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Home / Questions / Exhibit N-5 depicts a market whose socially optimal price and quantity is a.$8, 65 b.$5

Exhibit N-5 depicts a market whose socially optimal price and quantity is a.$8, 65 b.$5

 Exhibit N-5 depicts a market whose socially optimal price and quantity is

a.$8, 65

b.$5, 65

c.$7, 80

d.$5, 80

e.$4, 80

52.              Exhibit N-5 depicts a market for which the government, in order to achieve the social
                            optimal price and quantity, must

a.tax producers of the good

b.tax consumers of the good

c.prohibit the production of the good

d.restrict the production of the good

e.grant a subsidy to consumers of the good

53.              Exhibit N-5 depicts a market in which the achievement of the socially optimal price and
                            quantity requires the government to

a.impose a tax of $3 per unit produced

b.impose a tax of $4 per unit produced

c.grant a subsidy of $3 per unit consumed

d.grant a subsidy of $4 per unit consumed

e.grant a subsidy of $8 per unit consumed

54.              In the presence of positive externalities, the market will choose a price that is 
                            __________ and produce a quantity that is  __________ than the socially optimal price
                            and quantity.

a.higher; lower

b.lower; lower

c.higher; higher

d.lower; higher

e.impossible to know without more information about market demand and supply

55.              Which of the following is not a characteristic of a public good?

a.It requires resources to produce.

b.It is not diminished or depreciated as additional people consume the good.

c.Its benefits cannot be withheld from anyone.

d.It is a free good.

e.It generates value (benefits) to more than one person.

56.              Which of the following would be the best example of a public good?

a.a candy bar

b.a painting by Monet

c.a taxi cab ride

d.a beautiful sunset

e.a crowded beach

57.              Some markets fail to generate an optimal quantity of public goods because

a.free riders undermine the profitability of producing the goods

b.they are too expensive

c.they yield too few benefits

d.private enterprise cannot get access to the raw materials

e.there is insufficient demand for such goods

58.              Government failure occurs when

a.intervention by the government in the market fails to provide the socially optimal
quantity of goods produced

b.the government fails to intervene in a market that has sizable externalities

c.the government fails to protect the free market and is forced to nationalize

d.the government must intervene in a market to provide the socially optimal quantity
of goods

e.the government imposes a tax when it should have used an obligatory control

59.              According to public choice theorists, the primary concern of policy makers is

a.the public interest

b.achieving a social optimum for the economy as a whole

c.to protect their jobs

d.the provision of public goods

e.market failure

60.              Which of the following would be the best example of a near public good?

a.a candy bar

b.a painting by Monet

c.a taxi cab

d.a beautiful sunset

e.a national park

Dec 12 2019 View more View Less

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