Principles Of Economics 5th Edition By N. Gregory Mankiw – Test Bank

Overview

Chapter 11
Public Goods and Common Resources

True or False Questions

1. When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.
ANS: T DIF: 2 REF: 11-0
NAT: Analytic LOC: Markets, market failure, and externalities
TOP: Market failure MSC: Interpretive

2. Free goods are usually efficiently allocated without government intervention.
ANS: F DIF: 2 REF: 11-0
NAT: Analytic LOC: Markets, market failure, and externalities
TOP: Market failure MSC: Interpretive

3. Most goods in our economy are allocated in markets, where buyers pay for what they receive and sellers are paid for what they provide.
ANS: T DIF: 1 REF: 11-0
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Private goods MSC: Applicative

4. Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.
ANS: F DIF: 2 REF: 11-0
NAT: Analytic LOC: The role of government TOP: Public goods
MSC: Interpretive

5. A good that is excludable but not rival is known as a natural monopoly.
ANS: T DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Natural monopolies MSC: Definitional

6. National Public Radio would be considered a natural monopoly.
ANS: F DIF: 2 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Natural monopolies MSC: Interpretive

7. Concerts in arenas are not excludable because it is virtually impossible to prevent someone from seeing the show.
ANS: F DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Excludability MSC: Applicative

8. A pair of jeans is rival but non-excludable.
ANS: F DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Excludability | Rivalry in consumption MSC: Applicative

9. A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.
ANS: F DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Excludability | Rivalry in consumption MSC: Definitional

10. Some goods can be classified as either public goods or private goods depending on the circumstances.
ANS: T DIF: 2 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Public goods | Private goods MSC: Interpretive

11. Roads can be considered either public goods or common resources, depending on how congested they are.
ANS: T DIF: 1 REF: 11-1
NAT: Analytic LOC: The Study of economics, and definitions in economics
TOP: Public goods | Common resources MSC: Applicative