Question 1

Cable television and air-traffic control are similar to each other because both of them are

Accepted Answer

A) excludable. 
B) nonexcludable. 
C) nonrival. 
D) rival. 
E) private services. 
A) excludable. 
B) nonexcludable. 
C) nonrival. 
D) rival. 
E) private services. C

Question 2

Use the figure below to answer the following questions.
   Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The equilibrium in an unregulated market is

Accepted Answer

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

Question 3

The efficient use of a common resource requires that the ________ equals the ________.

Accepted Answer

A) marginal private benefit;marginal social cost 
B) marginal social benefit;marginal social cost 
C) marginal private benefit;marginal social benefit 
D) marginal social cost;marginal private cost 
E) total benefit;total cost 
A) marginal private benefit;marginal social cost 
B) marginal social benefit;marginal social cost 
C) marginal private benefit;marginal social benefit 
D) marginal social cost;marginal private cost 
E) total benefit;total cost B

Question 4

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 5

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

Accepted Answer

A) the production quota is set so that use of the resource is where marginal private benefit equals marginal cost. 
B) the production quota is set so that use of the resource is where marginal private benefit equals marginal social benefit. 
C) the market equilibrium,but not the efficient outcome,is achieved. 
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 is where marginal private benefit equals marginal cost. 
B) the production quota is set so that use of the resource is where marginal private benefit equals marginal social benefit. 
C) the market equilibrium,but not the efficient outcome,is achieved. 
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 6

A common resource is

Accepted Answer

A) regulated and excludable. 
B) rival and nonexcludable. 
C) nonrival and excludable. 
D) rival and excludable. 
E) nonrival and nonexcludable. 
A) regulated and excludable. 
B) rival and nonexcludable. 
C) nonrival and excludable. 
D) rival and excludable. 
E) nonrival and nonexcludable.

Question 7

The tragedy of the commons is the absence of incentives to

Accepted Answer

A) reduce marginal cost of common resources. 
B) prevent underuse of common resources. 
C) prevent overuse of common resources. 
D) discover new common resources. 
E) export wool in sixteenth-century England. 
A) reduce marginal cost of common resources. 
B) prevent underuse of common resources. 
C) prevent overuse of common resources. 
D) discover new common resources. 
E) export wool in sixteenth-century England.

Question 8

An economy's marginal social benefit curve for a private good is obtained by summing the individual marginal

Accepted Answer

A) cost curves horizontally. 
B) cost curves vertically. 
C) benefit curves horizontally. 
D) benefit curves vertically. 
E) benefit curves diagonally. 
A) cost curves horizontally. 
B) cost curves vertically. 
C) benefit curves horizontally. 
D) benefit curves vertically. 
E) benefit curves diagonally.

Question 9

Public goods are provided by government because

Accepted Answer

A) governments are more efficient than private firms at producing public goods. 
B) free-rider problems result in underproduction by private markets. 
C) people value national defence very highly. 
D) private firms will make an economic profit. 
E) private firms do not take into account the impact of external costs. 
A) governments are more efficient than private firms at producing public goods. 
B) free-rider problems result in underproduction by private markets. 
C) people value national defence very highly. 
D) private firms will make an economic profit. 
E) private firms do not take into account the impact of external costs.

Question 10

Use the figure below to answer the following questions.
   Figure 17.3.1
-Figure 17.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The efficient quantity is

Accepted Answer

A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week. 
A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week.

Question 11

If voters are rationally ignorant,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 quantity that maximizes the budget of the Department of National Defence. 
E) both A and D are correct. 
A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the quantity that maximizes the budget of the Department of National Defence. 
E) both A and D are correct.

Question 12

Use the figure below to answer the following question.
   Figure 17.2.2
-Refer to Figure 17.2.2.The graph shows the marginal social benefit and marginal social cost of a garbage disposal system in a city of 1 million people.If voters are well informed about the costs and benefits of the garbage disposal system,the political equilibrium of garbage is

Accepted Answer

A) 2.0 million tonnes a day. 
B) 1.5 million tonnes a day. 
C) 2.5 million tonnes a day. 
D) 4.0 million tonnes a day. 
E) 0 million tonnes a day. 
A) 2.0 million tonnes a day. 
B) 1.5 million tonnes a day. 
C) 2.5 million tonnes a day. 
D) 4.0 million tonnes a day. 
E) 0 million tonnes a day.

Question 13

Rational ignorance suggests that

Accepted Answer

A) all voters are ignorant. 
B) all voters will be ignorant on issues that are not of special interest to them. 
C) all voters will pursue information about each issue before voting. 
D) low voter turnout is due to a lack of understanding of the importance of the political platforms. 
E) it is easier to aim at the median voter because it is a less costly strategy for the politicians. 
A) all voters are ignorant. 
B) all voters will be ignorant on issues that are not of special interest to them. 
C) all voters will pursue information about each issue before voting. 
D) low voter turnout is due to a lack of understanding of the importance of the political platforms. 
E) it is easier to aim at the median voter because it is a less costly strategy for the politicians.

Question 14

Sustainable production is

Accepted Answer

A) the rate of production that can be maintained indefinitely. 
B) the production output with the lowest average total cost. 
C) the production output where MC=ATC. 
D) the rate of production that maximizes marginal private benefit. 
E) the rate of production where MB=MC. 
A) the rate of production that can be maintained indefinitely. 
B) the production output with the lowest average total cost. 
C) the production output where MC=ATC. 
D) the rate of production that maximizes marginal private benefit. 
E) the rate of production where MB=MC.

Question 15

Which one of the following goods is nonexcludable?

Accepted Answer

A) a taxi 
B) a toll bridge 
C) the atmosphere 
D) an art museum 
E) all of the above 
A) a taxi 
B) a toll bridge 
C) the atmosphere 
D) an art museum 
E) all of the above

Question 16

According to public choice theory,a voter will tend to be well informed if the issue in question

Accepted Answer

A) is complicated and difficult to understand. 
B) affects everyone a little. 
C) is of special interest to a small group to which the voter does not belong. 
D) has a large direct effect on the voter. 
E) is important even if it does not directly affect the voter. 
A) is complicated and difficult to understand. 
B) affects everyone a little. 
C) is of special interest to a small group to which the voter does not belong. 
D) has a large direct effect on the voter. 
E) is important even if it does not directly affect the voter.

Question 17

The budget of a government department is likely to be efficient 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 public choice 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 public choice theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities.

Question 18

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 19

In which of the following cases can the tragedy of the commons occur? I.Cattle grazing on private ranches.
II.Catching lobsters off the coast of Florida.
III.Raising salmon on salmon farms.
IV)Using legal services provided by the courts.

Accepted Answer

A) I only 
B) II only 
C) II and III only 
D) I and IV only 
E) I and II only 
A) I only 
B) II only 
C) II and III only 
D) I and IV only 
E) I and II only

Question 20

The "tragedy of the commons" refers to

Accepted Answer

A) the inability of lower income groups to achieve a higher level of education. 
B) the absence of incentives to prevent the overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably. 
C) the acceptance of deplorable working conditions by those who lack the human capital to obtain a better job. 
D) the tendency for bureaucrats to maximize their budget. 
E) farmers who allow their livestock to overgraze their fields. 
A) the inability of lower income groups to achieve a higher level of education. 
B) the absence of incentives to prevent the overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably. 
C) the acceptance of deplorable working conditions by those who lack the human capital to obtain a better job. 
D) the tendency for bureaucrats to maximize their budget. 
E) farmers who allow their livestock to overgraze their fields.

Cable television and air-traffic control are similar to each other because both of them are

Use the figure below to answer the following questions. Figure 17.3.2 -Figure 17.3.2 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The equilibrium in an unregulated market is

The efficient use of a common resource requires that the equals the .

An example of a public good is

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

A common resource is

The tragedy of the commons is the absence of incentives to

An economy's marginal social benefit curve for a private good is obtained by summing the individual marginal

Public goods are provided by government because

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The efficient quantity is

If voters are rationally ignorant,the quantity of national defence provided by the government will be

Rational ignorance suggests that

Sustainable production is

Which one of the following goods is nonexcludable?

According to public choice theory,a voter will tend to be well informed if the issue in question

The budget of a government department is likely to be efficient if

A good that is rival and nonexcludable is a

In which of the following cases can the tragedy of the commons occur? I.Cattle grazing on private ranches. II.Catching lobsters off the coast of Florida. III.Raising salmon on salmon farms. IV)Using legal services provided by the courts.

The "tragedy of the commons" refers to

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Filters

Exam 17: Public Goods and Common Resources

Cable television and air-traffic control are similar to each other because both of them are

Use the figure below to answer the following questions. Figure 17.3.2 -Figure 17.3.2 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.The equilibrium in an unregulated market is

The efficient use of a common resource requires that the ________ equals the ________.

An example of a public good is

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

A common resource is

The tragedy of the commons is the absence of incentives to

An economy's marginal social benefit curve for a private good is obtained by summing the individual marginal

Public goods are provided by government because

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The efficient quantity is

If voters are rationally ignorant,the quantity of national defence provided by the government will be

Rational ignorance suggests that

Sustainable production is

Which one of the following goods is nonexcludable?

According to public choice theory,a voter will tend to be well informed if the issue in question

The budget of a government department is likely to be efficient if

A good that is rival and nonexcludable is a

In which of the following cases can the tragedy of the commons occur? I.Cattle grazing on private ranches. II.Catching lobsters off the coast of Florida. III.Raising salmon on salmon farms. IV)Using legal services provided by the courts.

The "tragedy of the commons" refers to

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Filters

The efficient use of a common resource requires that the equals the .