Question

CThe Role Of Government in the Economy Quick Check

1. What is a public good?
A) A public good is a product or service that one consumer can prevent another consumer from using, and is accessible without payment.
B) A public good is a product or service that one consumer can prevent another consumer from using, and is not accessible without payment.
C) A public good is a product or service that one consumer cannot prevent another consumer from using, and is not accessible without payment.
D) A public good is a product or service that one consumer cannot prevent another consumer from using, and is accessible without payment.

2. What is the negative externality?
A) Negative externalities occur when the social cost of a good or service is lower than the private cost.
B) Negative externalities occur when the social cost of a good or service is higher than the private cost.
C) Negative externalities are goods or services that one consumer can limit another consumer's use of.
D) Negative externalities are goods or services that are subject to the free-rider problem.

3. What is a positive externality?
A) Positive externalities occur when there is both a social benefit and private benefit from a good or service.
B) Positive externalities occur whenever there is a social benefit to a good or service.
C) Positive externalities occur when a service is available without cost.
D) Positive externalities occur whenever there is a private benefit to a good or service.

4. What does excludability mean for goods and services?
A) An excludable good or service's availability to one consumer can be affected by another consumer.
B) An excludable good or service's availability is dependent on payment.
C) The good or service has a higher social cost than the private cost.
D) The good or service is subject to the free-rider problem.

5. Why does the government need to handle market failures?
A) The natural forces of a free market tend to overcorrect for market failures.
B) Market failures occur when goods or services are excludable.
C) Market failures indicate a scarcity of resources, so it must be managed.
D) The natural forces of a free market do not tend to fix market failures.

Answer 1

Answers:

What is a public good?

A public good is a product or service that one consumer cannot prevent another consumer from using, and is accessible without payment.

What is a negative externality?

Negative externalities occur when the social cost of a good or service is higher than the private cost.

What is a positive externality?

Positive externalities occur when there is both a social benefit and private benefit from a good or service.

What does excludability mean for goods and services?

An excludable good or service's availability is dependent on payment.

Why does the government need to handle market failures?

The natural forces of a free market do not tend to fix market failures.

Hope this helps! Have a wonderful day! :)