Public Goods and Market Equilibrium Quiz

What is a key characteristic of private goods?

• They are non-excludable and non-rivalrous

• They are excludable and rivalrous

• They are excludable but non-rivalrous

• They are non-excludable but rivalrous

Which of the following is an example of a public good?

• A restaurant meal

• A smartphone

• A lighthouse

• A private car

What problem is commonly associated with public goods?

• Price fluctuations

• Overproduction

• Free-rider problem

• Limited availability

Why do governments often provide public goods?

• Because private businesses refuse to sell any goods

• Because public goods generate high profits

• Because private companies may not find it profitable to provide them

• Because they are easy to sell in competitive markets

Which of the following is NOT a characteristic of a public good?

• Non-excludability

• Non-rivalry

• Can be consumed by multiple people without reducing availability

• Can be easily owned and sold like a private product

What is the market equilibrium price?

• The highest price a producer can charge

• The lowest price a consumer is willing to pay

• The price at which quantity demanded equals quantity supplied

• The price set by the government

What is the purpose of a minimum price (price floor)?

• To protect consumers from high prices

• To ensure producers receive a fair income

• To reduce production costs

• To increase consumer demand

If a government sets a price ceiling below the equilibrium price, what is the most likely result?

• A market surplus

• A market shortage

• No impact on the market

• A decrease in demand

What could happen when a price floor is set above the equilibrium price?

• Excess supply (surplus)

• Excess demand (shortage)

• No change in supply and demand

• A black market for the product

What is a possible unintended consequence of setting a price ceiling?

• Increased supply of goods

• Higher profits for producers

• Development of black markets

• Lower consumer demand