Question

Question 7 (1 point)

Which of the following statements is true?

a	Examples of public goods include national defense, public music concerts, and outdoor fireworks displays.
b	Quasi-public goods are those that have large positive externalities (or spillover benefits). That is, quasi-public goods not only benefit those who pay for it but also some third party external to the market transaction.
c	The government typically sponsors the provision of quasi-public goods.
d	All of the above.
e	Only a) and b)

Question 8 (1 point)

Which of the following statements is true?

a	Quasi-public goods can be provided through the market system. However, if they were produced just in the private market, they would be underproduced.
b	Examples of quasi-public goods are education, streets, and museums.
c	The government can tax individuals and businesses, but taxes reduce their income and thus their demand for private goods. However, the government can use the tax revenues to increase the production of public goods.
d	All of the above.
e	Only a) and b)

Question 9 (1 point)

Which of the following statements is true?

a	An externality is a cost or benefit accruing to a third party external to the market transaction.
b	Negative externalities occur when a third party is affected by the transaction in a positive way.
c	In a market with positive externalities, the good is “underproduced” because people are willing to pay only for the “private” benefit and not for the “social” benefit, which is greater.
d	All of the above.
e	Only a) and c)

Answer 1

Quasi-public goods are those that have large positive externalities (or spillover benefits). That is, quasi-public goods not only benefit those who pay for it but also some third party external to the market transaction. The government typically sponsors the provision of quasi-public goods. Examples of quasi-public goods are education, streets, and museums.

7. The anwer is d.

8. The answer is D

9. The answer is e

An externality is a cost or benefit accruing to a third party external to the market transaction.