The Economics Basis of Government Activities

1.    How many characteristics of public good

• 2

• 3

• 4

• 5

Which are characteristics of public goods

•   Non-Excludability

• Excludability

• Rivalry

Which is not a public good

• Lighthouse

• Traffic light

• Infomation

• House

What type of public goods are roads classified as ?

• Pure public goods

• Impure public goods

Answer explanation

Because if there are too many users, the road will be congested and thus previous consumers will affect the consumption ability of later consumers.

Which is not characteristics of externalities ?

• Who cause damages (or benefits) to whom is often relative

• The distinction between negative & positive externalities is relative

• All externalities efficent

Which is type of externality

• A. Nagative externalities

• B. Positive externalities

• C. Both A&B

Which is positive externality

• A.  Noise pollution created by someone playing loud music in an apartment building leads to sleep deprivation for their neighbors.

• The development of disease is a result of food processing companies - mainly removing fiber and adding sugar to products

• An industrail company offers first aid classes to employess to enhance workplace safety

Public goods are consumed by everyone in equal quantities, but the value of those public goods is not necessarily assessed equally . True or False ?

• True

• False

Answer explanation

For a pure public good like a lighthouse, shipowners with high-value goods will appreciate the value of the lighthouse more than shipowners with cheap goods.

Public goods must be produced by the public sector . True or False

• True

• False

Government intervention in public goods is :

• The public sector directly produces and provides public goods . State-owned enterprises are the main production force, using budget-costs

• Public sector and private sector cooperate in the production and provision of public goods (Public-private partnership)

• Both A&B