Question 1

Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

Accepted Answer

A)  overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good. 
B)  overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good. 
C)  understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good. 
D)  understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good. 
A)  overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good. 
B)  overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good. 
C)  understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good. 
D)  understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.

Question 2

Figure 11-1
  
-Refer to Figure 11-1.A mathematical theorem is an example of general knowledge.In which of the boxes - A,B,C,or D - does a mathematical theorem belong?

Accepted Answer

A mathematical theor

Question 3

The Occupational Safety and Health Administration (OSHA)has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of diet soft drinks is 0.0005.The cost of imposing a regulation that would ban the chemical is $18 million.If the value of a human life is equal to $10 million,how many people must the policy affect in order for the benefits to exceed the costs?

Accepted Answer

A)  301 
B)  601 
C)  1801 
D)  3601 
A)  301 
B)  601 
C)  1801 
D)  3601

Question 4

Which of the following goods is rival in consumption and excludable?

Accepted Answer

A)  a tornado siren 
B)  an uncongested toll road 
C)  a home 
D)  the environment 
A)  a tornado siren 
B)  an uncongested toll road 
C)  a home 
D)  the environment

Question 5

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

Accepted Answer

A) True 
 B)False

Question 6

Aristotle writes,"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." In this statement,Aristotle is referring to the free-rider problem that occurs when a person receives the benefit of a good without paying for it.

Accepted Answer

A) True 
 B)False

Question 7

Excludability is the property of a good whereby

Accepted Answer

A)  one person's use diminishes other peoples' use. 
B)  a person can be prevented from using it. 
C)  a good is private,not public. 
D)  a good is public,not private. 
A)  one person's use diminishes other peoples' use. 
B)  a person can be prevented from using it. 
C)  a good is private,not public. 
D)  a good is public,not private.

Question 8

Which of the following is an example of general knowledge,as opposed to specific knowledge that can be patented?

Accepted Answer

A)  the invention of a longer-lasting battery 
B)  a mathematical theorem 
C)  a method for constucting a high-performance microchip 
D)  the chemical formula for an adhesive 
A)  the invention of a longer-lasting battery 
B)  a mathematical theorem 
C)  a method for constucting a high-performance microchip 
D)  the chemical formula for an adhesive

Question 9

Is national defense excludable? Is it rival in consumption? How do we classify national defense in terms of the four types of goods?

Accepted Answer

National defense is

Question 10

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

Accepted Answer

A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods. 
A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods.

Question 11

When a good is excludable,

Accepted Answer

A)  one person's use of the good diminishes another person's ability to use it. 
B)  people can be prevented from using the good. 
C)  no more than one person can use the good at the same time. 
D)  everyone will be excluded from using the good. 
A)  one person's use of the good diminishes another person's ability to use it. 
B)  people can be prevented from using the good. 
C)  no more than one person can use the good at the same time. 
D)  everyone will be excluded from using the good.

Question 12

When the absence of property rights causes a market failure,the government can potentially solve the problem

Accepted Answer

A)  by clearly defining property rights. 
B)  through regulation. 
C)  by supplying the good itself. 
D)  All of the above are correct. 
A)  by clearly defining property rights. 
B)  through regulation. 
C)  by supplying the good itself. 
D)  All of the above are correct.

Question 13

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

Accepted Answer

A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods. 
A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods.

Question 14

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Accepted Answer

A) True 
 B)False

Question 15

Figure 11-1
  
-Refer to Figure 11-1.With which of the boxes - A,B,C,or D - do we associate the Tragedy of the Commons?

Accepted Answer

We associate the Tra

Question 16

Private companies will invest in medical research if

Accepted Answer

A)  they will produce general knowledge. 
B)  they will produce a specific product for which they may receive a patent. 
C)  there is no government intervention in the market for medical products. 
D)  others will benefit from their discoveries. 
A)  they will produce general knowledge. 
B)  they will produce a specific product for which they may receive a patent. 
C)  there is no government intervention in the market for medical products. 
D)  others will benefit from their discoveries.

Question 17

A textbook is a

Accepted Answer

A)  private good and the knowledge that one gains from reading the book is a common resource. 
B)  private good and the knowledge that one gains from reading the book is a public good. 
C)  common resource and the knowledge that one gains from reading the book is a public good. 
D)  common resource and the knowledge that one gains from reading the book is a private good. 
A)  private good and the knowledge that one gains from reading the book is a common resource. 
B)  private good and the knowledge that one gains from reading the book is a public good. 
C)  common resource and the knowledge that one gains from reading the book is a public good. 
D)  common resource and the knowledge that one gains from reading the book is a private good.

Question 18

A cost-benefit analysis of a highway is difficult to conduct because analysts

Accepted Answer

A)  cannot estimate the explicit cost of a project that has not been completed. 
B)  are unlikely to have access to costs on similar projects. 
C)  are not able to consider the opportunity cost of resources. 
D)  will have difficulty estimating the value of the highway. 
A)  cannot estimate the explicit cost of a project that has not been completed. 
B)  are unlikely to have access to costs on similar projects. 
C)  are not able to consider the opportunity cost of resources. 
D)  will have difficulty estimating the value of the highway.

Question 19

When a good does not have a __________ attached to it,private markets fail to ensure that the good is produced and consumed in the proper amounts.

Accepted Answer

The answer of When a good does not have a...

Question 20

One economically efficient way to eliminate the Tragedy of the Commons is to

Accepted Answer

A)  tax the owners of the resource. 
B)  prevent anyone from using the resource. 
C)  reduce the marginal social benefit of the resource. 
D)  establish private ownership of the resource. 
A)  tax the owners of the resource. 
B)  prevent anyone from using the resource. 
C)  reduce the marginal social benefit of the resource. 
D)  establish private ownership of the resource.

Exam 11: Public Goods and Common Resources

Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

Figure 11-1 -Refer to Figure 11-1.A mathematical theorem is an example of general knowledge.In which of the boxes - A,B,C,or D - does a mathematical theorem belong?

Which of the following goods is rival in consumption and excludable?

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

Excludability is the property of a good whereby

Which of the following is an example of general knowledge,as opposed to specific knowledge that can be patented?

Is national defense excludable? Is it rival in consumption? How do we classify national defense in terms of the four types of goods?

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

When a good is excludable,

When the absence of property rights causes a market failure,the government can potentially solve the problem

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

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Figure 11-1 -Refer to Figure 11-1.With which of the boxes - A,B,C,or D - do we associate the Tragedy of the Commons?

Private companies will invest in medical research if

A textbook is a

A cost-benefit analysis of a highway is difficult to conduct because analysts

When a good does not have a __________ attached to it,private markets fail to ensure that the good is produced and consumed in the proper amounts.

One economically efficient way to eliminate the Tragedy of the Commons is to

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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