Worksheets[GROUP 3] PUBLIC ECONOMICS
Total questions: 10
Worksheet time: 5mins
1. Which of the following is a key characteristic of public goods?
Excludability
Rival consumption
Non-rival consumption
Diminishing returns
2. National defense is an example of:
Private good
Public good
Club good
Common resource
3. The “free rider” problem occurs when:
People pay more than the market price
People consume without contributing to the cost
Goods are sold below marginal cost
Taxes are too high
4. Which of the following is an impure public good?
National defense
Street lighting
Public beach
Satellite signals
5. When a toll is imposed on a public bridge, society may experience:
Overconsumption
Welfare loss due to underconsumption
Zero transaction cost
Increased public spending
6. Why might governments decide to provide certain goods directly rather than relying on private markets?
To maximize profits for private firms
Because public goods have high transaction costs and are hard to exclude users from
Because public goods are free to produce
To eliminate all forms of competition
