A nonrival good is a good that
a. is produced by a monopoly.
b. is produced by a cartel.
c. can provide benefits to additional users at a zero marginal cost.
d. is sold in a single market.
QUESTION 2A nonexclusive good is a good that
a. is sold in low price markets.
b. is impossible to keep people from enjoying the benefits the good provides.
c. is produced by a perfectly competitive firm.
d. is produced at the lowest possible cost.
QUESTION 3If bargaining is costless, the assignment of property rights for an externality
a. has no impact on the possibility of an efficient outcome and no distributional impact.
b. has no impact on the possibility of an efficient outcome but does have a distributional impact.
c. does have an impact on the possibility of an efficient outcome but has no distributional impact.
d. does have an impact on the possibility of an efficient outcome and does have a distributional impact.
QUESTION 4Common property
a. is owned by specific people.
b. is inexhaustible.
c. refers strictly to land resource.
d. refers to goods owned by society at large and freely usable by anyone.
QUESTION 5Externalities between two firms can be internalized if: I. The two firms merge. II. Bargaining costs are zero. III. The externalities affect each firm equally. IV. Marginal costs for both firms are constant. Which statement(s) correctly complete(s) the sentence?
a. Only II.
b. All except III.
c. I and II, but not III and IV.
d. I and IV, but not II and III
QUESTION 6Bargaining costs are generally high in cases involving environmental externalities because
a. there are strong incentives to be a free rider.
b. many individuals may be affected by the externalities.
c. it is difficult to measure the costs of the externalities.
d. all of the above.
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