Ans: As the text suggests, this is perfect use of experimental data for testing. Using certain states as “controls” would allow us to examine the difference in fatalities between those states that did not change the tax. Of course, we need to control for other differences that might affect outcomes.
Chapter 4 Public Goods
Multiple Choice
1. Public goods are characterized by A) nonrivalness.B) excludability
C) the sum of the MRSs equaling MRT. D) all of the above. Ans: d
2. Market mechanisms are unlikely to provide A) prices.
B) nonrival goods efficiently.C) supply and demand.D) none of the above. Ans: b
3. A pure private good is
A) nonrival in consumption and subject to exclusion. B) rival in consumption and subject to exclusion. C) rival in consumption and not subject to exclusion. D) all of the above. Ans: b
4. Commodity egalitarianism refers to commodities that A) are important for most consumers. B) are too dangerous for most consumers.
C) should be made available to all consumers.D) are good ideas but never produced. E) are produced in bulk. Ans: c
5. Charging individual prices that are based on consumers’ willingness to pay is A) government price supports.
B) will pricing.C) second tier pricing.D) price discrimination. Ans: d
6. Equilibrium for public goods is characterized by A) MSB = MSB.
B) MRS = MRT.C) MRS = MRS = MRS=…=MRS = MRT. D) MC = MB.E) MRS – MRT = MSB. Ans: c
7. Summing demand curves horizontally sends market ______________ to individuals, while summing vertically sends market ______________ to individuals. A) price; price
B) quantity; quantityC) quantity; priceD) price; quantity Ans: d
8. Public goods can be
A) provided privately.B) provided publicly.
C) subject to free rider problems.D) all of the above. Ans: d