QUESTION 1

Which of the following goods or services is most like a public good (as "public good" is defined by economists)?

1. attendance at a Major League Baseball game
2. a high-speed train from Beijing to Shanghai
3. public schooling
4. defending the country from military invasion by a foreign government

QUESTION 2

The government of the City of Townburgville just imposed a strict price ceiling on milk sold in that City. (This price ceiling is below the equilibrium price of milk in Townburgville.) Economists predict that the following will be among the results of this price ceiling on milk.

1. The price ceiling on milk will cause fewer gallons of milk to be sold (compared to the number of gallons of milk that would be sold at the equilibrium price).
2. The price ceiling on milk will make milk less costly for everyone to acquire.
3. The marginal (or market) value of each gallon of milk sold in Townburgville will be driven lower by the price ceiling.
4. The demand for milk in Townburgville will rise.
5. There is more than one correct answer listed above.