Classification of Goods and Services
88 questions· page 1 of 9
Which goods are least likely to be allocated by market forces in a mixed economy?
Options
A hospitals
B railways
C street lighting
D television programmes
How can a public good become a private good?
Options
A Consumers are dissatisfied with the performance of state-run services.
B New technological developments make the good excludable.
C The government privatises the industry producing the good.
D The price of the good increases so it becomes more profitable.
What is a statement of the non-rivalrous nature of public goods?
Options
A It is not possible to stop a non-payer from using the product.
B One person consuming the product does not reduce the amount of it available to others.
C People consume too little of the product because they are unaware of its true benefits.
D There is an unlimited supply of the product.
Why might governments provide free education for children aged 4 to 16 years old?
Options
A Consumers are not fully aware of the benefits of education.
B Education in a free market system would be over consumed.
C Education is a public good and there would be many free riders.
D The private costs of education exceed the private benefits in a free market.
A tourist visits a government-owned tropical beach. She pays $10 to enter but finds it overcrowded.
Which type of good is the beach?
Options
A a free good
B an inferior good
C a public good
D a private good
Which row correctly identifies goods that would be expected to be produced in a mixed economy?
Options
| goods that are excludable and rival in consumption | goods that are non-excludable and non-rival in consumption | goods that have private and external benefits | |
|---|---|---|---|
| A | ✓ | ✓ | ✓ |
| B | ✓ | ✓ | ✗ |
| C | ✓ | ✗ | ✓ |
| D | ✗ | ✗ | ✓ |
A flood-control dam is an example of a good provided directly by a government.
Which statement relating to the direct provision of a flood-control dam is not correct?
Options
A It allows the government to tackle the failure to provide public goods.
B It forces the government to incur an opportunity cost.
C It involves the supply of a merit good.
D It is an example of government allocation of resources.
Under which conditions are free market forces most likely to allocate resources efficiently in an economy?
Options
| demerit goods | merit goods | public goods | |
|---|---|---|---|
| A | a few | a few | a few |
| B | many | many | a few |
| C | none | many | none |
| D | none | none | none |
A city built a new stadium to host the World Athletics championships. The city authorities also ensured clean air by closing factories and making their workers unemployed during the championships.
Which part of this is an example of non-rival consumption?
Options
A The improved air quality also benefited those who did not have to pay for it.
B The private costs and external costs were borne by the city authorities.
C The stadium could be used after the championships.
D The unemployed factory workers were entitled to free tickets to the stadium.
What is an example of a public good?
Options
A A ferry that takes members of the public across a river.
B A fish farm that is owned by the government.
C A fishing boat that is owned by all members of a village.
D A lighthouse that warns boats of dangerous rocks.