Rs100 or more

E. Rs500 or more

20. A congested toll road is ?
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A. a private good

B. a good produced by a natural monopoly

C. a public good

D. a common resource

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