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AP Microeconomics Positive Externalities and Public Goods — practice questions

Explore 21 free Positive Externalities and Public Goods questions in AP Microeconomics Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Positive Externalities and Public Goods questions and exercises with answers

Showing questions 1–21 of 21.

The two defining characteristics of a public good are non-rival and:Read the answer and worked solution →A piece of pizza is used as the standard example of:Read the answer and worked solution →Radio stations, tornado sirens, lighthouses and street lights are all examples of:Read the answer and worked solution →New knowledge often becomes what economists refer to as:Read the answer and worked solution →The difficulty private companies face in supplying public goods is called the:Read the answer and worked solution →The most prominent example given of a positive externality is:Read the answer and worked solution →One way to encourage new technology is to guarantee the innovator an exclusive right through:Read the answer and worked solution →A private good like a slice of pizza differs from a public good because it is:Read the answer and worked solution →A street light is non-rival because one person benefiting from it:Read the answer and worked solution →Technology is described as a positive externality but explicitly not:Read the answer and worked solution →Because new knowledge behaves as a public good, the private sector tends to:Read the answer and worked solution →The free rider problem arises specifically from which property of a public good?Read the answer and worked solution →Intellectual property rights work by converting an idea from a public good into something:Read the answer and worked solution →A tornado siren cannot be sold like a private good because the supplier cannot:Read the answer and worked solution →Comparing a slice of pizza with a lighthouse beam shows that the pizza is:Read the answer and worked solution →The reason technology counts as a positive externality is that its benefits reach:Read the answer and worked solution →Private good or public good?Read the answer and worked solution →Match each public goods termRead the answer and worked solution →True or false: public goodsRead the answer and worked solution →Which property does it show?Read the answer and worked solution →Complete the public goods ruleRead the answer and worked solution →

Worked practice questions

The two defining characteristics of a public good are non-rival and:

  1. Nonexcludable
  2. Nonperishable
  3. Nontransferable
  4. Nonrenewable
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Correct answer: A. Nonexcludable

1. A public good is defined by how it can be consumed, not by who supplies it. 2. Public goods have two defining characteristics. 3. They are nonexcludable and non-rival. 4. Nonexcludable means you cannot stop non-payers from consuming it. _Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 13 'Positive Externalities and Public Goods', sections 13.1-13.4_

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A piece of pizza is used as the standard example of:

  1. An intellectual property
  2. An ordinary private good
  3. A pure public good
  4. A positive externality
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Correct answer: B. An ordinary private good

1. Public goods are explained by contrast with something familiar. 2. To understand the defining characteristics of a public good, first consider an ordinary private good, like a piece of pizza. 3. A slice eaten by one person cannot be eaten by another, so it is rival. 4. The seller can also refuse it to anyone who does not pay, so it is excludable. _Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 13 'Positive Externalities and Public Goods', sections 13.1-13.4_

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Radio stations, tornado sirens, lighthouses and street lights are all examples of:

  1. Inferior goods
  2. Luxury goods
  3. Public goods
  4. Private goods
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Correct answer: C. Public goods

1. The same two properties recur across a wide range of things. 2. Radio stations, tornado sirens, light houses, and street lights are all public goods. 3. They qualify in that all are nonrivalrous and nonexclusionary. 4. One person tuning in does not use up the signal for anyone else. _Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 13 'Positive Externalities and Public Goods', sections 13.1-13.4_

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