Market Failure & Role of Government-Public Goods [AP (Advanced Placement) Microeconomics]: Questions 1 - 4 of 9

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Question 1

Appeared in Year: 2017 (NET)

Question

MCQ▾

With reference to the characteristics of non excludability and non rivalry, Law and Order is an example of:

Choices

Choice (5)Response

a.

Negative externality

b.

A public good

c.

Increasing returns a public good

d.

A positive externality

e.

None of the above

Question 2

Appeared in Year: 2017 (NET)

Question

MCQ▾

A public good is

(i) Non excludable in nature

(ii) Non rival in consumption

(iii) Excludable in nature

(iv) A good that public must possess

Select the correct answer from answer form the codes given below:

Choices

Choice (5)Response

a.

Only (iv)

b.

(i) and (ii)

c.

(iii) and (iv)

d.

Only (iii)

e.

All of the above

Question 3

Appeared in Year: 2014 (NET)

Question

MCQ▾

Which of the following methods would be used for estimation of price change of a house due to either pollution or good environment like existence of park and scenic beauty? (June)

Choices

Choice (5)Response

a.

Contingent Valuation Method

b.

Externality Effects

c.

Hedonic Method

d.

All of the above

e.

None of the above

Question 4

Appeared in Year: 2013 (NET)

Question

Assertion-Reason▾

Assertion(Ꭺ)

There is no incentive for a profit-maximizing producer to supply the public goods. (December)

Reason(Ꭱ)

If he produces it, he is unable to exclude people from consuming it and hence he cannot charge a price.

Choices

Choice (5)Response

a.

Both Ꭺ and Ꭱ are true and Ꭱ is the correct explanation of Ꭺ

b.

Both Ꭺ and Ꭱ are true but Ꭱ is NOT the correct explanation of Ꭺ

c.

Ꭺ is true but Ꭱ is false

d.

Ꭺ is false but Ꭱ is true

e.

Both Ꭺ and Ꭱ are false

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