Property Rights, Public Goods, and Market Failures

Which of the following is NOT true about a public good?

• It is paid for through taxes

• It is non-rivalrous, so one user doesn't take away from another user

• it is non-excludable, so it's not restricted to users who don't pay

• it's an externality, so it has a cost to a third party other than the buyer and seller

Which of the following is NOT a positive government intervention in the market?

• providing for national defense

• setting price ceilings and floors

• breaking up a monopoly

• establishing courts that enforce contracts

Which of the following are situations in which a government should get involved in the economy?

Choose ALL correct answers.

• negative externalities

• monopolies

• when a business fails

• private property not being protected

What two characteristics must a good or service have in order to be what economists define as a “public good” in a limited government?

• non-excludable

• non-rivalrous

• non-important

• non-economic

How did the government respond to the "smoggy 70s"?

• They funded less oil exploration

• They set standards for car emissions

• They began to invest in electric cars

• They set a price ceiling for large cars

How did AT&T cause a market failure?

• They established an externality

• They were investing in more competition

• They had become a monopoly

• They expanded to other countries