Exam 17: Public Goods and Common Resources

Which good is MOST likely a common resource?

Common resources tend to be _____ in private markets.

For a good to be efficiently provided by the private market,it must be:

For a public good,the marginal social benefit will be higher than any individual's marginal benefit of consumption.

For a nonexcludable good like national defense,the private market will lead to _____ of the good.

Use the following to answer question: Figure: Market Failure -(Figure: Market Failure)Use Figure: Market Failure.In the figure,the equilibrium price is _____,and the equilibrium quantity is _____ for a competitive market.

Which example is considered an artificially scarce good?

Every few months,public radio announces a call for pledge support.During this time,it asks listeners to contribute to their local public radio station.Although they raise money during this time,it often falls short of the amount they wish to raise because:

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.What is the marginal social benefit from four units of the public good?

Clean water in a river is nonexcludable because:

Which example is considered a nonexcludable good?

A common resource is a good or service for which exclusion is _____ and that is _____ in consumption.

The best example of a good whose consumption is NOT excludable is:

Which example best illustrates a good whose consumption is NOT excludable?

Volunteer fire departments are good examples of the _____ provision of _____.

_____ are a good that is rival in consumption and nonexcludable.

If a good has a marginal cost of production of zero and an inefficiently low level of consumption,the good must be a(n):

In a market economy,goods that are nonrival in consumption are subject to inefficiently low production.

Fish in a public lake are common resources because the private market _____ prevent consumption by people who do not pay for access to fish.Further,the same fish _____ be consumed more than once.

(Scenario: Alexander and Vanessa)Use Scenario: Alexander and Vanessa.If the socially optimal level of scientific research is produced and if both Vanessa and Alexander are truthful in disclosing the marginal private benefits they expect to receive from this research,what is the price per unit of research that Vanessa is willing to pay at the social optimum? Scenario: Alexander and Vanessa Alexander and Vanessa benefit from scientific research.Alexander's marginal private benefit from such research is given by the equation MPB = 200 - Q,where Q refers to the amount of research undertaken and MPB captures the marginal private benefit Alexander gets from different marginal quantities.Meanwhile,Vanessa's marginal private benefit from such research is given by the equation MPB = 100 - Q.The marginal social cost of such research is constant at $100.