Question 1

When externalities are present,

Accepted Answer

A)  suppliers will refuse to produce desired goods and services.
B)  this indicates that property rights are well-defined and enforced.
C)  competitive market outcomes may be inconsistent with ideal economic efficiency.
D)  competitive markets will generally achieve ideal economic efficiency.

Question 2

Government provision of goods and services that cannot easily be provided through markets because it is difficult to establish a one-to-one link between payment and consumption of the good is referred to as the

Accepted Answer

A)  productive function of government.
B)  protective function of government.
C)  construction function of government.
D)  income redistribution function of government.

Question 3

Brand names such as "Nabisco" or "Sony"

Accepted Answer

A)  raise the cost of goods because they require advertising to make consumers aware of the brand name and,therefore,generally increase the price of products to consumers without producing any benefit to them.
B)  generally convey little information about a product to consumers.
C)  benefit consumers by assuring them of a known quality level when they buy a product that they have little previous first-hand knowledge about.
D)  provide the most value to consumers for goods that are repeat-purchase items.

Question 4

Figure 5-1
 
-In Figure 5-1,S₁ and D illustrate the demand and supply for a product if it were produced in a normal competitive market.Which of the following would be true if the firms in the industry were instead able to get government licensing restrictions to limit competition in the market?

Accepted Answer

A)  The restricted market supply would be S₃,resulting in a lower price and a higher than efficient level of output.
B)  The restricted market supply would be S₃,resulting in a higher price and a less than efficient level of output.
C)  The restricted market supply would be S₂,resulting in a lower price and a higher than efficient level of output.
D)  The restricted market supply would be S₂,resulting in a higher price and a less than efficient level of output.

Question 5

The key explanation for the prevalence of waterway pollution is

Accepted Answer

A)  the inclusion in production of all costs involving use of the waterway.
B)  that there are private costs but no costs to society.
C)  that waterways are often an open access,commonly owned resource.
D)  that waterways are subject to the market's normal control procedures.

Question 6

Market failure will most likely arise from poor information when the product is

Accepted Answer

A)  a repeat-purchase item.
B)  easily evaluated on inspection.
C)  often purchased from the same seller.
D)  unlikely to be purchased from the same seller in the future.

Question 7

Sellers will tend to be most concerned with customer satisfaction when

Accepted Answer

A)  it is difficult for the customer to evaluate product quality.
B)  they depend on repeat customers for most of their business.
C)  they sell primarily to tourists.
D)  they are a monopoly protected from competition by government licensing.

Question 8

"Government failure" is present when

Accepted Answer

A)  constitutional restrictions block government action that is favored by the majority of voters.
B)  political decision-makers try to serve the general public rather than their personal interest.
C)  the structure of incentives encourages political decision-makers to undertake actions that conflict with the efficient allocation of resources.
D)  the political decision-makers are motivated by something other than good intentions;if they have good intentions,political action will allocate resources efficiently.

Exam 5: Difficult Cases for the Market and the Role of Government

Government provision of goods and services that cannot easily be provided through markets because it is difficult to establish a one-to-one link between payment and consumption of the good is referred to as the

Correct Answer
verified

Market failure will most likely arise from poor information when the product is

Correct Answer
verified

Sellers will tend to be most concerned with customer satisfaction when

Correct Answer
verified

Brand names such as "Nabisco" or "Sony"

Correct Answer
verified

Figure 5-1 -In Figure 5-1,S₁ and D illustrate the demand and supply for a product if it were produced in a normal competitive market.Which of the following would be true if the firms in the industry were instead able to get government licensing restrictions to limit competition in the market?

Correct Answer
verified

The key explanation for the prevalence of waterway pollution is

Correct Answer
verified

When externalities are present,

Correct Answer
verified

"Government failure" is present when

Correct Answer
verified

Exam 5: Difficult Cases for the Market and the Role of Government

Government provision of goods and services that cannot easily be provided through markets because it is difficult to establish a one-to-one link between payment and consumption of the good is referred to as the

Correct AnswerverifiedShow Answer

Market failure will most likely arise from poor information when the product is

Correct AnswerverifiedShow Answer

Sellers will tend to be most concerned with customer satisfaction when

Correct AnswerverifiedShow Answer

Brand names such as "Nabisco" or "Sony"

Correct AnswerverifiedShow Answer

Figure 5-1 -In Figure 5-1,S₁ and D illustrate the demand and supply for a product if it were produced in a normal competitive market.Which of the following would be true if the firms in the industry were instead able to get government licensing restrictions to limit competition in the market?

Correct AnswerverifiedShow Answer

The key explanation for the prevalence of waterway pollution is

Correct AnswerverifiedShow Answer

When externalities are present,

Correct AnswerverifiedShow Answer

"Government failure" is present when

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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