Questions as text
Q1 · A lighthouse is considered to be a public good 9708/11 May/June 2006
16 A lighthouse is considered to be a public good. Which characteristic contributes to this? A It gives external benefit. B It causes external cost. C It is non-excludable. D There is rivalry in its use.
1 marks
Answer: C
This question in 9708/11 May/June 2006
Q2 · What will be the result, from society’s view, if the market price for a product does not… 9708/11 May/June 2008
14 What will be the result, from society’s view, if the market price for a product does not reflect the negative externalities in its production? A too much consumption and too much production B too much consumption and too little production C too little consumption and too little production D too little consumption and too much production
1 marks
Answer: A
This question in 9708/11 May/June 2008
Q3 · A good is most suitable to be provided by the market if it is A excludable and non-rival 9708/11 May/June 2008
17 A good is most suitable to be provided by the market if it is A excludable and non-rival. B excludable and rival. C non-excludable and non-rival. D non-excludable and rival.
1 marks
Answer: B
This question in 9708/11 May/June 2008
Q4 · Why does the production of public goods have to be financed by the government? 9708/11 May/June 2009
17 Why does the production of public goods have to be financed by the government? A One person’s consumption of a public good means it is not available for anyone else. B People are able to consume public goods without paying for them. C Private sector firms will charge a price significantly above cost for public goods. D The cost of producing public goods is higher in the private sector.
1 marks
Answer: B
This question in 9708/11 May/June 2009
Q5 · What would cause a failure of the market mechanism’s rationing function? 9708/12 Oct/Nov 2009
12 What would cause a failure of the market mechanism’s rationing function? A falling prices B price controls C rising profits D self interest
1 marks
Answer: B
This question in 9708/12 Oct/Nov 2009
Q6 · What is a distinguishing feature of a public good that is not found with private goods? 9708/11 May/June 2011
17 What is a distinguishing feature of a public good that is not found with private goods? A Consumption depends on the ability to pay. B It creates negative externalities. C Its consumption by one consumer can have an effect on other consumers. D Its consumption by one consumer does not restrict consumption by other consumers.
1 marks
Answer: D
This question in 9708/11 May/June 2011
Q7 · What is a distinguishing feature of a public good that is not found with private goods? 9708/13 May/June 2011
15 What is a distinguishing feature of a public good that is not found with private goods? A Consumption depends on the ability to pay. B It creates negative externalities. C Its consumption by one consumer can have an effect on other consumers. D Its consumption by one consumer does not restrict consumption by other consumers.
1 marks
Answer: D
This question in 9708/13 May/June 2011
Q8 · A government admits that building a new bridge would produce a positive net benefit to… 9708/12 Oct/Nov 2011
16 A government admits that building a new bridge would produce a positive net benefit to society. Owing to a lack of public funds, the bridge would have to be built and operated by a private company, that would charge the public to use the bridge. Private companies insist that building the bridge would not be profitable. What could explain the companies’ unwillingness to build the bridge? A A private company will be unable to obtain the consumer surplus of the users. B Building the bridge will give rise to negative externalities. C The demand for bridge crossings is price-inelastic. D The potential benefits are non-excludable.
1 marks
Answer: A
This question in 9708/12 Oct/Nov 2011
Q9 · What will be the result, from society’s view, if the market price for a product does not… 9708/12 Oct/Nov 2012
15 What will be the result, from society’s view, if the market price for a product does not reflect the negative externalities in its production? A too little consumption and too little production B too little consumption and too much production C too much consumption and too little production D too much consumption and too much production
1 marks
Answer: D
This question in 9708/12 Oct/Nov 2012
Q10 · What is a defining characteristic of a public good? 9708/13 Oct/Nov 2012
17 What is a defining characteristic of a public good? A An increase in consumption by one individual leaves the quantity available to others unchanged. B Consumption of the good by one individual confers benefits on other individuals. C The benefits obtained by those who consume the good are greater than they themselves realise. D The good is consumed jointly by all members of society.
1 marks
Answer: A
This question in 9708/13 Oct/Nov 2012
Q11 · A good is more likely to be supplied by the government rather than a private company if… 9708/11 May/June 2013
16 A good is more likely to be supplied by the government rather than a private company if it is A excludable and non-rival. B excludable and rival. C non-excludable and non-rival D non-excludable and rival
1 marks
Answer: C
This question in 9708/11 May/June 2013
Q12 · One definition of a merit good is that it is one that will be underconsumed because of… 9708/11 Oct/Nov 2013
16 One definition of a merit good is that it is one that will be underconsumed because of poor decision making. Who would usually be responsible for this poor decision making? A the consumers of the good B the dealers who trade the good C the firms producing the good D the government
1 marks
Answer: A
This question in 9708/11 Oct/Nov 2013
Q13 · What will be the result, from society’s view, if the market price for a product does not… 9708/12 Oct/Nov 2013
15 What will be the result, from society’s view, if the market price for a product does not reflect the positive externalities in its production? A too little consumption and too little production B too little consumption and too much production C too much consumption and too little production D too much consumption and too much production
1 marks
Answer: A
This question in 9708/12 Oct/Nov 2013
Q14 · A good is produced which consumers are unable to avoid consuming 9708/12 Oct/Nov 2013
16 A good is produced which consumers are unable to avoid consuming. What type of good is this? A demerit good B inferior good C private good D public good
1 marks
Answer: D
This question in 9708/12 Oct/Nov 2013
Q15 · A good is most suitable to be provided by the market if it is A excludable and non-rival 9708/11 Oct/Nov 2014
17 A good is most suitable to be provided by the market if it is A excludable and non-rival. B excludable and rival. C non-excludable and non-rival. D non-excludable and rival.
1 marks
This question in 9708/11 Oct/Nov 2014
Q16 · A national museum charges an entry fee for admission 9708/12 May/June 2015
17 A national museum charges an entry fee for admission. Which combination of rival and excludable qualities would apply to visits to the national museum on a day when there are very few visitors? rival excludable A no no B no yes C yes no D yes yes
1 marks
Answer: B
This question in 9708/12 May/June 2015
Q17 · What will result from a government’s decision to allow health care to be provided… 9708/14 May/June 2022
1 What will result from a government’s decision to allow health care to be provided entirely by market forces? A There will be a reduction in the provision of a public good. B All consumers will receive better health care. C Market failure will be eliminated in the health care market. D The health care market will reach an equilibrium.
1 marks
Answer: D
This question in 9708/14 May/June 2022
Q18 · Some goods are over-consumed in a market economy 9708/12 Oct/Nov 2023
6 Some goods are over-consumed in a market economy. What is likely to be the cause of this? A Consumer surplus exceeds producer surplus. B Consumers undervalue the benefits of consuming the goods. C There is excess supply in the market for the goods. D There is imperfect information in the market.
1 marks
Answer: D
This question in 9708/12 Oct/Nov 2023
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