Multiple choice question on public choice theory
1 . A public good is one for which
a . consumers who don't pay for the good can be excluded from its use.
b. the marginal cost of adding another consumer is zero
c. the good is divisable mandmeasureable
d. there are no external costs.
2. a cos tthat is imposed when an action by one agent harms another, outside of any market exchange, is a
a. regulation
b. marginal cost
c. market price
d. external cost
3. In the case of an external cost
a. the agent responsible for the cost must pay for the cost
b. the government will always pay the cost
c. the agent responsible for the external cost will produce too much of the good or service involver.
d. there is generally an offsetting social benefit.
4. If the marginal benefit received from a good is equal to the marginal opportunity cost of production , then
a. society`s well- being can be improved If production increases.
b. society`s well- being can be improved If production decrease
c. the market is producing too much of th good
d. the market is producing an efficient quantity
5. A good whose consumption the public sector encourages on grounds that individuals don't adequately weigh its benefits is a:
a . private good
b.public good.
c.demerit good.
d. merit good.
6. The inclination of regulator agencies to promote the interests of government agency employeees over those of the public is explained by the
a. theory of imperfect competition
b. public interest theory of regulation
c.capture theory of regulation
d. public choice thoery of regulation
7. The public choice theory of regulation rests on the premise that:
a. individuals are evil and will only do the worng thing
b. individuals will pursue their own self- interest inprivate, but not public matters
c. people employed by government will pursue their own self - interest
d. public servants can be trusted to serve the public interest.
8.consumer protection laws are based on
a. the concept that consumers do not always know what is good for them.
b. the concept that consumers will benefit from being protected at no cost.
c. the belief that consumables have sufficient information to make decisions
d. the idea that competitive markets always provide safe products
9. According to the coase theorem, the private market can archieve an efficcient outcome:
a. as long as the enforcement of property rights costs less than the marginal benefit of emissions
b. only if the property right to clean air is assigned to the polluter
c. only if the propertly right to clean air is assigned to the party harmed by pollution
d. if property rights are will defined and bargaining is costless
10. after adjustingfo rnon cash aid , the poverty rate in the united states is
a. unchanged
b. higher
c. lower
d. in some regions lower, but in most regions higher