1. Give an example of each of the following:

A) A good that is rivalrous in consumption and is excludable.

B) A good that is non-rivalrous in consumption and is excludable.

C) A good that is rivalrous in consumption and is non-excludable.

D) A good that is non-rivalrous in consumption and is non-excludable.

2. Suppose coal burning firms are emitting excessive pollution into the air. Suggest two ways the government can deal with this market failure.

3. If I neglect or refuse to cut the grass on my front lawn, what are the externalities involved? Suggest two ways the government might deal with this issue.

4. Identify three activities that generate positive externalities and three activities that generate negative externalities. Explain why each generates the type of externality you identified.

5. Why does the government subsidize the purchase of college education, but not the purchase of wedding dresses?

6. Which of the following are public goods? In each case, explain why.

1. Air bags
2. Medical schools
3. City streetlights
4. Elementary schools
5. Computer internet access
6. Contact lenses
7. Aircraft Carriers
8. Police Departments