Question 1

The ocean remains one of the largest unregulated resources for each of the following reasons except

Accepted Answer

A)  many countries have access to the ocean. 
B)  it is difficult to get international cooperation among countries that hold different values. 
C)  the oceans are so vast that enforcing any agreements would be difficult. 
D)  All of the above are reasons the ocean remains one of the largest unregulated resources. 
A)  many countries have access to the ocean. 
B)  it is difficult to get international cooperation among countries that hold different values. 
C)  the oceans are so vast that enforcing any agreements would be difficult. 
D)  All of the above are reasons the ocean remains one of the largest unregulated resources.

Question 2

Why is the commercial value of ivory a threat to the elephant,while the commercial value of beef is the cow's guardian?

Accepted Answer

A)  Elephants live in Africa,whereas cows live in the United States. 
B)  Elephants are a common resource. 
C)  Cows are a common resource. 
D)  Cows are a public good. 
A)  Elephants live in Africa,whereas cows live in the United States. 
B)  Elephants are a common resource. 
C)  Cows are a common resource. 
D)  Cows are a public good.

Question 3

An absence of property rights often leads to market failure.When this is the case,how does society usually solve the problem?

Accepted Answer

The solution to the problem us

Question 4

The national defense of the United States is not excludable because

Accepted Answer

A)  my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States. 
B)  my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States. 
C)  once the nation is defended,it is impossible to prevent any single person from enjoying the benefit of this defense. 
D)  once the nation is defended,it is possible to prevent any single person from enjoying the benefit of this defense. 
A)  my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States. 
B)  my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States. 
C)  once the nation is defended,it is impossible to prevent any single person from enjoying the benefit of this defense. 
D)  once the nation is defended,it is possible to prevent any single person from enjoying the benefit of this defense.

Question 5

Which of the following quotations illustrates the Tragedy of the Commons?

Accepted Answer

A)  "A bird in the hand is worth two in the bush." 
B)  "The only difference between the rich and other people is that the rich have more money." 
C)  "What is common to many is taken least care of,for all men have greater regard for what is their own than for what they possess in common with others." 
D)  "Anyone who is not a socialist before he is 30 has no heart;anyone who is still a socialist after he is 30 has no head." 
A)  "A bird in the hand is worth two in the bush." 
B)  "The only difference between the rich and other people is that the rich have more money." 
C)  "What is common to many is taken least care of,for all men have greater regard for what is their own than for what they possess in common with others." 
D)  "Anyone who is not a socialist before he is 30 has no heart;anyone who is still a socialist after he is 30 has no head."

Question 6

What do we mean when we say that a good is excludable?

Accepted Answer

A good is excludable

Question 7

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway.Which of the following statements is correct?

Accepted Answer

A)  The benefits are usually easier to measure than the costs. 
B)  Because human life is priceless,any measure to increase traffic safety would generate benefits that outweigh the costs. 
C)  Estimating the value of a human life is difficult but necessary in order to evaluate the proposal. 
D)  Both a and b are correct. 
A)  The benefits are usually easier to measure than the costs. 
B)  Because human life is priceless,any measure to increase traffic safety would generate benefits that outweigh the costs. 
C)  Estimating the value of a human life is difficult but necessary in order to evaluate the proposal. 
D)  Both a and b are correct.

Question 8

Some goods can be either common resources or public goods depending on

Accepted Answer

A)  whether the good is rival in consumption. 
B)  whether the good is excludable. 
C)  the marginal cost of the good. 
D)  None of the above is correct. 
A)  whether the good is rival in consumption. 
B)  whether the good is excludable. 
C)  the marginal cost of the good. 
D)  None of the above is correct.

Question 9

Are common resources excludable? Are they rival in consumption?

Accepted Answer

No,common resources

Question 10

Suppose that the Town of Bumbletree is considering hiring an additional police officer.The reduction in crime is estimated to be worth $10 for each of Bumbletree's 5,000 residents.What should the city do?

Accepted Answer

A)  Hire the police officer because additional safety is priceless. 
B)  Hire the police officer if the cost of the new officer is less than $50,000. 
C)  Do not hire the police officer because the costs exceed the benefits. 
D)  Hire the police officer only if the benefit to the residents exceeds $50,000. 
A)  Hire the police officer because additional safety is priceless. 
B)  Hire the police officer if the cost of the new officer is less than $50,000. 
C)  Do not hire the police officer because the costs exceed the benefits. 
D)  Hire the police officer only if the benefit to the residents exceeds $50,000.

Question 11

The goal of requiring licenses for hunting and fishing is

Accepted Answer

A)  to reduce the use of a common resource. 
B)  to ensure that the people hunting and fishing are qualified. 
C)  to generate revenue for the government. 
D)  to monitor compliance with federal gun laws. 
A)  to reduce the use of a common resource. 
B)  to ensure that the people hunting and fishing are qualified. 
C)  to generate revenue for the government. 
D)  to monitor compliance with federal gun laws.

Question 12

In deciding whether a good is a public good,one must determine the

Accepted Answer

A)  incomes of those who benefit from the good. 
B)  value of the external benefits that accrue to resource owners. 
C)  excludability of the good. 
D)  All of the above are correct. 
A)  incomes of those who benefit from the good. 
B)  value of the external benefits that accrue to resource owners. 
C)  excludability of the good. 
D)  All of the above are correct.

Question 13

What causes the Tragedy of the Commons? (i)
Social and private incentives differ.
(ii)
Common resources are not rival in consumption and are not excludable.
(iii)
Common resources are not excludable but are rival in consumption.

Accepted Answer

A)  (i)only 
B)  (ii)only 
C)  (i)and (ii)only 
D)  (i)and (iii)only 
A)  (i)only 
B)  (ii)only 
C)  (i)and (ii)only 
D)  (i)and (iii)only

Question 14

Table 11-4
There are four homes along Belmont Circle,which surrounds a small plot of land.The land currently has no trees,and the 4 homeowners -- Adams,Benitez,Chen,and Davis -- are considering the idea of contributing to a pool of money that will be used to plant up to 4 trees.The table represents their willingness to pay,that is,the maximum amount that each homeowner is willing to contribute toward each tree.
  
-Refer to Table 11-4.Suppose the cost to plant each tree is $220 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s)would be in favor of planting at least 3 trees?

Accepted Answer

A)  only Benitez 
B)  only Benitez and Chen 
C)  only Benitez,Chen,and Davis 
D)  Adams,Benitez,Chen,and Davis 
A)  only Benitez 
B)  only Benitez and Chen 
C)  only Benitez,Chen,and Davis 
D)  Adams,Benitez,Chen,and Davis

Question 15

Figure 11-1
  
-Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

Accepted Answer

A)  a pair of pants 
B)  a lighthouse 
C)  a bicycle 
D)  a cattle ranch 
A)  a pair of pants 
B)  a lighthouse 
C)  a bicycle 
D)  a cattle ranch

Question 16

A streetlight is a

Accepted Answer

A)  private good. 
B)  club good. 
C)  common resource. 
D)  public good. 
A)  private good. 
B)  club good. 
C)  common resource. 
D)  public good.

Question 17

A pizza is

Accepted Answer

A)  excludable and rival in consumption. 
B)  excludable and nonrival in consumption. 
C)  nonexcludable and rival in consumption. 
D)  nonexcludable and nonrival in consumption. 
A)  excludable and rival in consumption. 
B)  excludable and nonrival in consumption. 
C)  nonexcludable and rival in consumption. 
D)  nonexcludable and nonrival in consumption.

Question 18

A lighthouse is typically considered to be a public good because

Accepted Answer

A)  the owner of the lighthouse is able to exclude beneficiaries from enjoying the lighthouse. 
B)  there is rarely another lighthouse nearby to provide competition. 
C)  a nearby port authority cannot avoid paying fees to the lighthouse owner. 
D)  all passing ships are able to enjoy the benefits of the lighthouse without paying. 
A)  the owner of the lighthouse is able to exclude beneficiaries from enjoying the lighthouse. 
B)  there is rarely another lighthouse nearby to provide competition. 
C)  a nearby port authority cannot avoid paying fees to the lighthouse owner. 
D)  all passing ships are able to enjoy the benefits of the lighthouse without paying.

Question 19

When one person enjoys the benefit of a tornado siren,she reduces the benefit to others.

Accepted Answer

A) True 
 B)False

Question 20

The U.S.military defends Jacob from foreign attackers.The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it.For this reason,we say that national defense is

Accepted Answer

A)  excludable. 
B)  not excludable. 
C)  rival in consumption. 
D)  not rival in consumption. 
A)  excludable. 
B)  not excludable. 
C)  rival in consumption. 
D)  not rival in consumption.

Exam 11: Public Goods and Common Resources

The ocean remains one of the largest unregulated resources for each of the following reasons except

Why is the commercial value of ivory a threat to the elephant,while the commercial value of beef is the cow's guardian?

An absence of property rights often leads to market failure.When this is the case,how does society usually solve the problem?

The national defense of the United States is not excludable because

Which of the following quotations illustrates the Tragedy of the Commons?

What do we mean when we say that a good is excludable?

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway.Which of the following statements is correct?

Some goods can be either common resources or public goods depending on

Are common resources excludable? Are they rival in consumption?

Suppose that the Town of Bumbletree is considering hiring an additional police officer.The reduction in crime is estimated to be worth $10 for each of Bumbletree's 5,000 residents.What should the city do?

The goal of requiring licenses for hunting and fishing is

In deciding whether a good is a public good,one must determine the

What causes the Tragedy of the Commons? (i) Social and private incentives differ. (ii) Common resources are not rival in consumption and are not excludable. (iii) Common resources are not excludable but are rival in consumption.

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

A streetlight is a

A pizza is

A lighthouse is typically considered to be a public good because

When one person enjoys the benefit of a tornado siren,she reduces the benefit to others.

The U.S.military defends Jacob from foreign attackers.The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it.For this reason,we say that national defense is

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply,demand,and Government Policies

Consumers,producers,and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Market for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving,investment,and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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