Public Goods: Characteristics, Market Failures, and Government Provision

Question 1

Which of these is a defining trait of a public good?

Accepted Answer

Non-excludable

Answer

Rivalrous consumption

Answer

Provided by private firms

Answer

Generate negative externalities

Question 2

Which of the following is NOT a characteristic of a public good?

Accepted Answer

Privately produced

Answer

Non-excludable

Answer

Non-rivalrous

Answer

Indivisible

Question 3

What is the main reason why the market fails to provide public goods?

Accepted Answer

Lack of profit incentive for private producers

Answer

High demand

Answer

Low supply

Answer

Government intervention

Question 4

Which of the following is NOT a role of government in ensuring the provision of public goods?

Accepted Answer

Privatization of all public services

Answer

Direct provision

Answer

Subsidies to private producers

Answer

Regulation of prices

Question 5

A lighthouse is a classic example of a public good because:

Accepted Answer

It is non-excludable and non-rivalrous.

Answer

It is excludable and rivalrous.

Answer

It is privately provided and rivalrous.

Answer

It is excludable and non-rivalrous.

Question 6

Which of the following goods is both non-excludable and rivalrous?

Accepted Answer

Traffic congestion

Answer

National defense

Answer

Public parks

Answer

Clean air

Question 7

What is the role of externalities in the provision of public goods?

Accepted Answer

Externalities can lead to underprovision or overprovision of public goods.

Answer

Externalities are not relevant to the provision of public goods.

Answer

Externalities only occur in the case of private goods.

Answer

Externalities always lead to efficient provision of public goods.

Question 8

Which of the following is an example of a positive externality associated with public goods?

Accepted Answer

Education

Answer

Pollution

Answer

Traffic congestion

Answer

Crime

Question 9

What is the significance of the free rider problem in the provision of public goods?

Accepted Answer

It can lead to underprovision of public goods.

Answer

It is not a significant issue in the provision of public goods.

Answer

It only occurs in the case of private goods.

Answer

It always leads to efficient provision of public goods.

Question 10

Which characteristic is a defining feature of public goods?

Accepted Answer

Non-rivalry

Answer

Excludability

Answer

Profitability

Answer

Private provision

Question 11

Which of the following is a fundamental characteristic of public goods?

Accepted Answer

Non-excludability and non-rivalry

Answer

Rivalry and non-excludability

Answer

Non-rivalry but excludability

Answer

Excludability and rivalry

Question 12

Market failures in the provision of public goods are often attributed to:

Accepted Answer

Private markets' inability to exclude non-payers effectively

Answer

Low demand for public goods

Answer

High production costs of public goods

Question 13

Which of the following is a primary role of government in the provision of public goods?

Accepted Answer

Correcting market failures

Answer

Eliminating private provision of public goods

Answer

Promoting competition among public goods providers

Answer

Reducing consumer demand for public goods

Question 14

Which of the following scenarios best demonstrates the concept of non-rivalry in the consumption of public goods?

Accepted Answer

Multiple individuals using a public park simultaneously

Answer

购买和消费个人电脑

Answer

观看收费有线电视

Answer

驾驶汽车高速公路

Question 15

Which of the following justifications supports government intervention in the provision of public goods?

Accepted Answer

Positive externalities generated by public goods

Answer

General public demand for public goods

Answer

Negative externalities generated by public goods

Question 16

A limitation of cost-benefit analysis in assessing public goods is:

Accepted Answer

Difficulty in quantifying non-market benefits

Answer

Political bias

Answer

Cost of conducting the analysis

Answer

Accuracy of data used in the analysis

Question 17

The concept of public goods suggests that:

Accepted Answer

Government intervention may be necessary to ensure their provision

Answer

Private markets are always sufficient for the provision of public goods

Answer

Public goods should be priced above their marginal cost

Question 18

Which of the following is an example of a pure public good?

Accepted Answer

National defense

Answer

Education

Answer

Public transportation

Answer

Healthcare

Question 19

Which of the following is a key characteristic of public goods?

Accepted Answer

Non-excludability

Answer

Low price elasticity of supply

Answer

Perfect substitution

Answer

High elasticity of demand

Question 20

Which of the following is a reason why the market often fails to provide public goods efficiently?

Accepted Answer

Non-excludability

Answer

Natural monopolies

Answer

Externalities

Answer

Lack of information

Question 21

Which of the following is an example of a pure public good?

Accepted Answer

National defense

Answer

Healthcare

Answer

Public transportation

Answer

Education

Question 22

Which of the following is a benefit of public goods?

Accepted Answer

They provide benefits to all members of society, regardless of their ability to pay.

Answer

They are always in high demand.

Answer

They are always efficient.

Answer

They are easy to produce.

Question 23

Which of the following is a potential consequence of underprovision of public goods?

Accepted Answer

Market failure

Answer

Increased social welfare

Answer

Higher economic growth

Question 24

Which of the following characteristics is fundamental to the definition of a public good?

Accepted Answer

Non-excludability

Answer

Toll financing

Answer

Excludability

Answer

Rivalrous consumption

Question 25

Why is the free-rider problem a barrier to the efficient provision of public goods through the market?

Accepted Answer

Individuals can benefit from the good without paying for it.

Answer

Private firms lack the incentive to produce the good.

Answer

Demand for the good is too low.

Answer

Production costs are too high.

Question 26

Which of the following is a primary role of government in ensuring the efficient provision of public goods?

Accepted Answer

Correcting market failures

Answer

Regulating private firms

Answer

Maximizing profits

Answer

Providing social welfare programs

Question 27

What economic concept describes the optimal level of provision for a public good?

Accepted Answer

Social optimum

Answer

Market equilibrium

Answer

Pareto efficiency

Answer

Private optimum

Question 28

Which of the following is a potential drawback of government provision of public goods?

Accepted Answer

Inefficiency

Answer

Effectiveness

Answer

Equity

Answer

Transparency

Question 29

What is the term used to describe the situation where a shared resource is overused because individuals act in their own self-interest?

Accepted Answer

Tragedy of the commons

Answer

Prisoner's dilemma

Answer

Free-rider problem

Answer

Market failure

Question 30

Which of the following is an example of a private good?

Accepted Answer

Personal vehicle

Answer

Public park

Answer

Clean air

Answer

National security

Question 31

Identify an example that best illustrates the concept of a public good:

Accepted Answer

National defense

Answer

A chocolate bar

Answer

A private club membership

Answer

A car

Question 32

Why is the market mechanism often ineffective in providing public goods?

Accepted Answer

Non-excludability makes it challenging to charge consumers for their use.

Answer

Lack of government support

Answer

High production costs

Answer

Low demand

Question 33

What is the primary role of the government in ensuring the provision of public goods?

Accepted Answer

To intervene and directly provide or subsidize their production.

Answer

To leave the provision of public goods entirely to the private sector

Answer

To regulate private firms that provide public goods

Answer

To impose taxes on public goods

Question 34

Which of the following is a key benefit of government-provided public goods?

Accepted Answer

Ensuring equitable access to essential services for all citizens

Answer

Promoting economic growth

Answer

Reducing the cost of production

Answer

Preventing private monopolies

Question 35

Identify a potential drawback associated with government provision of public goods:

Accepted Answer

Potential for inefficiency due to lack of market competition

Answer

Transparency

Answer

High quality

Answer

Equity

Question 36

Define the concept of non-rivalry in relation to public goods:

Accepted Answer

One person's consumption of a public good does not diminish its availability for others.

Answer

Public goods are only available to those who can afford them

Answer

Public goods are always in high demand

Question 37

Which of the following statements accurately describes the demand for public goods?

Accepted Answer

It is often challenging to measure precisely due to the non-excludability of public goods.

Answer

It is always lower than the demand for private goods

Answer

It is always higher than the demand for private goods

Answer

It is not affected by the income of consumers

Question 38

What is the term used to describe the overconsumption and depletion of a shared resource due to individual self-interest?

Accepted Answer

Tragedy of the commons

Answer

Government failure

Answer

Market failure

Question 39

Which of the following is a potential solution to address the issue of the tragedy of the commons?

Accepted Answer

Government regulations to limit individual exploitation and promote sustainable use of the resource

Answer

Increased public awareness alone

Answer

Technological advancements to increase resource availability

Answer

Privatization of the resource

Question 40

Identify the defining characteristic of a public good:

Accepted Answer

Non-excludability

Answer

Excludability

Answer

All of the above

Answer

Rivalrous consumption

Question 41

Which market failure is primarily associated with public goods?

Accepted Answer

Underprovision

Answer

Overproduction

Answer

Overconsumption

Answer

Subsidy dependence

Question 42

Select the example that best represents a public good:

Accepted Answer

National defense

Answer

Restaurant meal

Answer

Private car

Answer

Concert ticket

Question 43

Explain the distinction between excludability and non-excludability in the context of public goods:

Accepted Answer

Excludability refers to the ability to prevent non-payers from consuming the good, while non-excludability means it is impossible to do so.

Answer

Excludability refers to the ability to consume the good without paying, while non-excludability means everyone must pay to consume it.

Question 44

Define the 'Tragedy of the Commons'

Accepted Answer

A situation where a commonly owned resource is overused due to individuals acting in self-interest, leading to its depletion or degradation.

Answer

A situation where a privately owned resource is overused because individuals act in their self-interest, leading to depletion or degradation.

Question 45

Identify a key benefit of government provision of public goods:

Accepted Answer

Ensuring equitable access for all, regardless of their ability to pay

Answer

Reducing production costs

Answer

Guaranteed higher quality

Question 46

Which of the following is a potential drawback of government provision of public goods?

Accepted Answer

Increased risk of inefficiency and resource waste

Answer

Exacerbated wealth inequality

Answer

Discouraged innovation

Answer

Reduced economic growth

Question 47

Explain the fundamental difference between public goods and private goods.

Accepted Answer

Public goods are non-excludable and non-rivalrous, while private goods are excludable and rivalrous

Answer

Public goods are non-excludable and rivalrous, while private goods are excludable and non-rivalrous.

Answer

Public goods are excludable and non-rivalrous, while private goods are non-excludable and rivalrous.

Question 48

Describe the role of externalities in the context of public goods provision:

Accepted Answer

Externalities can lead to market failures, resulting in either underprovision or overprovision of public goods.

Answer

Externalities have no impact on the provision of public goods.

Question 49

Which two characteristics define a public good?

Accepted Answer

Non-excludability and non-rivalry

Answer

Excludability and non-rivalry

Answer

Non-excludability and rivalry

Answer

Excludability and rivalry

Question 50

What is a market failure?

Accepted Answer

A situation where the market doesn't produce the optimal amount of a good or service.

Answer

The market produces the right quantity of a good or service, but not at the right price.

Answer

The market produces too much of a good or service.

Question 51

Why do markets typically fail to provide public goods?

Accepted Answer

People can benefit from public goods without paying for them (free riding).

Answer

The cost of providing the good is too high.

Answer

The government prohibits the provision of the good.

Question 52

What is the main role of the government in providing public goods?

Accepted Answer

To ensure public goods are provided by correcting market failures.

Answer

To prevent the private sector from providing public goods.

Answer

To subsidize the production of public goods.

Question 53

Which of these is NOT usually a benefit of government provision of public goods?

Accepted Answer

Higher quality than private provision.

Answer

Free or subsidized access for everyone.

Answer

Preventing market failures.

Question 54

How are public goods and externalities related?

Accepted Answer

Public goods often create positive externalities for others.

Answer

Public goods always create negative externalities.

Answer

Externalities only apply to private goods, not public goods.

Question 55

What is a major criticism of Pigouvian taxes?

Accepted Answer

It can be hard to decide on the right amount of tax to charge.

Answer

It is always effective in fixing negative externalities.

Answer

It only works for fixing positive externalities.