Question 1

A local park filled with picnickers is

Accepted Answer

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

Question 2

Using a toll to reduce traffic when congestion is greatest is an example of a

Accepted Answer

A)  regulation solution. 
B)  command-and-control policy. 
C)  corrective tax. 
D)  Coase theorem solution. 
A)  regulation solution. 
B)  command-and-control policy. 
C)  corrective tax. 
D)  Coase theorem solution.

Question 3

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 $300 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Marshall's like the town to install?

Accepted Answer

A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights 
A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights

Question 4

People can be prevented from using a good if the good is

Accepted Answer

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

Question 5

Figure 11-1
  
-Refer to Figure 11-1.In which box - A,B,C,or D - does cable TV belong?

Accepted Answer

Cable TV i

Question 6

Which of the following is not a public good?

Accepted Answer

A)  national defense 
B)  patented technological knowledge 
C)  general knowledge 
D)  the elimination of poverty 
A)  national defense 
B)  patented technological knowledge 
C)  general knowledge 
D)  the elimination of poverty

Question 7

Markets do not ensure that the air we breathe is clean because

Accepted Answer

A)  clean air has no value. 
B)  the government prevents markets from doing so. 
C)  property rights are not well established for clean air. 
D)  clean air is impossible to produce . 
A)  clean air has no value. 
B)  the government prevents markets from doing so. 
C)  property rights are not well established for clean air. 
D)  clean air is impossible to produce .

Question 8

An example of the "Tragedy of the Commons" is litter in the picnic area of a local park.

Accepted Answer

A) True 
 B)False

Question 9

Suppose that everyone prefers to live in a society without poverty.Further suppose that some private charities are successful in reducing poverty.People who do not contribute to the charities

Accepted Answer

A)  receive no external benefit from private antipoverty programs. 
B)  decrease the reliance of individuals on antipoverty programs. 
C)  can free ride on the generosity of others. 
D)  are most likely to be in favor of government-sponsored programs. 
A)  receive no external benefit from private antipoverty programs. 
B)  decrease the reliance of individuals on antipoverty programs. 
C)  can free ride on the generosity of others. 
D)  are most likely to be in favor of government-sponsored programs.

Question 10

Figure 11-1
  
-Refer to Figure 11-1.In which box - A,B,C,or D - does clean air belong?

Accepted Answer

Clean air is a commo

Question 11

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 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Walker's like the town to install?

Accepted Answer

A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights 
A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights

Question 12

On hot summer days,electricity-generating capacity is sometimes stretched to the limit.At these times,electric companies may ask people to voluntarily cut back on their use of electricity.On these days,electricity is

Accepted Answer

A)  excludable,but nonrival in consumption. 
B)  not excludable,but rival in consumption. 
C)  excludable and rival in consumption. 
D)  not excludable and nonrival in consumption. 
A)  excludable,but nonrival in consumption. 
B)  not excludable,but rival in consumption. 
C)  excludable and rival in consumption. 
D)  not excludable and nonrival in consumption.

Question 13

What is the main difficulty facing cost-benefit analysts when they attempt to evaluate the worthiness of proposed public projects?

Accepted Answer

The main difficulty is that co

Question 14

Depending on congestion,national parks can be either a common resource or a public good.

Accepted Answer

A) True 
 B)False

Question 15

Many species of animals are common resources,and many must be protected by law to keep them from extinction.Why is the cow not one of these endangered species even though there is such a high demand for beef?

Accepted Answer

A)  Cows reproduce at a high rate and have adapted well to their environment. 
B)  Public policies protect cows from predators and diseases. 
C)  Cows are privately owned,whereas many endangered species are owned by no one. 
D)  There is a natural ecological balance between the birth rate of cows and human consumption. 
A)  Cows reproduce at a high rate and have adapted well to their environment. 
B)  Public policies protect cows from predators and diseases. 
C)  Cows are privately owned,whereas many endangered species are owned by no one. 
D)  There is a natural ecological balance between the birth rate of cows and human consumption.

Question 16

Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket.Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers.Which of the following statements is not correct?

Accepted Answer

A)  Use of the beach by the nine new beachgoers will yield a negative externality. 
B)  The town can reduce the congestion externality by raising the fee to access the beach. 
C)  An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion. 
D)  Each of the nine friends would have been better off staying at home. 
A)  Use of the beach by the nine new beachgoers will yield a negative externality. 
B)  The town can reduce the congestion externality by raising the fee to access the beach. 
C)  An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion. 
D)  Each of the nine friends would have been better off staying at home.

Question 17

It is common knowledge that many U.S.national parks have become overused.One possible solution to this problem is to

Accepted Answer

A)  increase entrance fees. 
B)  decrease camping permit fees. 
C)  require all visitors to register upon entering the park. 
D)  sell the land that the parks currently occupy. 
A)  increase entrance fees. 
B)  decrease camping permit fees. 
C)  require all visitors to register upon entering the park. 
D)  sell the land that the parks currently occupy.

Question 18

For most goods in an economy,the signal that guides the decisions of buyers and sellers is

Accepted Answer

A)  preference. 
B)  government intervention. 
C)  quantity. 
D)  price. 
A)  preference. 
B)  government intervention. 
C)  quantity. 
D)  price.

Question 19

Table 11-1
Consider the town of Anywhere with only three residents,Mary,Bill,and Tricia.The three residents are trying to determine how large,in acres,they should build the public park.The table below shows each resident's willingness to pay for each acre of the park.
  
-Refer to Table 11-1.Suppose the cost to build the park is $33 per acre.How many acres should the park be to maximize total surplus from the park in Anywhere?

Accepted Answer

A)  2 acres 
B)  3 acres 
C)  4 acres 
D)  5 acres 
A)  2 acres 
B)  3 acres 
C)  4 acres 
D)  5 acres

Question 20

Government policy can potentially raise economic well-being

Accepted Answer

A)  in all markets for goods and services. 
B)  in economic models,but not in reality. 
C)  when a good does not have a price attached to it. 
D)  never. 
A)  in all markets for goods and services. 
B)  in economic models,but not in reality. 
C)  when a good does not have a price attached to it. 
D)  never.

Exam 11: Public Goods and Common Resources

A local park filled with picnickers is

Using a toll to reduce traffic when congestion is greatest is an example of a

People can be prevented from using a good if the good is

Figure 11-1 -Refer to Figure 11-1.In which box - A,B,C,or D - does cable TV belong?

Which of the following is not a public good?

Markets do not ensure that the air we breathe is clean because

An example of the "Tragedy of the Commons" is litter in the picnic area of a local park.

Suppose that everyone prefers to live in a society without poverty.Further suppose that some private charities are successful in reducing poverty.People who do not contribute to the charities

Figure 11-1 -Refer to Figure 11-1.In which box - A,B,C,or D - does clean air belong?

On hot summer days,electricity-generating capacity is sometimes stretched to the limit.At these times,electric companies may ask people to voluntarily cut back on their use of electricity.On these days,electricity is

What is the main difficulty facing cost-benefit analysts when they attempt to evaluate the worthiness of proposed public projects?

Depending on congestion,national parks can be either a common resource or a public good.

Many species of animals are common resources,and many must be protected by law to keep them from extinction.Why is the cow not one of these endangered species even though there is such a high demand for beef?

It is common knowledge that many U.S.national parks have become overused.One possible solution to this problem is to

For most goods in an economy,the signal that guides the decisions of buyers and sellers is

Government policy can potentially raise economic well-being

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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