Exam 11: Public Goods and Common Resources

Under which of the following scenarios would a park be considered a common resource?

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Under which of the following scenarios would a park be considered a club good?

Neither public goods nor common resources are

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 $90.How many trees should be planted to maximize the total surplus of the four homeowners?

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 $180 and the families have agreed to split the cost of the streetlights equally.If the families vote to determine the number of streetlights to install,basing their decision solely on their own willingness to pay (and trying to maximize their own surplus),what is the greatest number of streetlights for which the majority of families would vote "yes?"

Even economists who advocate small government agree that national defense is a good that the government should provide.

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

The old lyric "the best things in life are free"

Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

Why do elephants face the threat of extinction while cows do not?

Consider a good for which the number of people who benefit from the good is large and the exclusion of any one those people is impossible.In this case,the market for this good will likely

An AM radio transmission of a baseball game is

A stairwell in a certain office building is always congested at 12:00 p.m.and 1:00 p.m.The congestion is so bad that people have been complaining to the building's owner.Which of the following methods would be the most efficient way of reducing congestion?

When good X is produced,some people benefit.A free-rider problem arises when

The government often intervenes when private markets fail to provide an optimal level of certain goods and services.For example,the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another.Why might the private market not reach the socially optimal level of traffic without the help of government?

A free rider problem arrises when

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

Table 11-3 This table describes the defense demands for three equal sized groups of people in Nirvanaville.The second,third,and fourth column shows the quantity that a group will demand for a given price (the first column). -Refer to Table 11-3.If the marginal cost of national defense is constant at $24 per unit,what is the efficient level of national defense to provide?

Which of the following is a disadvantage of government provision of a public good such as national defense? (i) The government does not know the exact willingness of consumers to pay for the public good. (ii) The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good. (iii) Taxpayers do not agree on the optimal quantity of the public good that the government should provide.