Externatlities, Public Goods & What makes money, money?

Who incurs the cost or benefit of an externality?

• the producer

• the consumer

• a third party

Check ALL that are true of Externalities...

• they can be positive

• they can be negative

• they could be considered positive by one person and negative by antother

A beekeeper's bees pollinating the orchard next door is an example of

• a negative externality

• a positive externality

The air pollution caused be a factory makes people ill and drives down home prices as people move away from the area near the factory, this is a

• positive externality

• negative externality

There is an outdoor concert near your home and you can hear it from your home. This is an example of...

• a positive externality

• a negative externality

• an externality that could be considered positive or negative depending on each individual's situation

Public goods are considered a market failure because

• there is an inefficient distribution of goods and services in a free market

• the free market fails to provide some goods & services we all need

• no one pays for them

• not everyone pays for them

Public goods are (choose the 2 correct answers)

• excludable

• non-excludable

• rival

• non-rival

Non-rival means

• businesses aren't in competition

• when one person uses a good it doesn't prevent others from using it

• when one person uses a good it prevents others from using that good

Which is NOT an example of a public good?

• police, fire, and ambulance services

• an amusement park like Cedar Point

• public parks, sidewalks, roads

• schools and libraries

Our money today is

• commodity backed money

• fiat money