Question 1

Pay-per-view broadcasts are

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 2

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing,the lake they fish in is not a common resource.

Accepted Answer

A) True 
 B)False

Question 3

Because of the free-rider problem,

Accepted Answer

A)  private markets tend to undersupply public goods. 
B)  the federal government spends too many resources on national defense and not enough resources on medical research. 
C)  fireworks displays have become increasingly dangerous. 
D)  poverty has increased. 
A)  private markets tend to undersupply public goods. 
B)  the federal government spends too many resources on national defense and not enough resources on medical research. 
C)  fireworks displays have become increasingly dangerous. 
D)  poverty has increased.

Question 4

Which of the following would not be considered a private good?

Accepted Answer

A)  a sweater 
B)  a slice of pizza 
C)  a Toyota Prius 
D)  cable TV service 
A)  a sweater 
B)  a slice of pizza 
C)  a Toyota Prius 
D)  cable TV service

Question 5

Three business people meet for lunch at an Indian restaurant.They decide that each person will order an item off the menu,and they will share all dishes.They will split the cost of the final bill evenly among each of the people at the table.When the food is delivered to the table,each person faces incentives similar to the

Accepted Answer

A)  consumption of a common resource good. 
B)  production of a public good. 
C)  consumption of a club good. 
D)  production of a private good. 
A)  consumption of a common resource good. 
B)  production of a public good. 
C)  consumption of a club good. 
D)  production of a private good.

Question 6

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is not excludable and not rival in consumption?

Accepted Answer

A)  pair of pants,uncongested toll road 
B)  pair of pants,fireworks display 
C)  fish in the ocean,national defense 
D)  uncongested toll road,uncongested nontoll road 
A)  pair of pants,uncongested toll road 
B)  pair of pants,fireworks display 
C)  fish in the ocean,national defense 
D)  uncongested toll road,uncongested nontoll road

Question 7

Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?

Accepted Answer

Whales are not excludable,but

Question 8

Because elephants roam freely in many countries in Africa,each individual African elephant poacher has

Accepted Answer

A)  a strong incentive to kill as many elephants as he can find. 
B)  a strong incentive to protect the elephants. 
C)  the ability to save the elephants. 
D)  None of the above is correct. 
A)  a strong incentive to kill as many elephants as he can find. 
B)  a strong incentive to protect the elephants. 
C)  the ability to save the elephants. 
D)  None of the above is correct.

Question 9

Consider the following problems: overcrowded public highways,overfishing in the ocean,polluted air,and the near-extinction of the wild rhinoceros.What do these problems have in common?

Accepted Answer

A)  Private markets could easily solve them if governments left the markets alone. 
B)  They would all go away if the government sponsored an intensive public-information campaign. 
C)  They are all the result of a failure to establish clear property rights over something of value. 
D)  They are all the result of a failure of corrective taxes. 
A)  Private markets could easily solve them if governments left the markets alone. 
B)  They would all go away if the government sponsored an intensive public-information campaign. 
C)  They are all the result of a failure to establish clear property rights over something of value. 
D)  They are all the result of a failure of corrective taxes.

Question 10

One proposed solution to overused,deteriorating national parks would be to

Accepted Answer

A)  increase the number of bears through breeding programs. 
B)  have Congress increase the entrance fees. 
C)  decrease management and maintenance of facilities. 
D)  reduce the number of improved camping facilities. 
A)  increase the number of bears through breeding programs. 
B)  have Congress increase the entrance fees. 
C)  decrease management and maintenance of facilities. 
D)  reduce the number of improved camping facilities.

Question 11

Figure 11-1
  
-Refer to Figure 11-1.A tornado siren in a small town is an example of the type of good represented by Box

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 12

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

Accepted Answer

Eliminating poverty is not a good that t

Question 13

Table 11-5
A small strip mall contains four retail stores,and crime has recently been on the increase in the neighborhood of the strip mall.The owners of the four stores - Stores A,B,C,and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards.The table represents their willingness to pay,that is,the maximum amount that each store owner is willing to contribute,per day,to hire each security guard.
  
-Refer to Table 11-5.Suppose the cost to hire each individual guard is $130 per day.How many guards should be hired to maximize the total surplus of the four store owners?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 14

Some goods,such as lighthouses,can switch between being public goods and being private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is excludable and not rival in consumption?

Accepted Answer

A)  pizza,cable TV 
B)  pair of pants,clean air 
C)  clean air,mathematical theorem 
D)  basic research,fireworks display 
A)  pizza,cable TV 
B)  pair of pants,clean air 
C)  clean air,mathematical theorem 
D)  basic research,fireworks display

Question 16

Variable tolls on roads

Accepted Answer

A)  are politically unpopular because people do not like the idea of paying for a good that they used to consume without paying for it directly. 
B)  rise when traffic volume increases to ensure the speed on the road is kept high. 
C)  are an effective way of correcting the common resource problem on roads. 
D)  All of the above are correct. 
A)  are politically unpopular because people do not like the idea of paying for a good that they used to consume without paying for it directly. 
B)  rise when traffic volume increases to ensure the speed on the road is kept high. 
C)  are an effective way of correcting the common resource problem on roads. 
D)  All of the above are correct.

Question 17

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000.The walkway is expected to reduce the risk of fatality by 1.5 percent,and the cost of a human life is estimated at $10 million.The town should

Accepted Answer

A)  install the walkway because the estimated benefit is twice the cost. 
B)  be indifferent between installing and not installing the walkway because the estimated benefit equals the cost. 
C)  not install the walkway,since the cost is twice the estimated benefit. 
D)  install the walkway,since the cost of even a single life is too great not to take action. 
A)  install the walkway because the estimated benefit is twice the cost. 
B)  be indifferent between installing and not installing the walkway because the estimated benefit equals the cost. 
C)  not install the walkway,since the cost is twice the estimated benefit. 
D)  install the walkway,since the cost of even a single life is too great not to take action.

Question 18

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population.Which of the following statements is not correct?

Accepted Answer

A)  Lobsters are rival but not excludable. 
B)  The lobster population is an example of the tragedy of the commons. 
C)  Reducing the quota on the number of lobsters any fisher can catch would have a protective effect on the lobster population. 
D)  If left unregulated,the lobster population will likely increase. 
A)  Lobsters are rival but not excludable. 
B)  The lobster population is an example of the tragedy of the commons. 
C)  Reducing the quota on the number of lobsters any fisher can catch would have a protective effect on the lobster population. 
D)  If left unregulated,the lobster population will likely increase.

Question 19

The provision of public goods gives rise to

Accepted Answer

A)  no externalities. 
B)  positive externalities. 
C)  negative externalities. 
D)  rivalries in consumption. 
A)  no externalities. 
B)  positive externalities. 
C)  negative externalities. 
D)  rivalries in consumption.

Question 20

You are the mayor of a town with 20,000 residents.The head of your economic development agency recently conducted a survey in which the 20,000 residents said that a small public library in the center of town would be worth $40 to each of them.Because the cost to build the library is only $500,000,you arrange to have the library built.Everyone in town enjoys the library,but when you asked for donations to pay for the library,you only collected $100,000.You are convinced that

Accepted Answer

A)  the survey must have overstated how much the library was worth to each resident;otherwise,you would have collected $500,000 in donations. 
B)  the cost of the library exceeded the social benefits. 
C)  the library was an example of the Tragedy of the Commons. 
D)  most residents of the town are probably free-riders at the library. 
A)  the survey must have overstated how much the library was worth to each resident;otherwise,you would have collected $500,000 in donations. 
B)  the cost of the library exceeded the social benefits. 
C)  the library was an example of the Tragedy of the Commons. 
D)  most residents of the town are probably free-riders at the library.

Exam 11: Public Goods and Common Resources

Pay-per-view broadcasts are

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing,the lake they fish in is not a common resource.

Because of the free-rider problem,

Which of the following would not be considered a private good?

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is not excludable and not rival in consumption?

Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?

Because elephants roam freely in many countries in Africa,each individual African elephant poacher has

Consider the following problems: overcrowded public highways,overfishing in the ocean,polluted air,and the near-extinction of the wild rhinoceros.What do these problems have in common?

One proposed solution to overused,deteriorating national parks would be to

Figure 11-1 -Refer to Figure 11-1.A tornado siren in a small town is an example of the type of good represented by Box

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

Some goods,such as lighthouses,can switch between being public goods and being private goods depending on the circumstances.

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is excludable and not rival in consumption?

Variable tolls on roads

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000.The walkway is expected to reduce the risk of fatality by 1.5 percent,and the cost of a human life is estimated at $10 million.The town should

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population.Which of the following statements is not correct?

The provision of public goods gives rise 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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