Question 1: Which of the following is considered a common good? Select all that apply.

A. A large tropical forest

B. A stock of shrimp in the ocean

C. A bag of apples you buy at a farmer's market

D. Clean air

E. A public park

F. A sports car

Question 2: A court order forbidding the continuation of behavior that leads to damages is described as...

A. Injunction

B. liability rules

C. Nonrivalry

D. Free-rider problem

E. None of the above

Question 3: Which of the following is considered a club good? Select all that apply.

A. A stock of fish in a lake

B. A movie at a movie theater

C. Cable T.V.

D. A sweatshirt

E. National defense

F. A members-only recreation center

G. coal

Question 4: The ______ is the cost of producing an additional unit of a good or service that is imposed outside the production of the good or service.

A. marginal social cost

B. marginal private cost

C. marginal damage cost

D. None of the above

Question 5: Which of the following describes the factor substitution effect?

A. The wage rate for fast food workers doubled so the local fast food chain laid off some workers and decreased production.

B. The wage rate for fast food workers increased so the local fast food chain replaced some workers with a burger-flipping robot.

C. The productivity of fast food workers doubled so the local fast food chain increased their output and lowered their prices.

D. None of the above

E. Options A and C only

Question 6: The statement "With an education budget of over $1 million a year, the local school system won't suffer without my small contribution" is best described as an example of....

A. the free-rider problem

B. the drop-in-the-bucket problem

C. the private goods problem

D. the externalities problem

E. All of the above

Question 7: If a firm is exhibiting decreasing returns to scale...

A. If the firm doubles all inputs, outputs exactly double

B. If the firm doubles all inputs, outputs less than double

C. If the firm doubles all inputs, outputs more than double

D. If the firm doubles all inputs, it shuts down in the short run

Question 8: True or false: The shutdown point is the lowest point on the average total cost curve.

Question 9: True or false: In an unregulated market economy with no government to ensure that public goods are produced, public goods would at best be produced in insufficient quantity and at worst not produced at all.

Question 10: "Under certain conditions, when externalities are present, private parties can arrive at the efficient solution without government involvement regardless of which party is awarded property rights." The above theorem is called the....

A. Negative externality theorem

B. Public goods theorem

C. Property rights theorem

D. Coase theorem

E. None of the above

Question 11: Which of the following is NOT a public good?

A. national defense

B. a city park

C. the legal system

D. a t-shirt

E. all of the above are examples of public goods

Question 12: True or false: If left unregulated, free markets tend to overproduce negative externalities.

Group of answer choices

Question 13: The statement "Even if I don't pay my community fee, I am still able to enjoy services such as the community park" is best described as an example of...

A. the free-rider problem

B. the drop-in-the-bucket problem

C. the private goods problem

D. the externalities problem

E. All of the above

Question 14: Which of the following is an example of a negative externality?

A. Pollution from a car factory

B. Loud noise coming from a neighboring party when you are trying to sleep

C. Acid rain

D. All of the above

E. options A and B only

Question 15: True or false: Derived demand is thedemand for resources that is dependent on the demand for the outputs those resources can be used to produce.

Question 16: Which of the following is an example of a positive externality?

A. The utility you receive from consuming an apple you purchased

B. Pollution from a factory

C. Loud noise from your neighbor's apartment when you are trying to sleep

D. Decreased congestion on the roads when you take public transportation

E. none of the above

Question 17: True or false: Negative externalities occur when the cost of production to producers is greater than the cost to society.

Question 18: True or false: In long-run competitive equilibrium, economic profits are 0.

Question 19: True of false: The process of adding up individual preferences to make a choice for society as a while is called social choice.

Question 20: True or false: Long-run competitive equilibrium occurs when P>SRMC=SRAC=LRAC.

Question 21: ______ occurs when the government becomes the tool of the rent seeker and the allocation of resources is made even less efficient by the intervention of government.

A. government failure

B. public choice theory

C. social choice

D. excludability

E. All of the above

Question 22: Jelly and jam are substitutes for consumers. The price of jelly decreases. What happens in the jam market?

Note: make sure you read every part of each answer.

A. Demand for jam decreased, equilibrium price decreased, equilibrium quantity decreased, supply stayed the same

B. Demand for jam increased, equilibrium quantity increased, equilibrium price increased, supply stayed the same

C. Supply of jam decreased, equilibrium price increased, equilibrium quantity decreased, demand stayed the same

D. none of the above

Question 23: The income level of FinalTown increased last year, what happened in the market for cars (a normal good)?

A. Demand increased, equilibrium price decreased, equilibrium quantity decreased, supply increased

B. Demand decreased, Equilibrium price decreased, Equilibrium quantity decreased, supply stayed the same

C. Supply decreased, Equilibrium price increased, Equilibrium quantity increased, Demand increased

D. Options A and B only

E. None of the above