SPEA V 186 EXAM 1 QUESTIONS AND
DETAILED ANSWERS. EXPERT
VERIFIED FOR GUARANTEED PASS.
The three main distinguishing parts of a government - ANS 1) Payments to government are
made by those who do not expect to receive repayment or economic benefits proportionate to
the resources that are provided;
(2) Purpose is other than to make profits, or profit equivalents; and,
(3) There is an absence of defined ownership interests.
Characteristics of the private sector (5) - ANS -Markets
-Exchange
-Property rights
-Rights of exclusion
-Appropriability - ability to capture and retain value from production and diffusion of goods and
services that an individual or firm creates for its own benefit (usually innovations).
Characteristics of the public sector - ANS -A notable absence of markets
-Non-exchange relations
-Absence of clear property rights
-Non-excludability
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, -Non-appropriability - inability to capture and retain value from production and diffusion of
goods and services that an individual or firm creates for its own benefit (usually innovations).
Rival goods - ANS Exhaustion through consumption of the same good
Non-rival goods - ANS Not Exhausted through consumption of the same good
Excludable - ANS Exclusion of non-payers feasible
Non-excludable - ANS Exclusion of non-payers Not feasible
Elements of pure private goods - ANS Rival and excludable
Elements of pure public good - ANS Non-rival, non excludable
Elements of toll goods - ANS Excludable, non rival
Elements of common pool (property) good - ANS Rival, non excludable
market failure - ANS the under-provision or over-provision of goods or services if provided
solely by private markets.
ex: disease control
Common indicators of market failure (2) - ANS public goods
externalities
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
DETAILED ANSWERS. EXPERT
VERIFIED FOR GUARANTEED PASS.
The three main distinguishing parts of a government - ANS 1) Payments to government are
made by those who do not expect to receive repayment or economic benefits proportionate to
the resources that are provided;
(2) Purpose is other than to make profits, or profit equivalents; and,
(3) There is an absence of defined ownership interests.
Characteristics of the private sector (5) - ANS -Markets
-Exchange
-Property rights
-Rights of exclusion
-Appropriability - ability to capture and retain value from production and diffusion of goods and
services that an individual or firm creates for its own benefit (usually innovations).
Characteristics of the public sector - ANS -A notable absence of markets
-Non-exchange relations
-Absence of clear property rights
-Non-excludability
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, -Non-appropriability - inability to capture and retain value from production and diffusion of
goods and services that an individual or firm creates for its own benefit (usually innovations).
Rival goods - ANS Exhaustion through consumption of the same good
Non-rival goods - ANS Not Exhausted through consumption of the same good
Excludable - ANS Exclusion of non-payers feasible
Non-excludable - ANS Exclusion of non-payers Not feasible
Elements of pure private goods - ANS Rival and excludable
Elements of pure public good - ANS Non-rival, non excludable
Elements of toll goods - ANS Excludable, non rival
Elements of common pool (property) good - ANS Rival, non excludable
market failure - ANS the under-provision or over-provision of goods or services if provided
solely by private markets.
ex: disease control
Common indicators of market failure (2) - ANS public goods
externalities
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
