Deck 14: Public Goods and Tax Policy

Question 1

Goods like Wi-Fi networks that are nonrival but excludable are known as:

A)pure public goods.
B)private goods.
C)commons goods.
D)collective goods.

Answer 1

collective goods.

Question 2

A good or service that is rival but nonexcludable is called a ________, and a good or service that is nonrival but excludable is called a ________.

A)public good; private good
B)commons good; public good
C)commons good; collective good
D)public good; collective good

Answer 2

commons good; collective good

Question 3

A good or service that is highly nonrival and highly nonexcludable is a(n)________ good.

A)pure public
B)commons
C)collective
D)private

Answer 3

pure public

Question 4

If a good can be consumed by one person without reducing its availability to others, then it is a ________ good.

A)nonexcludable
B)pure public
C)common
D)nonrival

Question 5

Which of the following is NOT an example of a public good?

A)National defense
B)Police protection
C)The ocean
D)Government-subsidized public housing

Question 6

Suppose Stan owns a piece of property with a large lake. Initially, Stan and his family were the only people who swam in the lake. Then Stan started selling tickets to people who wanted to go swimming in the lake. When Stan died, he left the lake and the land it was on to the state, stipulating that the lake be left open to the public for swimming. Due to the lake's remote location, it was never crowded. After Stan died, the lake became a ________ good.

A)private
B)commons
C)collective
D)public

Question 7

A good or service that is both rival and excludable is a:

A)public good.
B)private good.
C)collective good.
D)commons good.

Question 8

When someone buys a movie on DVD, the DVD is a ________ good.

A)public
B)private
C)collective
D)commons

Question 9

Suppose the latest Hunger Games movie first played in theaters, where it sold out during its opening week. Several months later it was available on pay-per-view TV. Two years later it was shown on CBS, a broadcast television network. When the movie was playing in theaters, it was a ________ good; when it was available on pay-per-view TV, it was a ________ good; and when it was shown on CBS, it was a ________ good.

A)private; public; public
B)private; collective; public
C)collective; private; commons
D)collective; commons; public

Question 10

Which of the following items is an example of a good that is nonrival but excludable?

A)Pay-per-view movies
B)Corn
C)National defense
D)Broadcast television

Question 11

A swing at a popular, unfenced public park is:

A)nonrival.
B)nonexcludable.
C)a collective good.
D)a pure public good.

Question 12

Suppose Stan owns a piece of property with a large lake. Initially, Stan and his family were the only people who swam in the lake. Then Stan started selling tickets to people who wanted to go swimming in the lake. When Stan died, he left the lake and the land it was on to the state, stipulating that the lake be left open to the public for swimming. Due to the lake's remote location, it was never crowded. When Stan started selling tickets to the public, the lake became a ________ good.

A)private
B)commons
C)collective
D)public

Question 13

Your state department of transportation is considering installing toll booths with gates on a quiet section of highway. If this is done, a good that is currently a:

A)public good will become a private good.
B)nonrival good will become a rival good.
C)nonexcludable good will become an excludable good.
D)rival good will become an excludable good.

Question 14

Aaron's neighbor Cliff keeps his front yard well-manicured and plants beautiful flowers which Aaron enjoys. If local law prevents Cliff from fencing his yard, the beauty of Cliff's front yard is:

A)nonrival.
B)a private good.
C)nonexcludable.
D)both nonrival and nonexcludable.

Question 15

A collective good is one that, to at least some degree, is:

A)nonrival but excludable.
B)nonexcludable but rival.
C)consumed by more than one person.
D)both nonrival and nonexcludable.

Question 16

National defense is an example of a good that is:

A)neither nonrival nor nonexcludable.
B)largely nonrival and nonexcludable.
C)only nonexcludable.
D)only nonrival

Question 17

If it is difficult, or costly, to prevent people who do not pay for a good from consuming the good, then the good is a ________ good.

A)nonexcludable
B)pure public
C)private
D)nonrival

Question 18

If a good is nonrival, then:

A)it has no substitutes.
B)consumers can enjoy it without paying for it.
C)consumption of the good by one person does not diminish its availability to others.
D)consumption of the good by one person diminishes its availability to others.

Question 19

Which of the following is the best example of a pure public good?

A)Cable television
B)A national park
C)National defense
D)Education

Question 20

A pure public good is one that is:

A)highly nonrival and highly nonexcludable.
B)neither nonrival nor nonexcludable.
C)nonexcludable but rival.
D)nonrival but excludable.

Question 21

A patch of edible mushrooms growing wild in a national forest is a ________ good.

A)public
B)private
C)pure public
D)commons

Question 22

The current U.S. income tax system requires taxpayers to pay a higher marginal tax rate on higher levels of taxable income. Suppose that the tax rate is 10 percent on the first $15,000 of taxable income, 15 percent on the next $45,000 of taxable income, 30 percent on the next $60,000 of taxable income, and 35 percent on taxable income above $120,000. Suppose the tax code also includes provisions that allow taxpayers to reduce the income on which they are taxed, and that those provisions most often apply to the richest taxpayers. These provisions tend to make the tax code:

A)more progressive.
B)more efficient.
C)less progressive.
D)less regressive.

Question 23

Pure public goods:

A)should always be provided by government.
B)should always be provided by private firms.
C)are frequently provided by the government, and are sometimes provided by private firms.
D)are, by definition, goods and services provided by the government.

Question 24

A proportional tax results in:

A)a larger percentage of income going to taxes as income rises.
B)a smaller percentage of income going to taxes as income rises.
C)the same dollar amount going to taxes for all taxpayers.
D)the same percentage of income going to taxes for all taxpayers.

Question 25

The current U.S. income tax system requires taxpayers to pay a higher marginal tax rate on higher levels of taxable income. Suppose that the tax rate is 10 percent on the first $15,000 of taxable income, 15 percent on the next $45,000 of taxable income, 30 percent on the next $60,000 of taxable income, and 35 percent on taxable income above $120,000. This income tax system is:

A)progressive.
B)regressive.
C)proportional.
D)progressive when income is low, then regressive.

Question 26

Joe earns $10,000 in income and pays $1,000 in taxes while Jack earns $30,000 and pays $4,000 in taxes. The structure of this tax is:

A)progressive.
B)proportional.
C)regressive.
D)a head tax.

Question 27

Under a head tax, the amount of tax paid is:

A)the same for all taxpayers.
B)proportional to each taxpayer's income.
C)a linearly increasing function of the taxpayer's income.
D)the same for all taxpayers who use the public good.

Question 28

If all taxpayers pay the same dollar amount, the tax is termed a:

A)proportional tax.
B)progressive tax.
C)head tax.
D)per unit tax.

Question 29

The government should only provide a pure public good if ________ and ________.

A)the good is indeed a public good; the majority of voters want it to be provided
B)the good's benefits exceed its costs; there is no less costly way to provide it
C)voters desire the good; no new taxes will be needed
D)the good's benefits exceed its costs; the government can afford to provide the good

Question 30

If taxpayers pay a smaller fraction of their income in taxes as their incomes rise, the tax is ________ and if taxpayers pay a larger fraction of their income in taxes as their income rise, the tax is ________.

A)regressive; progressive
B)progressive; regressive
C)proportional; progressive
D)regressive; proportional

Question 31

Curly pays $12,000 in taxes and earns $150,000. Moe pays $7,000 in taxes. If the tax system is proportional, then Moe's income is:

A)$56,000.
B)$125,000.
C)$87,500.
D)$98,000.

Question 32

Spike pays $14,000 in taxes and earns $100,000. Ace earns $120,000. If the tax system is progressive, Ace will pay ________ in taxes.

A)$15,500.
B)more than $16,800.
C)more than $15,500 but less than $16,800.
D)$16,800.

Question 33

If the government uses a head tax to finance a public good, then the:

A)proportion of income paid in taxes is constant.
B)dollar amount paid by each taxpayer declines as income rises.
C)proportion of income paid in taxes declines as income rises.
D)proportion of income paid in taxes increases as income rises.

Question 34

Josh pays $6,000 in taxes and earns $60,000. Maggie pays $4,000 in taxes. If the tax system is progressive, then Maggie earns:

A)$40,000.
B)more than $40,000 but less than $60,000.
C)less than $40,000.
D)more than $60,000.

Question 35

A highway without any tolls between 12am and 5am when there is very little traffic is an example of a ________ good.

A)collective
B)public
C)private
D)commons

Question 36

Broadcast television is an example of:

A)a collective good provided by the government.
B)a private good provided by private firms.
C)a private good provided by the government.
D)a public good provided by private firms.

Question 37

If the government needs to raise revenue to pay for a public good, the ideal tax structure would tax

A)all citizens by the same amount.
B)all citizens in proportion to their willingness to pay for the public good.
C)all citizens by the same proportion of their income.
D)only citizens who state that they will use the public good.

Question 38

If all taxpayers pay the same percentage of their income in taxes, the tax is termed a(n):

A)proportional tax.
B)progressive tax.
C)head tax.
D)per unit tax.

Question 39

A crowded beach without an entrance fee is a ________ good.

A)public
B)private
C)pure public
D)commons

Question 40

Collective goods tend to be underprovided by private markets because:

A)of the free-rider problem.
B)of inefficiencies in the income tax system.
C)these types of goods are usually provided by the government instead.
D)it's not socially optimal for the price of these goods to be greater than zero.

Question 41

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote.  
$$\begin{array} { | l | c | } \hline { \text { Vater } } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylarn } & \$ 360 \\\hline \text { Frar1 } & \$ 350 \\\hline \text { Rorruie } & \$ 190 \\\hline \text { Sarn } & \$ 170 \\\hline\end{array}$$  
Kyle proposes that the city auction the right to build the pool to the highest-bidding company.
   
The winning company would be able to charge residents a one-time fee to use the pool as much as they like, and only residents who pay the fee would be allowed to use the pool. If the private company could perfectly price discriminate, then:  

A)no private company would bid on the right to build the pool.
B)a private company would be willing to bid up to $490 to build the pool.
C)a private company would be willing to bid up to $1,000 to build the pool.
D)a private company would be willing to bid up to $1,490 to build the pool.

Question 42

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. The public's willingness to pay for the 2ⁿᵈ acre of parkland is ________.

A)$6.
B)$8.
C)$14.
D)$26.

Question 43

The demand curve for a public good is constructed by:

A)summing voters' desired quantity of the public good at each price.
B)surveying voters on how much of a particular public good they would use at each price.
C)summing voters' reservation prices at each quantity.
D)dividing the total cost of providing the public good by the number of potential users.

Question 44

Which of the following statements about the provision of public goods is true?

A)The government should always provide public goods.
B)The optimal level of a public good occurs when all taxpayers receive some of the good.
C)If the marginal benefit of a public good exceeds its marginal cost, more should be provided.
D)The total benefit of a public good should equal its total cost.

Question 45

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | l | c | } \hline { \text { Vater } } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylarn } & \$ 360 \\\hline \text { Frar1 } & \$ 350 \\\hline \text { Rorruie } & \$ 190 \\\hline \text { Sarn } & \$ 170 \\\hline\end{array}$$  
Building the swimming pool would ________ total economic surplus because ________.

A)decrease; the total cost of the pool is greater than the total social benefit of the pool
B)decrease; taxes would have to be collected to build the pool
C)increase; the total social benefit of the pool is greater than the total cost of the pool
D)increase; the cost of building the pool can be passed to users from other towns

Question 46

Suppose Scott's demand for a public good is P = 7 - 0.3Q and Mike's demand is P = 10 - 1.5Q. The equation for the total demand for the public good is:

A)P = 20 - 3.0Q.
B)P = 17 - 1.8Q.
C)P = 3 - 1.2Q.
D)P = 14 - 0.6Q.

Question 47

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | l | c | } \hline { \text { Vater } } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylarn } & \$ 360 \\\hline \text { Frar1 } & \$ 350 \\\hline \text { Rorruie } & \$ 190 \\\hline \text { Sarn } & \$ 170 \\\hline\end{array}$$  
If Fran proposes that the city build the pool and finance it with a $200 tax on each resident, then ________ residents will vote in favor of the proposal and ________ will vote against, so the proposal will ________.

A)5; 1; pass
B)4; 1; pass
C)2; 3; fail
D)3; 2; fail

Question 48

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C. If the good shown on the graphs is a public good, then the marginal benefit of the 30ᵗʰ unit is:

A)$30
B)$9
C)$4
D)$2

Question 49

If voters A, B, and C have the following demand curves for a public library Pa = 5 - Q, Pb = 10 - 2Q, and Pc = 15 - 3Q, then social demand for a public library is:

A)P = 6 - 30Q.
B)P = 15 - Q.
C)P = 30 - 3Q.
D)P = 30 - 6Q.

Question 50

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | l | c | } \hline { \text { Vater } } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylarn } & \$ 360 \\\hline \text { Frar1 } & \$ 350 \\\hline \text { Rorruie } & \$ 190 \\\hline \text { Sarn } & \$ 170 \\\hline\end{array}$$  
Dylan proposes that the city let a private company build the pool and charge residents a one-time fee to use the pool as much as they like. Only residents who pay the fee would be allowed to use the pool. If the private company were allowed to set a single fee, then:

A)no private company would offer to build the pool.
B)a private company would offer to build the pool and would set the fee equal to $200.
C)a private company would offer to build the pool and would set the fee equal to $250.
D)a private company would offer to build the pool and would set the fee equal to $298.

Question 51

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C. If the good shown on the graphs is a public good, and the marginal cost of providing each unit is constant and equal to $5, then what is the optimal quantity of the public good?

A)50 units
B)40 units
C)30 units
D)20 units

Question 52

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority.  
$$\begin{array} { | c | c | c | } \hline{ \text { Resident } } & \text { Reservatim Price } & \text { Incame } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$  
Suppose that the government knows each resident's reservation price. To collect no more than $900 in tax revenue, each resident should be charged ________ percent of their ________. 

A)100; reservation price
B)70; reservation price
C)20; income
D)90; reservation price

Question 53

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } \hline { \text { Resident } } & \text { Reservatim Price } & \text { Incame } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$  
If the government proposes to pay for the public good with a head tax of $300 per resident, then

A)all three will vote in favor of the tax.
B)Max will vote in favor of the tax, but Kris and Taylor will vote against it.
C)Max will vote against the tax, but Kris and Taylor will vote in favor of it.
D)all three residents will vote against the tax.

Question 54

Suppose a study that finds that the income elasticity of demand for a public good is greater than 1. This implies that the public good should be financed through a ________ income tax system.

A)collective
B)regressive
C)proportional
D)progressive

Question 55

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority.  
$$\begin{array} { | c | c | c | } \hline { \text { Resident } } & \text { Reservatim Price } & \text { Incame } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$  
Installing the public good would ________ total economic surplus by ________.

A)increase; $100
B)decrease; $100
C)decrease; $900
D)increase; $1,000

Question 56

To derive the market demand curve for a private good, one sums the ________. For a public good, one sums the ________.

A)individual quantities at various prices; individual quantities at various prices
B)individual prices at various quantities; individual quantities at various prices
C)individual quantities at various prices; individual prices at various quantities
D)individual prices at various quantities; individual prices at various quantities

Question 57

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C. If the good shown on the graphs is a private good, then at a price of $4, market demand is ________ units.

A)60
B)30
C)10
D)5

Question 58

Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C. If the good shown on the graphs is a public good, and the marginal cost of the 20ᵗʰ unit is $10, then the optimal quantity of the public good is:

A)zero.
B)20 units
C)less than 20 units.
D)greater than 20 units.

Question 59

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | l | c | } \hline{ \text { Vater } } & \text { Marginal Benefit } \\\hline \text { Kyle } & \$ 420 \\\hline \text { Dylarn } & \$ 360 \\\hline \text { Frar1 } & \$ 350 \\\hline \text { Rorruie } & \$ 190 \\\hline \text { Sarn } & \$ 170 \\\hline\end{array}$$  
The total social benefit of the swimming pool is:

A)$1,490.
B)$1,000.
C)$1,590.
D)$1,120.

Question 60

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } \hline { \text { Resident } } & \text { Reservatim Price } & \text { Incame } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$  
If the government proposes to pay for the public good with a proportional income tax of 8 percent, then:

A)all three voters will vote in favor of the tax.
B)Max and Taylor will vote against the tax, but Kris will vote in favor of it.
C)Kris and Max will vote in favor of the tax, but Taylor will vote against it.
D)all three voters will vote against the tax.

Question 61

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Suppose 10 shells have been fired off. What is the marginal cost of firing off one more shell?

A)$0
B)$10
C)$25
D)$100

Question 62

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. Suppose the town can purchase land for the park at a cost of $8 per acre. The optimal park size would be ________ acres.

A)2
B)4
C)6
D)8

Question 63

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. Suppose the city receives a grant that pays one half of the cost of each acre the city buys. If the cost of land is $28 per acre, the optimal park size is

A)8.
B)2.
C)4.
D)6.

Question 64

Suppose that the marginal cost of providing public television to one more viewer is zero. If a public television station sets the price of public television equal to its marginal cost, then:

A)the station will have an incentive to provide the optimal level of programming.
B)the station's total revenue will be zero.
C)the station's total revenue will be positive when there are only a few viewers, but will decline as more viewers tune in.
D)the television station will earn zero economic profit.

Question 65

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. The public is willing to pay $14 for the ________ acre of parkland.

A)$6.
B)$8.
C)$14
D)$20.

Question 66

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. If Towneburg's fireworks display has 20 shells, then the size of the display is:

A)optimal.
B)larger than optimal.
C)smaller than optimal.
D)unaffordable.

Question 67

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. Suppose the town can purchase land for the park at a cost of $20 per acre. The optimal park size would be ________ acres.  

A)2
B)4
C)6
D)8

Question 68

For many pure public goods like fireworks displays, weather forecasts, and television broadcasts the marginal cost of serving one more consumer is ________, and the optimal quantity of the public good occurs when ________. 

A)zero; provision is infinite.
B)determined by average cost rather than marginal cost; price equals average cost.
C)greater than the average cost; the government provides the good.
D)zero; the marginal benefit of the public good equals zero.

Question 69

There are 20 residents in the village of Towneburg.  The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ________ for the 25ᵗʰ shell, and the marginal cost of the 25ᵗʰ shell is ________.

A)$10; $2,500
B)$0; $10
C)$20; $10
D)$0; $3,500

Question 70

Lane and Riley are the only two residents in a neighborhood, and they share the same driveway. They would like to have the driveway paved. The value of the paved driveway is $1,500 to Lane and $900 to Riley. Regardless of who pays for the paving both people will benefit from it.  
What is the most a contractor can charge to pave the driveway and still be assured of being hired by at least one of them?

A)$600
B)$900
C)$1,500
D)$2,400

Question 71

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. What is the horizontal intercept of the village's demand curve for fireworks?

A)25
B)50
C)100
D)500

Question 72

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. If the park is currently 2 acres, and land costs $20 per acre, the town should:

A)reduce the size of the park.
B)purchase two additional acres.
C)not change the size of the park.
D)purchase 4 additional acres.

Question 73

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ________ for the 10ᵗʰ shell, and the marginal cost of the 10ᵗʰ shell is ________.

A)$30; $100
B)$600; $1,100
C)$30; $10
D)$600; $10

Question 74

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Cheap Charlie is one of Towneburg's 20 residents. While Charlie enjoys fireworks as much as the next Towneburger, when the fireworks fund-raising campaign kicks off, he claims to hate them. Cheap Charlie is trying to:

A)free ride.
B)rent seek.
C)force the village to be more efficient.
D)log-roll.

Question 75

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. What is the vertical intercept of the village's demand curve for fireworks?

A)25
B)50
C)10
D)1,000

Question 76

The marginal cost of providing another viewer with access to HBO is zero. Since only people who pay for HBO can watch it:

A)fewer than the socially optimal number of people will have access to HBO.
B)more than the socially optimal number of people will have access HBO.
C)HBO will not be profitable in the long run.
D)access to HBO is nonexcludable.

Question 77

Suppose a private monopolist is supplying a good that is nonrival but excludable. The market demand for the good is P = 24 - 3Q. If the marginal cost of providing this good is zero, but the firm charges $18, then the monopolist will provide ________ units, and the efficient number of units is ________.

A)2; 8
B)6; 8
C)2; 2
D)4; 2

Question 78

Consider a town with three residents.  The residents' demand curves for various acres of a public park are shown below. The public is willing to pay $14 for the ________ acre of parkland. 

A)2ⁿᵈ
B)4ᵗʰ
C)6ᵗʰ
D)8ᵗʰ

Question 79

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ________ for the 24ᵗʰ shell, and the marginal cost of the 24ᵗʰ shell is ________.

A)$20; $200
B)$20; $10
C)$40; $200
D)$40; $10

Question 80

According to the textbook, the private provision of television programming may not be socially optimal because:

A)consumers don't pay for broadcast television.
B)the government strictly regulates the market.
C)most consumers don't like watching television commercials.
D)programs are chosen on the basis of audience size rather than the value to the audience.