1			A public good is a good that is:
			A)	Rival and excludable
			B)	Non-rival and excludable
			C)	Rival and non-excludable
			D)	Non-rival and non-excludable
2			A slice of pizza is:
			A)	Rival
			B)	Non-rival
			C)	Non-excludable
			D)	Both a and c
3			The benefit of an additional unit of a public good is:
			A)	The highest price someone would pay for it
			B)	The lowest price someone would pay for it
			C)	The sum of the reservation price of all the people who use it
			D)	None of the above
4			If the benefit of a public good does not exceed its cost:
			A)	The government should not provide the good
			B)	The government should provide the good
			C)	The government is indifferent
			D)	None of the above
5			A tax that collects the same amount from every tax payer is known as a__________, and is a__________tax.
			A)	Head tax; progressive
			B)	Head tax; regressive
			C)	Head tax; proportional
			D)	Progressive tax; proportional
6			The tax system that provides a better outcome for all groups in the provision of a public good is:
			A)	Progressive tax system
			B)	Proportional tax system
			C)	Regressive tax system
			D)	Head tax system
7			To find the benefit of an additional unit of a public good, we sum the individual demand curves:
			A)	Horizontally
			B)	Vertically
			C)	Diagonally
			D)	None of the above

Use the following information to answer questions 8 and 9:

Two roommates are planning to spend an evening watching movies, and have to decide how many movies to watch. Their willingness to pay (in USD) for the rental of each movie is as follows:

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8			The marginal benefit from renting the third movie is:
			A)	USD 9
			B)	USD 8
			C)	USD 4
			D)	USD 3
9			If the cost of one movie is $10, how many movies should the roommates rent?
			A)	Four movies
			B)	Three movies
			C)	Two movies
			D)	One movie
10			Which of the following is not an advantage of government provision of public goods?
			A)	Low cost of collecting additional revenue
			B)	Expedient provision of public goods
			C)	Only feasible provider of public goods
			D)	One size fits all
11			Private provision of public goods can take place through:
			A)	Funding by donation
			B)	Private contracting
			C)	Sale of by products
			D)	All of the above
12			Making customers pay per use of the public good is inefficient since:
			A)	It results in deadweight loss
			B)	MC of the use of the public good once provided is zero
			C)	It uses willingness to pay as a measure of preferences
			D)	Both a and b
13			When an externality exists, the best outcome is for the government:
			A)	To never regulate it
			B)	To always regulate it
			C)	To regulate it only if the inefficiency created by the externality exceeds regulation costs
			D)	None of the above
14			If a project has a total cost of USD175mn and a total benefit of USD125mn, the government:
			A)	Will undertake the project, as benefit exceeds cost
			B)	Might undertake the project, known as pork barrel spending
			C)	Will not undertake the project at all
			D)	None of the above
15			Crowding out refers to:
			A)	The reduction in private investment caused by increases in interest rates from government borrowing
			B)	The reduction in government borrowing caused by increases in interest rates from private investment
			C)	The increase in private investment caused by decreases in interest rates from government lending
			D)	The increase in government borrowing caused by decreases in interest rates from private lending