Name _______________________

Date________ Mod______
AP Econ
Mr. Marvin
Chapter 11 questions
_____1. Government policy can potentially raise economic well-being
a. in all markets for goods and services.
b. in economic models, but not in reality.
c. when a good does not have a price attached to it.
d. never.

_____2. When goods do not have a price, which of the following primarily ensures that the good is
produced?
a. buyers
b. sellers
c. government
d. the market
_____3. When a good is excludable,
a. one person's use of the good diminishes another person's ability to use it.
b. people can be prevented from using the good.
c. no more than one person can use the good at the same time.
d. everyone will be excluded from using the good.
_____4. Which of the following would be considered a private good?
a. national defense
b. a public beach
c. local cable television service
d. a bottle of natural mineral water
_____5. Which of the following goods is rival in consumption and excludable?
a. a slice of pizza
b. cable TV service
c. a sunset
d. national defense
_____6. The Great Lakes are
a. private goods.
b. natural monopolies.
c. common resources.
d. public goods.

_____7.A streetlight is a
a. private good.
b. natural monopoly.
c. common resource.
d. public good.
_____8.Labor is a
a. private good.
b. natural monopoly.
c. common resource.
d. public good.

_____9. Because public goods are

a. excludable, people have an incentive to be free riders.
b. excludable, people do not have an incentive to be free riders.
c. not excludable, people have an incentive to be free riders.
d. not excludable, people do not have an incentive to be free riders.
Name _______________________
Date________ Mod______
AP Econ
Mr. Marvin
Chapter 11 questions
 Name _______________________
Date________ Mod______
AP Econ
Mr. Marvin
Chapter 11 questions
_____10. Consider a good for which the number of people who benefit from the good is large and the
exclusion of any one those people is impossible. In this case, the market for this good will likely
a. be a natural monopoly.
b. have a free-rider problem
c. not exist.
d. be limited to a small number of units of production.
_____11. Private companies will invest in medical research if
a. they will produce general knowledge.
b. they will produce a specific product for which they may receive a patent.
c. there is no government intervention in the market for medical products.
d. others will benefit from their discoveries.
_____12. Advocates of antipoverty programs claim that fighting poverty
a. is best accomplished by charities.
b. is a public good.
c. is more efficiently accomplished by the market.
d. should not be attempted with tax dollars.
_____13. A lighthouse is typically considered to be a public good because
a. the owner of the lighthouse is able to exclude beneficiaries from enjoying the lighthouse.
b. there is rarely another lighthouse nearby to provide competition.
c. a nearby port authority cannot avoid paying fees to the lighthouse owner.
d. all passing ships are able to enjoy the benefits of the lighthouse without paying.
_____14. If the government decides to build a new highway, the first step would be to conduct a study to
determine the value of the project. The study is called a
a. fiscal analysis.
b. monetary analysis.
c. welfare analysis.
d. cost-benefit analysis.
_____15. To increase safety at a bad intersection, you must decide whether to install a traffic light in your
hometown at a cost of $15,000. If the traffic light reduces the risk of fatality by 0.4 percent, and the
value of a human life is estimated to be $10 million, you should
a. install the light because the expected benefit of $40,000 is greater than the cost.
b. install the light because the expected benefit of $20,000 is greater than the cost.
c. not install the light because the expected benefit of $15,000 is only equal to the cost.
d. not install the light because the expected benefit of $4,000 is less than the cost.
_____16. Neither public goods nor common resources are
a. excludable, but only public goods are not rival in consumption.
b. excludable, but only common resources are not rival in consumption.
c. rival in consumption, but only public goods are not excludable.
d. rival in consumption, but only common resources are not excludable.
_____17. An overcrowded beach is an example of
a. a positive externality.
b. a Tragedy of the Commons.
c. an environmentally inefficient allocation of resources.
d. an economically unfair allocation of resources.
_____18. The Ogallala aquifer is a large underground pool of fresh water under several western states in
the United States. Any farmer with land above the aquifer can at present pump water out of it. We
might expect that
a. over time, the aquifer is likely to be overused.
b. each farmer has a sufficient incentive to conserve the water.
c. state governments have an incentive to insure that their farmers do not overuse the water.
d. resources would be used more efficiently if the government paid for the pumps farmers use to get
the water.
 Name _______________________
Date________ Mod______
AP Econ
Mr. Marvin
Chapter 11 questions
1. ANS: C
2. ANS: C
3. ANS: B
4. ANS: D
5. ANS: A
6. ANS: C
7. ANS: D
8. ANS: A
9. ANS: C
10. ANS: B
11. ANS: B
12. ANS: B
13. ANS: D
14. ANS: D
15. ANS: A
16. ANS: A
17. ANS: B
18. ANS: A