Chapter 9 Market Failure: Imperfect Information, External Benefits, and External Costs

| November 9, 2018

39)
An appeal to peoples’ sense of civic or moral responsibility will ________ the
free-rider problem and lead to a ________ level of contribution to the public
good.
A)
increase; smaller
B)
increase; larger
C)
reduce; smaller
D)
reduce; larger

40)
Offering contributors private goods such as coffee mugs, books, or magazine
subscriptions will ________ the free-rider problem and lead to a ________ level
of contribution to the public good.
A)
reduce; smaller
B)
reduce; larger
C)
increase; smaller
D)
increase; larger

41)
Arranging matching charitable contributions will ________ the free-rider
problem and lead to a ________ level of contribution to the public good.
A)
increase; smaller
B)
increase; larger
C)
reduce; smaller
D)
reduce; larger

42)
A charity that used to make an appeal to peoples’ sense of civic or moral
responsibility, but no longer does, is likely to ________ the free-rider
problem and lead to a ________ level of contribution to the public good.
A)
reduce; smaller
B)
reduce; larger
C)
increase; smaller
D)
increase; larger

43)
A charity that used to offer contributors private goods such as coffee mugs,
books, or magazine subscriptions, but no longer does, is likely to ________ the
free-rider problem and lead to a ________ level of contribution to the public
good.
A)
increase; smaller
B)
increase; larger
C)
reduce; smaller
D)
reduce; larger

44)
A charity that used to arrange matching charitable contributions, but no longer
does, is likely to ________ the free-rider problem and lead to a ________ level
of contribution to the public good.
A)
reduce; smaller
B)
reduce; larger
C)
increase; smaller
D)
increase; larger

45)
Public Broadcasting, in its fund drives, often appeals to viewers by saying,
“without you, there will be no Big Bird.” This is likely to ________
the free-rider problem and lead to a ________ level of contribution to the
public good.
A)
increase; smaller
B)
increase; larger
C)
reduce; smaller
D)
reduce; larger

46)
Public Broadcasting, in its fund drives, often arranges for a corporation to
match donations made by its employees. This is likely to ________ the
free-rider problem and lead to a ________ level of contribution to the public
good.
A)
reduce; smaller
B)
reduce; larger
C)
increase; smaller
D)
increase; larger

47)
Public Broadcasting reads the names of local contributors on the air. This is
likely to ________ the free-rider problem and lead to a ________ level of
contribution to the public good.
A)
increase; smaller
B)
increase; larger
C)
reduce; smaller
D)
reduce; larger

48)
When private goods have external benefits
A)
marginal social cost is greater than marginal private cost.
B)
marginal privates cost is greater than marginal social cost.
C)
marginal social benefit is greater than marginal private benefit.
D)
marginal private benefit is greater than marginal social benefit.

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