ch. 13 true/false

Question 1

The marginal cost of providing a nonrival good to one more person is zero.

Answer 1

true

Question 2

Cable television is an example of a good that is excludable.

Answer 2

true

Question 3

The two characteristics of a common property good are that it is excludable and rival.

Answer 3

false

Question 4

Private goods are excludable and nonrival.

Answer 4

false

Question 5

Artificially scarce goods are excludable and nonrival.

Answer 5

true

Question 6

Public goods are nonexcludable and nonrival.

Answer 6

true

Question 7

A characteristic of all public goods is that they suffer from congestion.

Answer 7

false

Question 8

Common property resources are nonexcludable and rival.

Answer 8

true

Question 9

An example of a common property resource is a tennis court available for public use.

Answer 9

true

Question 10

An example of an artificially scarce good is seats in a mostly empty movie theater.

Answer 10

true

Question 11

An example of a public good is national defense.

Answer 11

true

Question 12

The supply curve for an artificially scarce good is a vertical line.

Answer 12

false

Question 13

Suppose a cable TV company charges $40/month for a subscription. If it lowers its price, total social benefits will increase.

Answer 13

true

Question 14

Price discrimination means the ability to charge different prices to different customers.

Answer 14

true

Question 15

The unregulated market outcome for a common property resource maximizes total profits.

Answer 15

false

Question 16

An individual transferable quota system is a common policy in a market for an artificially scarce good.

Answer 16

false

Question 17

People who benefit from a public good but do not pay for it are known as price
discriminators.

Answer 17

false

Question 18

For a public good, people’s marginal benefit curves may not be the same as their
willingness-to-pay curves.

Answer 18

true