A . What is the difference between a pure public good and a near-public good? b. Are streets pure public goods or near-public goods?
a . The use of a pure public good does not reduce others' use of it. The use of a near-public good does,
after some point, reduce the amount or quality of it available for use by others. Also, people cannot
be excluded from consuming a pure public good, but they can be excluded from consuming a near-
public good.
b. Streets are near-public goods, to the extent that it is possible to convert them to toll roads where non-
payers are excluded from using them. Also, as more and more people use a given street, it becomes
congested, reducing others' use of it.
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Which of the following is not included in the current account of a nation's balance of payments?
A) Its goods exports. B) Its goods imports. C) Its net investment income. D) Its purchases of real assets abroad.
Suppose the federal excise tax rate on gasoline is increased by 50 percent. Which of the following is the most likely impact on the tax revenue derived from the federal gas tax?
a. Tax revenues will increase by less than 50 percent. b. Tax revenues will increase by 50 percent. c. Tax revenues will increase by more than 50 percent. d. The revenue from the gasoline tax will go to zero.