Question

The policy of laissez-faire was

	a.	promoted by John Stuart Mill
	b.	attacked by Adam Smith
	c.	suggested by Karl Marx
	d.	invented by Lyndon Johnson

The free rider problem refers to people who

	a.	will only consume a public good if it is free.
	b.	are not willing to pay for a public good because they lack information about its potential benefits.
	c.	will not voluntarily pay for a public good even though they would benefit from its provision.
	d.	for efficiency’s sake, should be allowed to consume public goods (such as mass transit) even if they do not pay.

Question 13

In the United States, production by federal, state, and local government

	a.	exceeds the levels in Western Europe through U.S. nationalization of private enterprises.
	b.	can include electricity, education, and garbage collection.
	c.	is banned under the Constitution (except for printing money).
	d.	never competes directly with private firms.

Question 14

When a market cannot function competitively, one reason for government intervention is.

	a.	the government is more likely than private firms to produce in a least-cost fashion.
	b.	regulation is unambiguously more inefficient than government production.
	c.	the private market is not likely to produce at the socially efficient output level.
	d.	consumer sovereignty is better protected under government provision of output.

Question 15

The market failure referred to as incomplete markets is the failure of

	a.	some goods to be provided even though benefits would exceed costs.
	b.	all people to demand all goods.
	c.	some goods to be provided because their prices are too low.
	d.	some goods to be demanded because their competitive prices are too high.

Question 16

An impure public good is a good

	a.	that is not considered unanimously to serve the public interest.
	b.	that to some degree has a characteristic of a private good.
	c.	whose provision is inefficient because of free riders.
	d.	that is both publicly and privately provided.

Question 17

The Constitution forbids the federal government from levying

	a.	import taxes
	b.	uniform taxes
	c.	export taxes
	d.	capitation taxes

Question 18

Charging a toll on a crowded bridge can

	a.	interfere with competitive efficiency.
	b.	help to correct a negative externality
	c.	be a public good, since my paying the toll does not keep you from paying the toll as well.
	d.	be a positive externality, because people do not wait so long once there is a toll.

The marginal rate of substitution is the slope of

	a.	an indifference curve
	b.	a budget line
	c.	a production possibilities curve
	d.	utility possibilities curve

As a result of the Great Depression (1929-1941) economic policy changed substantially by

	a.	showing how a fundamental role of the government is to stabilize the economy through various approaches.
	b.	showing how easily it would be to slip into communism if we do not monitor policy effects.
	c.	showing how government could not stop economic fluctuations and the free market must be left to correct itself.
	d.	showing how government involvement can make matters worse in an economic downturn.

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering first question.

1.

Ans: a. promoted by John Stuart Mill.

Explanation:

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