Exam 11: Public Goods and Common Resources

Phil owns 10 acres of beautiful wooded land.When Phil decides to move to be closer to his grandchildren,he donates the land to the state with the understanding that the land will be used as a state park that anyone may use without paying any fees.This state park

When a highway is congested,giving rise to negative externalities,it is appropriate to view the highway as a common resource.

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

Fire protection is a

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Governments can grant private property rights over resources that were previously viewed as public,such as fish or elephants.Why would governments want to do so?

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time-share condominium in Alta,Utah.Suppose that the lift lines at the ski resort become more congested when the ten additional people start to ski.Which of the following statements is not correct?

Property rights are well established for

Table 11-1 Three wealthy families - the Johnsons,the Lincolns,and the Washingtons -are the only residents of a certain neighborhood in which the lawns are large and the streets are wide.The three families are considering the placement of one,two,or three elegant statues at entrances to the neighborhood.The table represents the individual families' willingness to pay,that is,the maximum amount that each family is willing to contribute to purchase and erect each statue. -Refer to Table 11-1.Suppose the cost of each statue is $24,000 and the three families have agreed to split the cost of the statues equally.Which family (or families)would be in favor of erecting two statues but would be opposed to erecting a third statue?

The U.S.patent system

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $25,000.If the traffic light reduces the risk of fatality by 0.3 percent,and the value of a human life is estimated to be $10 million,you should

The provision of a public good generates a

The free-rider problem

Table 11-1 Three wealthy families - the Johnsons,the Lincolns,and the Washingtons -are the only residents of a certain neighborhood in which the lawns are large and the streets are wide.The three families are considering the placement of one,two,or three elegant statues at entrances to the neighborhood.The table represents the individual families' willingness to pay,that is,the maximum amount that each family is willing to contribute to purchase and erect each statue. -Refer to Table 11-1.Suppose the cost of each statue is $19,500 and the three families have agreed to split the costs of the statues equally.Which of the following statements is correct?

On holiday weekends thousands of people picnic in state parks.Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero.Suppose that the Minnesota State Park Service institutes a variable fee structure.On weekdays when the picnic areas get little use,the fee is zero.On normal weekends,the fee is $8 per person.On holiday weekends,the fee is $14 per person.The fee system corrects a problem known as the

Which two types of goods are excludable?

If everyone benefits from helping the poor,

Figure 11-1 -Refer to Figure 11-1.The box labeled A represents what type of good?

Phil owns 10 acres of beautiful wooded land.When Phil decides to move to be closer to his grandchildren,he donates the land to the state with the understanding that the land will be used as a state park.Phil wants an efficient way to prevent overcrowding at the park,so he should require

An overcrowded beach is an example of