Question

Question 14 (1 point) Which of these is a pure public good? a) 1-95 b) flu shots c) a public park d) environmental protection

Answer 1

14. Environmental protection is a pure public good. Pure public goods are perfectly non rival in Consumption and non excludable. Environmental protection satisfies both of these conditions : you get the benefits of environmental protection for free (you don't have to pay for it), and Consumption of protection by one person doesn't reduce the protection amount available to others.

Public park is also public good but it's an impure public good. Public park is non excludable (you don't have to pay to enter public park) but it's not completely non rival in Consumption because once you enter the park you reduce the park space available to others.

Answer: option D

15. If an unregulated industry generates pollution, marginal social cost exceeds the marginal private cost. Therefore, the market price is lower than the Socially optimal price, and the market quantity is more than the Socially optimal quantity.

Market equilibrium occurs at the point where Marginal private benefit curve intersects the marginal private cost curve. Socially efficient equilibrium occurs at the point where marginal private benefit curve intersects the marginal social cost curve.

price msc mpe socially optimal Equilibrium P2 P private market equilibrium MPB quantity 27

Answer: option B