What does non-rivalrous mean?

One person's use does not reduce its availability to others.

Which of the following is an example of a negative externality?

A factory polluting a river, affecting local fishermen.

Which of the following is a positive externality of planting trees in urban areas?

The trees absorb CO₂ and improve air quality.

What is a positive externality of education?

Improved quality of government due to higher literacy.

What is the free-rider problem?

When someone benefits from a good without paying for it.

What is a key characteristic of a public good?

It is both non-excludable and non-rivalrous.

What is the social cost of aluminum production in the context of negative externalities?

The total cost of aluminum production, including pollution.

How can governments correct the excess production of aluminum due to its negative externalities?

By taxing producers to account for pollution costs.

What is the definition of an externality?

The impact of an economic activity on a third party.

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EXTERNALTIES - PUBLIC GOODS

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Answers

1
What does non-rivalrous mean?
The good can be sold to the highest bidder only.
People can be easily excluded from its use.
It can only be provided by the government.
One person's use does not reduce its availability to others.
2
Which of the following is an example of a negative externality?
A student attending school to gain personal knowledge.
A company planting trees to improve the aesthetic of the area.
A government subsidizing education to improve literacy rates.
A factory polluting a river, affecting local fishermen.
3
Which of the following is a positive externality of planting trees in urban areas?
The business owner benefits from increased property value.
The trees absorb CO₂ and improve air quality.
The trees attract more customers to the area.
The cost of maintenance is lower.
4
What is a positive externality of education?
Improved quality of government due to higher literacy.
Decreased productivity in the workforce.
Higher wages for individuals who complete their education.
Higher crime rates due to less education.
5
What is the free-rider problem?
When private companies overcharge for public goods.
When a person refuses to use a public good.
When someone benefits from a good without paying for it.
When individuals pay more than the actual cost of a public good.
6
What is a key characteristic of a public good?
It is both non-excludable and non-rivalrous.
It is always provided by private companies.
It is consumed by only a few people at a time.
It requires direct payment for access.
7
What is the social cost of aluminum production in the context of negative externalities?
The total cost of aluminum production, including pollution.
The personal expenses of aluminum producers.
The financial gain from aluminum exports.
The cost of aluminum to consumers.
8
Which of the following is an example of a non-excludable good?
A public park
A private swimming pool
A movie ticket at a private cinema
A subscription-based streaming service
9
How can governments correct the excess production of aluminum due to its negative externalities?
By taxing producers to account for pollution costs.
By encouraging consumers to purchase more aluminum products.
By imposing tariffs on aluminum imports.
By offering subsidies to aluminum producers.
10
What is the definition of an externality?
The direct cost of a business activity on its producer.
The impact of an economic activity on a third party.
The taxes imposed by the government on businesses.
The financial transaction involved in an economic activity.

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