Question 1

Rational ignorance suggests that voters will

Accepted Answer

A) understand defence technology before voting for defence policy. 
B) understand the auditing procedures of the Canada Revenue Agency before voting for tax reform. 
C) understand the chemistry of the atmosphere before voting for a clean-air act. 
D) vote without complete information on many issues. 
E) vote based on their complete trust in politicians and bureaucrats. 
A) understand defence technology before voting for defence policy. 
B) understand the auditing procedures of the Canada Revenue Agency before voting for tax reform. 
C) understand the chemistry of the atmosphere before voting for a clean-air act. 
D) vote without complete information on many issues. 
E) vote based on their complete trust in politicians and bureaucrats.

Question 2

When a production quota is used to remedy the tragedy of the commons,then

Accepted Answer

A) the production quota is set so that use of the resource occurs where marginal private benefit equals marginal cost. 
B) the production quota is set so that use of the resource occurs where marginal private benefit equals marginal social benefit. 
C) the outcome is always efficient. 
D) all users of the resource have an incentive to cheat on the production quota. 
E) the production quota is set so that marginal social benefit is maximized. 
A) the production quota is set so that use of the resource occurs where marginal private benefit equals marginal cost. 
B) the production quota is set so that use of the resource occurs where marginal private benefit equals marginal social benefit. 
C) the outcome is always efficient. 
D) all users of the resource have an incentive to cheat on the production quota. 
E) the production quota is set so that marginal social benefit is maximized.

Question 3

The overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably is referred to as

Accepted Answer

A) unsustainable production. 
B) sustainable production. 
C) the tragedy of the commons. 
D) rational ignorance. 
E) irrational production. 
A) unsustainable production. 
B) sustainable production. 
C) the tragedy of the commons. 
D) rational ignorance. 
E) irrational production.

Question 4

The budget of a government department is likely to increase beyond the efficient quantity if

Accepted Answer

A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of social interest theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities. 
A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of social interest theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities.

Question 5

An example of a public good is

Accepted Answer

A) national defence. 
B) a Ford truck. 
C) a loaf of bread. 
D) a home computer. 
E) a television. 
A) national defence. 
B) a Ford truck. 
C) a loaf of bread. 
D) a home computer. 
E) a television.

Question 6

Use the figure below to answer the following questions.   Figure 16.3.2
-Figure 16.3.2 shows the marginal private cost cure,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.To achieve an efficient quantity,the price of an ITQ is set at

Accepted Answer

A) $7.50 per litre of milk. 
B) $2.00 per litre of milk. 
C) $6.00 per litre of milk. 
D) $1.50 per litre of milk. 
E) $4.40 per litre of milk. 
A) $7.50 per litre of milk. 
B) $2.00 per litre of milk. 
C) $6.00 per litre of milk. 
D) $1.50 per litre of milk. 
E) $4.40 per litre of milk.

Question 7

A view of the sunset is

Accepted Answer

A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good. 
A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good.

Question 8

If all voters are well informed about national defence,the quantity of national defence provided by the government will be

Accepted Answer

A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the efficient quantity. 
E) the quantity that maximizes the budget of the Department of National Defence. 
A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the efficient quantity. 
E) the quantity that maximizes the budget of the Department of National Defence.

Question 9

Suppose in a country there are only two persons.Person A is willing to pay $50 to have one unit of a public good produced;person B is willing to pay $60 to have one unit of a public good produced and $50 to have two units produced.A point on the country's marginal social benefit curve for this public good is a price of ________ and quantity demanded of ________.

Accepted Answer

A) $50;1 unit 
B) $60;1 unit 
C) $110;2 units 
D) $110;1 unit 
E) $55;1 unit 
A) $50;1 unit 
B) $60;1 unit 
C) $110;2 units 
D) $110;1 unit 
E) $55;1 unit

Question 10

For a common resource,the marginal private cost curve slopes ________ and the marginal social cost curve slopes ________.

Accepted Answer

A) upward;upward 
B) upward;downward 
C) downward;upward 
D) downward;downward 
E) upward or downward;in the same direction as the marginal private cost curve 
A) upward;upward 
B) upward;downward 
C) downward;upward 
D) downward;downward 
E) upward or downward;in the same direction as the marginal private cost curve

Question 11

Use the figure below to answer the following questions.   Figure 16.3.2
-Figure 16.3.2 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.A quota that results in the common resource being used efficiently is set at

Accepted Answer

A) 0 goats. 
B) 35 goats. 
C) 50 goats. 
D) 55 goats. 
E) 40 goats. 
A) 0 goats. 
B) 35 goats. 
C) 50 goats. 
D) 55 goats. 
E) 40 goats.

Question 12

A good that is rival and nonexcludable is a

Accepted Answer

A) private good. 
B) public good. 
C) government good. 
D) regulated good. 
E) common resource. 
A) private good. 
B) public good. 
C) government good. 
D) regulated good. 
E) common resource.

Question 13

Which one of the following goods exhibits nonexcludability?

Accepted Answer

A) a cheeseburger 
B) the Internet 
C) rides on the U.S.Space Shuttle 
D) cable TV 
E) air traffic control 
A) a cheeseburger 
B) the Internet 
C) rides on the U.S.Space Shuttle 
D) cable TV 
E) air traffic control

Question 14

Which of the following quotations describes a rival good?

Accepted Answer

A) "Mom,Ashley is looking at me." 
B) "Mom,Morgan won't let me watch the Backyardigans because she is watching Dora the Explorer." 
C) "Mom,Harrison won't let me in his room." 
D) "Mom,Taylor told me on the phone that he is also watching the Backyardigans on TV at his house." 
E) "Mom said everyone in this house gets to enjoy the flowers in the garden." 
A) "Mom,Ashley is looking at me." 
B) "Mom,Morgan won't let me watch the Backyardigans because she is watching Dora the Explorer." 
C) "Mom,Harrison won't let me in his room." 
D) "Mom,Taylor told me on the phone that he is also watching the Backyardigans on TV at his house." 
E) "Mom said everyone in this house gets to enjoy the flowers in the garden."

Question 15

Governments provide public goods such as national defence because

Accepted Answer

A) governments are more efficient than private firms at producing public goods. 
B) of the free-rider problem,which results in underproduction by private firms. 
C) people do not value national defence very highly. 
D) of the potential that private firms will make excess profit. 
E) of external costs. 
A) governments are more efficient than private firms at producing public goods. 
B) of the free-rider problem,which results in underproduction by private firms. 
C) people do not value national defence very highly. 
D) of the potential that private firms will make excess profit. 
E) of external costs.

Question 16

A Canada Day fireworks display

Accepted Answer

A) does not have a free-rider problem. 
B) has a free-rider problem that cannot be eliminated. 
C) has a free-rider problem that can be eliminated by using taxes paid by area residents to finance the display. 
D) is a private good. 
E) is a natural monopoly good. 
A) does not have a free-rider problem. 
B) has a free-rider problem that cannot be eliminated. 
C) has a free-rider problem that can be eliminated by using taxes paid by area residents to finance the display. 
D) is a private good. 
E) is a natural monopoly good.

Rational ignorance suggests that voters will

When a production quota is used to remedy the tragedy of the commons,then

The overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably is referred to as

The budget of a government department is likely to increase beyond the efficient quantity if

An example of a public good is

Use the figure below to answer the following questions. Figure 16.3.2 -Figure 16.3.2 shows the marginal private cost cure,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.To achieve an efficient quantity,the price of an ITQ is set at

A view of the sunset is

If all voters are well informed about national defence,the quantity of national defence provided by the government will be

For a common resource,the marginal private cost curve slopes and the marginal social cost curve slopes .

Use the figure below to answer the following questions. Figure 16.3.2 -Figure 16.3.2 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.A quota that results in the common resource being used efficiently is set at

A good that is rival and nonexcludable is a

Which one of the following goods exhibits nonexcludability?

Which of the following quotations describes a rival good?

Governments provide public goods such as national defence because

A Canada Day fireworks display

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Filters

Exam 16: Public Goods and Common Resources

Rational ignorance suggests that voters will

When a production quota is used to remedy the tragedy of the commons,then

The overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably is referred to as

The budget of a government department is likely to increase beyond the efficient quantity if

An example of a public good is

Use the figure below to answer the following questions. Figure 16.3.2 -Figure 16.3.2 shows the marginal private cost cure,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.To achieve an efficient quantity,the price of an ITQ is set at

A view of the sunset is

If all voters are well informed about national defence,the quantity of national defence provided by the government will be

For a common resource,the marginal private cost curve slopes ________ and the marginal social cost curve slopes ________.

Use the figure below to answer the following questions. Figure 16.3.2 -Figure 16.3.2 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.A quota that results in the common resource being used efficiently is set at

A good that is rival and nonexcludable is a

Which one of the following goods exhibits nonexcludability?

Which of the following quotations describes a rival good?

Governments provide public goods such as national defence because

A Canada Day fireworks display

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Filters

For a common resource,the marginal private cost curve slopes and the marginal social cost curve slopes .