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Multiple-choice questions:
Understating one’s valuation of public goods in order to reduce the tax bill, is an example of:
- the paradox of thrift;
- the prisoner’s dilemma;
- the free-rider problem;
- perverse demand;
- disincentive effects.
Community goods cause instances of market failure because:
- it is difficult to determine the optimal quantity of a community good;
- there is no effective demand for community goods;
- people will never pay for community goods;
- no method of payment for community goods can be devised;
- none of the above.
Housing, in economic terms, can be regarded as:
- a merit good;
- a public good;
- a Giffen good;
- an inferior good;
- a service.
Which of the following is not a method of financing public provision of goods and services:
- government borrowing;
- taxation;
- user charges;
- licence fees;
- market pricing.
Privatisation does not lead to:
- increased government revenue;
- improved efficiency;
- increased government intervention;
- wider share ownership;
- more competition.