Exam 17: Public Goods and Common Resources

Suppose the Alaskan king crab harvest is unregulated and any person with a crab boat and some diesel fuel can go offshore,lower a crab pot,and harvest king crab.As a result,this common resource is overused.Which policy choice might produce the socially optimal king crab harvest?

A public good is _____ and _____ in consumption.

The BEST example of a good that is excludable in consumption is:

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.Without government intervention,the town will have _____ traffic lights.

When comparing the characteristics of common resources and artificially scarce goods,we find that:

A small public park in a large town with many other parks often has very few visitors because of its size.There is no fee to enter the park,but few people visit it since other parks have more amenities.This park is _____ in consumption and _____.

If the marginal social benefit received from a good is greater than the marginal social cost of production:

Which good is MOST likely a public good?

National defense and clean air are similar in that both are _____,but they differ in that clean air is _____,while national defense is not.

If a good is nonrival in consumption and a positive price is charged by the supplier:

Use the following to answer question: Figure: An Individual's Marginal Benefit from a Public Good -(Figure: An Individual's Marginal Benefit from a Public Good)Use Figure: An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good;each individual has the marginal benefit curve shown in the figure.If the marginal cost of the good is $24,how many units of this public good would maximize society's welfare?

The efficient level of provision of a public good is the level at which its marginal social benefit is equal to the marginal social cost of its production.

Use the following to answer question: Figure: An Individual's Marginal Benefit from a Public Good -(Figure: An Individual's Marginal Benefit from a Public Good)Use Figure: An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good;each individual has the marginal benefit curve shown in the figure.If the marginal cost of the good is $8,how many units of this public good will maximize society's welfare?

If the marginal social benefit received from a good is less than the marginal social cost of production:

If a good is subject to the free-rider problem and an inefficiently high level of consumption,the good must be a(n):

The BEST example of a public good is:

When a good is nonrival in consumption,its MOST efficient price is:

In the United Kingdom,most public television programming is paid for by a yearly license fee assessed on every household.Television detection vans go through neighborhoods to detect unlicensed households and keep them from viewing without paying.This is a good example of the _____ provision of _____.

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 $0,then the efficient price is _____ and consumer surplus is _____.

Suppose the town of Falls Valley has a mosquito problem.After a bad summer,the town accountants explain that the marginal cost of providing one more treatment for mosquito control is $100,000.The town should provide the additional mosquito control only if the marginal: