Question 1

Which of the following is a list of excludable and nonrival goods only?

Accepted Answer

A)  cable Internet service, toll highways, public roads, soup kitchen meals 
B)  online video games, a private beach, toll highways, cable Internet service 
C)  a public beach, soup kitchen meals, public roads, smog reduction 
D)  national defense, a lighthouse, smog reduction, cable Internet service 
A)  cable Internet service, toll highways, public roads, soup kitchen meals 
B)  online video games, a private beach, toll highways, cable Internet service 
C)  a public beach, soup kitchen meals, public roads, smog reduction 
D)  national defense, a lighthouse, smog reduction, cable Internet service

Question 2

Cable TV is nonrival and excludable. Contact lenses are rival and excludable. Public goods are nonrival and nonexcludable. Nonrival private goods are excludable.

Accepted Answer

A) True 
 B)False

Question 3

The tragedy of the commons problem is a type of negative externality.

Accepted Answer

A) True 
 B)False

Question 4

New Zealand's individual transfer quotas:
I. work by limiting the amount of fish that each individual fisherman can fish.
II. resulted in reduced fish catches after they were established.
III. work just like the tradable pollution allowances in the United States.

Accepted Answer

A)  I only 
B)  I and III only 
C)  III only 
D)  I, II, and III 
A)  I only 
B)  I and III only 
C)  III only 
D)  I, II, and III

Question 5

Owned resources still face the tragedy of the commons.

Accepted Answer

A) True 
 B)False

Question 6

Some researchers estimate that all saltwater fish will be extinct by 2048, in large part due to overfishing. But surveys also show that more households eat chicken and beef than fish; however, neither chickens nor beef are in danger of extinction. Which of the following best explains these observations?

Accepted Answer

A)  The supply of fish has always been less than the supply of chicken and beef. 
B)  Fish tend to be nonexcludable resources, whereas chicken and beef are excludable. 
C)  Fish tend to be nonrival resources, whereas chicken and beef are rival. 
D)  The price of fish is much higher than the price of chicken and beef. 
A)  The supply of fish has always been less than the supply of chicken and beef. 
B)  Fish tend to be nonexcludable resources, whereas chicken and beef are excludable. 
C)  Fish tend to be nonrival resources, whereas chicken and beef are rival. 
D)  The price of fish is much higher than the price of chicken and beef.

Question 7

Economic markets have a hard time producing the efficient quantity of a public good because of forced riders.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following solutions allows for an efficient allocation of a public good?

Accepted Answer

A)  widespread taxation 
B)  government command and control policies 
C)  donation-based funding 
D)  advertising 
A)  widespread taxation 
B)  government command and control policies 
C)  donation-based funding 
D)  advertising

Question 9

A free rider is someone who receives the benefit of a good and avoids paying for it.

Accepted Answer

A) True 
 B)False

Question 10

Cable TV is an example of a:

Accepted Answer

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

Question 11

Markets tend to underproduce public goods, even though they are highly valued goods.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following goods is NOT rival and NOT excludable?

Accepted Answer

A)  a boat 
B)  a public road 
C)  an ice cream cone 
D)  a street light 
A)  a boat 
B)  a public road 
C)  an ice cream cone 
D)  a street light

Question 13

Private goods can be provided by competitive markets because they are:

Accepted Answer

A)  excludable, providing an incentive to pay for and thus to produce these goods. 
B)  excludable, since the market for buying and selling these goods is distinguishable. 
C)  nonexcludable, providing an incentive to pay for and thus to produce these goods. 
D)  nonexcludable, since the market for buying and selling these goods cannot be distinguished. 
A)  excludable, providing an incentive to pay for and thus to produce these goods. 
B)  excludable, since the market for buying and selling these goods is distinguishable. 
C)  nonexcludable, providing an incentive to pay for and thus to produce these goods. 
D)  nonexcludable, since the market for buying and selling these goods cannot be distinguished.

Question 14

The sun has features of a:

Accepted Answer

A)  public good -it shines on everyone 
B)  common resource-everyone in society can use it for warmth and light. 
C)  rival good that can easily be made excludable. 
D)  private good since solar energy can be marketed. 
A)  public good -it shines on everyone 
B)  common resource-everyone in society can use it for warmth and light. 
C)  rival good that can easily be made excludable. 
D)  private good since solar energy can be marketed.

Question 15

Which of the following is a list of common resources only?

Accepted Answer

A)  online video games, a private beach, toll highways, cable Internet service 
B)  a public beach, soup kitchen meals, public roads 
C)  national defense, a lighthouse, smog reduction 
D)  online video games, a public beach, soup kitchen meals, public roads 
A)  online video games, a private beach, toll highways, cable Internet service 
B)  a public beach, soup kitchen meals, public roads 
C)  national defense, a lighthouse, smog reduction 
D)  online video games, a public beach, soup kitchen meals, public roads

Question 16

In group projects for class there is often one member who does noticeably less work than others. Which of the following is the most accurate description of that person?

Accepted Answer

A)  lazy 
B)  a free rider 
C)  a forced rider 
D)  tragedy of the commons 
A)  lazy 
B)  a free rider 
C)  a forced rider 
D)  tragedy of the commons

Question 17

If one person uses a good and thereby diminishes the use of the good by others, the good is rival.

Accepted Answer

A) True 
 B)False

Question 18

A good is excludable if:

Accepted Answer

A)  people who do not pay cannot be easily prevented from using the good. 
B)  one person's use of the good does not reduce the ability of another person to use the same good. 
C)  people who do not pay can be easily prevented from using the good. 
D)  it is Wi-Fi or a similar service. 
A)  people who do not pay cannot be easily prevented from using the good. 
B)  one person's use of the good does not reduce the ability of another person to use the same good. 
C)  people who do not pay can be easily prevented from using the good. 
D)  it is Wi-Fi or a similar service.

Question 19

______ pioneered the use of individual transferable quotas.

Accepted Answer

A)  Australia 
B)  The United States of America 
C)  Japan 
D)  New Zealand 
A)  Australia 
B)  The United States of America 
C)  Japan 
D)  New Zealand

Question 20

Entrepreneurs are constantly looking for ways to turn nonexcludable, nonrival goods, such as television, into club goods.

Accepted Answer

A) True 
 B)False

Exam 19: Public Goods and the Tragedy of the Commons

Which of the following is a list of excludable and nonrival goods only?

Cable TV is nonrival and excludable. Contact lenses are rival and excludable. Public goods are nonrival and nonexcludable. Nonrival private goods are excludable.

The tragedy of the commons problem is a type of negative externality.

New Zealand's individual transfer quotas: I. work by limiting the amount of fish that each individual fisherman can fish. II. resulted in reduced fish catches after they were established. III. work just like the tradable pollution allowances in the United States.

Owned resources still face the tragedy of the commons.

Economic markets have a hard time producing the efficient quantity of a public good because of forced riders.

Which of the following solutions allows for an efficient allocation of a public good?

A free rider is someone who receives the benefit of a good and avoids paying for it.

Cable TV is an example of a:

Markets tend to underproduce public goods, even though they are highly valued goods.

Which of the following goods is NOT rival and NOT excludable?

Private goods can be provided by competitive markets because they are:

The sun has features of a:

Which of the following is a list of common resources only?

In group projects for class there is often one member who does noticeably less work than others. Which of the following is the most accurate description of that person?

If one person uses a good and thereby diminishes the use of the good by others, the good is rival.

A good is excludable if:

______ pioneered the use of individual transferable quotas.

Entrepreneurs are constantly looking for ways to turn nonexcludable, nonrival goods, such as television, into club goods.

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters