Principles of Economics 5th Edition By N. Gregory Mankiw – Test Bank

Principles of Economics 5th Edition By N. Gregory Mankiw – Test Bank

Chapter 11
Public Goods and Common Resources
TRUE/FALSE
1. When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.
ANS: T DIF: 2 REF: 11-0
NAT: Analytic LOC: Markets, market failure, and externalities
TOP: Market failure MSC: Interpretive
2. Free goods are usually efficiently allocated without government intervention.
ANS: F DIF: 2 REF: 11-0
NAT: Analytic LOC: Markets, market failure, and externalities
TOP: Market failure MSC: Interpretive
3. Most goods in our economy are allocated in markets, where buyers pay for what they receive and sellers are paid for what they provide.
ANS: T DIF: 1 REF: 11-0
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Private goods MSC: Applicative
4. Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.
ANS: F DIF: 2 REF: 11-0
NAT: Analytic LOC: The role of government TOP: Public goods
MSC: Interpretive
5. A good that is excludable but not rival is known as a natural monopoly.
ANS: T DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Natural monopolies MSC: Definitional
6. National Public Radio would be considered a natural monopoly.
ANS: F DIF: 2 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Natural monopolies MSC: Interpretive
7. Concerts in arenas are not excludable because it is virtually impossible to prevent someone from seeing the show.
ANS: F DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Excludability MSC: Applicative
8. A pair of jeans is rival but non-excludable.
ANS: F DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Excludability | Rivalry in consumption MSC: Applicative
9. A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.
ANS: F DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Excludability | Rivalry in consumption MSC: Definitional
10. Some goods can be classified as either public goods or private goods depending on the circumstances.
ANS: T DIF: 2 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Public goods | Private goods MSC: Interpretive