Exam 11: Public Goods and Common Resources

Table 11-2 Consider a small town with only three families,the Johnson family,the Marshall family,and the Walker family.The town does not currently have any streetlights so it is very dark at night.The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install.The table below shows each family's willingness to pay for each streetlight. -Refer to Table 11-2.Suppose the cost to install each streetlight is $450.How many streetlights should the town install to maximize total surplus from the streetlights?

Without government intervention,public goods tend to be

Private markets usually fail to provide lighthouses because

A lighthouse might be considered a private good if

Which of the following is an approach used by economists to calculate the value of a human life?

National Public Radio would be considered a club good.

It would always be a mistake to view

What do we mean when we say that a good is rival in consumption?

Residents of Hong Kong are able to find restaurants that advertise a dish that contains grizzly bear paws.Since it is unlikely that grizzly bear paws are purchased from a private producer of animal paws,we can likely conclude that

Producers have little incentive to produce a public good because

The Pennsylvania Turnpike is a tolled freeway running through the state of Pennsylvania.Motorists must pay tolls at various points along the Turnpike based on the distance they traveled on the freeway.Suppose that despite the tolls,many motorists in the urban areas use the Turnpike causing traffic to slow during peak times.What type of good would the Turnpike be classified as in this case?

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

An example of a private good would be

On the Fourth of July,there is no fireworks display in the small town of Yankeeville,even though it would be efficient for such a display to be produced.Which of the following statements is correct?

In almost all cases of common resources,the same problem arises as in the Tragedy of the __________.

People cannot be prevented from using a good if the good is

Markets fail to allocate resources efficiently when

A free-rider is someone who receives the benefit of a good but avoids paying for it.

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Figure 11-1 -Refer to Figure 11-1.The box labeled B represents