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13 Cards in this Set
- Front
- Back
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What is external benefit?
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A benefit from a good experienced by someone other than the person who buys the good.
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Suppose 1,000 people would each get a benefit of $40 from a levee. Building the levee is socially efficient if its cost is less than $ _____. If the cost is $30,00, a tax of $ _____ per person would generate unanimous support for the levee.
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$40.00, $30.00.
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A public good is ______ (rival/nonrival) in consumption and _______ (excluded/nonexcludable).
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nonrival, nonexcludable.
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What is a Public good?
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A good that is available for everyone to utilize, regardless of who pays for it and who doesn't.
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What is a private good?
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A good that is consumed by a single person or household; a good that is rival in consumption and excludable.
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What is the free-rider problem?
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A person who gets the benefit form a good but does not pay for it.
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A fire extinguisher is an example of a(n) _____ good with a(n) _____ benefit.
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private, external
I someone buys a fire extinguisher for their home, the neighbors benefit because a fire is less likely to spread to their houses. |
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Education generates three kinds of external benefits, what are they?
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1. Work externalities
2. Civic externalities 3. Crime externalites |
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It is sensible for the government to subsidize worker training and education because some of the benefits from training got to _____.
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other firms when workers change employers.
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What is public choice economics?
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A field of economics that uses models of rational choice to explore decision making in the public sector.
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What is the median-voter rule?
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The choices made by the government will match the preferences of the median voter.
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The self-interest theory of government explains why many states have limits on _____ and _____.
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property tax, government spending
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The social interest-theory of government suggests a government will approve and inefficient project if the cost of the project are paid by _____ (large/small) number of citizens and the benefits go to a _____ (large/small) number of citizens.
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large, small
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