ECON 102 QUESTIONS AND ANSWERS LATEST UPDATED
VERSION, GRADED A+.
Computer software that you can download from the Internet for a price is an artificially scarce good
because it is ________ but ________ in consumption.
excludable; nontrivial
The source of the inefficient use of artificially scarce goods is similar to the source of inefficiencies
created by:
a natural monopoly.
If a good is subject to the free-rider problem and an inefficiently high level of consumption, the good
must be a(n):
common resource.
A whale is a common resource because the private market ________ prevent consumption by people
who do not pay for it, and the same unit ________ be consumed by more than one person at the
same time.
cannot; cannot
The marginal social benefit of pollution:
can be measured as the additional gain to society from one additional unit of pollution.
The marginal cost of pollution ________ as the quantity of pollution emissions ________.
decreases; decreases
Suppose each person in a community had to pay for his or her own education from kindergarten
through high school. One would expect that:
less education would be acquired, since society has not considered the positive external benefits of
education.
If at the current amount of pollution, the marginal social benefit of pollution is greater than its
marginal social cost, then:
there is too little pollution.
A Pigouvian subsidy is:
designed to encourage activities generating external benefits.
Clean water in a river is nonexcludable because:
the supplier cannot prevent consumption by people who do not pay for it.
VERSION, GRADED A+.
Computer software that you can download from the Internet for a price is an artificially scarce good
because it is ________ but ________ in consumption.
excludable; nontrivial
The source of the inefficient use of artificially scarce goods is similar to the source of inefficiencies
created by:
a natural monopoly.
If a good is subject to the free-rider problem and an inefficiently high level of consumption, the good
must be a(n):
common resource.
A whale is a common resource because the private market ________ prevent consumption by people
who do not pay for it, and the same unit ________ be consumed by more than one person at the
same time.
cannot; cannot
The marginal social benefit of pollution:
can be measured as the additional gain to society from one additional unit of pollution.
The marginal cost of pollution ________ as the quantity of pollution emissions ________.
decreases; decreases
Suppose each person in a community had to pay for his or her own education from kindergarten
through high school. One would expect that:
less education would be acquired, since society has not considered the positive external benefits of
education.
If at the current amount of pollution, the marginal social benefit of pollution is greater than its
marginal social cost, then:
there is too little pollution.
A Pigouvian subsidy is:
designed to encourage activities generating external benefits.
Clean water in a river is nonexcludable because:
the supplier cannot prevent consumption by people who do not pay for it.
