Question

28- Public goods create a free-rider problem because only people who pay for the good or...

28-

Public goods create a free-rider problem because

only people who pay for the good or service can enjoy the good or service.
the good or service is rival in nature.
the good or service is excludable.

people can enjoy the good or service no matter whether or not they pay for it.

29-

For which type of good is it necessary to sum the marginal benefit curves vertically in order to obtain the economy's marginal benefit curve?

public goods
mixed goods
private goods

common resources

30-

A private, competitive market

provides the efficient quantity of a public good.
allocates too few resources for a public good.
allocates too many resources for a public good.

can be relied upon to allocate resources efficiently both for private and public goods.

5-

The demand curve is also the

total cost curve.
total benefit curve.
marginal cost curve.

marginal benefit curve.

3-

You are more sensitive to a change in price if you

spend a lot of your income on the good.
spend a small percentage of your income on the good.
buy very little of the good.

do not buy the good regularly

2-

If the demand for a good is elastic, then

people do not change the quantity they demand when the price of the good changes.
a change in price leads to a smaller percentage change in the quantity demanded.
people substantially decrease the quantity of the good they buy if its price increases by a small percentage.
a change in the quantity demanded is smaller than the change in price.

1-

The price elasticity of demand measures the extent to which the quantity demanded changes when

the price of the good changes.
the price of a related good changes.
the expected future price of a good changes.
consumer preferences change.
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Answer #1

28) The correct answer is option d) because under free ridership the consumer uses the good without paying for the good.

29) The correct answer is option a) I.e. public goods because for public good aggregate demand is calculated by adding the individual demand vertically.

30) The correct answer is option c) because the private competitive market equates where MB is equal to the marginal private cost.

5) The correct answer is option d)

* We are supposed to do only four MCQ's. For solution to other questions please post separately.

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