Quiz #3 Multiple Choice Questions: (5 points each) 1. Los Angeles County Public Health inspects all restaurants in Los Angeles County, CA and assigns a letter grade based upon the degree of compliance with health codes. The most reasonable economic justification for this government intervention in the economy is to A. reduce a market failure due to lack of information on the part of consumers. B. create a negative externality. C. achieve hyperination. D. increase rent seeking. 2. Which of the following is a good example of a \"Club Good\"? A. A Sirius/KM Satellite Radio broadcast. B. The stock of cod in the Atlantic Ocean. C. A burrito from Moe's. D. National Defense. 3. is dened as improvements over time in a society's quality of life and living standards. A. Inflation B. The vicious cycle of poverty C. Economic growth D. Economic development 4. Per Capita GDP in the United States is approximately $59,500. In comparison, the value of Per Capita GDP in the European Union is approximately A. $39,200 (over 34% less than the value in the U.S.). B. $5 7,850 (essentially equal to, but slightly less than, the value in the U.S.). C. $60,125 (essentially equal to, but slightly more than, the value in the U.S.). D $86,400 (over 45% greater than the value in the U.S.). For Questions 5 and 6, consider the potential provision of a pure public good (that can be produced in four different levels: low, medium, high, or very high) in a three person society (consisting of Ann, Ben, and Chris). The table below provides a summary of Total Costs and individual benets from di'erent levels of provision of this pure public good. Zero Provision Low Provision Medium Provision High Provision Very High Provision Total Costs $13, 500 $18,000 Ann s Total Benets $8, 500 $10,000 Ben s Total Benets -_ $1 500 $2 500 $3 500 Chris s Total Benets $1,250 $2, 500 $3, 750 $5,000 5. The eicient level (i.e., Social Surplus maximizing level) of provision of this public good is A. Low Provision B. Medium Provision C. High Provision D. Very High Provision 6. Suppose the government chose to provide \"High Provision\" of the public good and then imposed mandatory taxes of: $7,750 on Ann, $2,750 on Ben, and $3,000 on Chris. Note that these taxes exactly cover the cost of providing \"High Provision.\" In comparison to \"Zero Provision,\" this would be a win-win outcome in a positive-sum environment. a win-lose outcome in a positive-sum environment. a win-lose outcome in a negative-sum environment. a win-lose outcome in a zero-sum environment. Dov