Exam 17: Public Goods and Common Resources

Producers of artificially scarce goods face _____ that are similar to those of natural monopolists;they decline over the relevant range of output.

Imposing a Pigouvian tax on a good,establishing a system of tradable licenses,and assigning property rights are methods to alleviate the problems associated with:

Public goods differ from common resources in that,while both are _____,public goods are _____,while common resources are _____.

Economic policymaking is _____ in consumption and _____.

Use the following to answer question: Figure: Market Failure -(Figure: Market Failure)Use Figure: Market Failure.Suppose that the supply curve represents the marginal cost of providing streetlights in a neighborhood where only two people,Ann and Joe,reside.The demand curve represents the marginal benefit that Ann receives from the streetlights.Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to the vertical distance A-C.If Ann is the only person to pay for the streetlights,how many lights will be provided?

A public good is one that is generally available for consumption by the public;that is,a person does not have to be a member of a special group or a club to be able to consume it.A good example would be milk for sale in a grocery store that is open to the public.

Use the following to answer question: -(Table: Marginal Benefit from Additional Streetlights)Use Table: Marginal Benefit from Additional Streetlights.Suppose that the marginal cost of installing a streetlight is $6.If Dave had to pay for streetlights on his own,how many streetlights would there be?

The source of inefficiency in the use of artificially scarce goods is similar to the source of inefficiencies created by:

An e-book is similar to a published book in that it is _____,but it is also similar to national defense in that it is _____.

When Joe watches a movie on Netflix,his viewing is _____ in consumption because other people _____ able to watch the movie at the same time as Joe does.

Public goods should be provided to the point at which the marginal cost of production equals:

Which example is considered a private good?

Use the following to answer question: Figure: Market Failure -(Figure: Market Failure)Use Figure: Market Failure.In the figure,if production in this competitive market is at quantity F:

An example of a common resource is:

Consumption of a common resource is inefficiently too _____ because the marginal social cost of the resource is _____ than the private marginal cost.

A characteristic of public goods is that:

After many years,a small community builds a toll road but discovers that it is not used very much.If it wishes for the road to be used at the socially optimal level,the community should:

(Scenario: Ben and Nik)Use Scenario: Ben and Nik.At all levels of provision of the public good: 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.

Use the following to answer question: -(Table: Total Cost and Total Individual Benefit)Use Table: Total Cost and Total Individual Benefit.Assume there are 1,000 residents and they all have the same total individual benefit,as shown in the table.If the residents acted together,how many officers would they hire?

Television programs are nonrival because: