Exam 17: Public Goods and Common Resources

Use the following to answer question: -(Table: Street Cleanings)Use Table: Street Cleanings.Suppose that the marginal cost of each street cleaning is $18.Which statement is TRUE?

Which example BEST fits the characteristics of a private good?

Assigning property rights helps correct the problems associated with common resources:

Airplane seats are rival in consumption.

Goods are said to be rival in consumption because they are substitutes in consumption,such as coffee and tea or road travel and air travel.

Encouragement of voluntary contributions to the provision of public goods:

Use the following to answer questions: Figure: Traffic Lights in Plymouth -(Figure: Traffic Lights in Plymouth)Use Figure: Traffic Lights in Plymouth.Plymouth has 1,000 residents.Each of the residents has the same individual marginal benefit per traffic light.If the town's population doubles and the new residents share the identical individual marginal benefit of the existing residents,the socially efficient quantity of traffic lights will:

Which example is considered a common resource?

(Scenario: Ben and Nik)Use Scenario: Ben and Nik.In the figure,Q₄: Scenario: Ben and Nik Ben and Nik are the only members of a community.They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known.In addition,the marginal social cost (MSC)of the public good is known and is constant.

An individual is MOST likely to be a free rider when a good is:

Use the following to answer question: Figure: Demand and Marginal Revenue -(Figure: Demand and Marginal Revenue)Use Figure: Demand and Marginal Revenue.The figure refers to a software upgrade.The producer incurred fixed costs of $10 million to produce the upgrade;the marginal cost of allowing consumers to download the upgrade is zero.What is the efficient price of the upgrade?

(Figure: Model of a Market for a Common Resource)Use Figure: Model of a Market for a Common Resource.The figure shows the intersection of the private supply and demand curves.Without any consideration of the marginal social cost of using a common resource,the quantity of the common resource used at Q will be: Figure: Model of a Market for a Common Resource

Which example is considered a public good?

Use the following to answer question: -(Table: Marginal Benefit,Cost,and Consumer Surplus)Use Table: Marginal Benefit,Cost,and Consumer Surplus.The table shows six consumers' willingness to pay for one iTunes download.If the marginal social cost is constant at _____,then _____ consumers will purchase this good,and consumer surplus is _____.

For a common resource,the marginal social benefit at the quantity provided by a private market is _____ the marginal social cost.

When goods are rival in consumption and excludable,perfectly competitive markets:

Since individuals ignore the effect of their use on the amount of a resource remaining for others,common resources are subject to overuse when left to the private market.

If at the quantity determined by private costs and benefits,the marginal social benefit of a public good is greater than the marginal social cost of providing the good:

One way the government of Alaska could prevent an inefficiently large production of crab fishing would be to:

The BEST example of a common resource(s)is/are: