Question 1

Which of the following quotations illustrates the Tragedy of the Commons?

Accepted Answer

A) "A bird in the hand is worth two in the bush." 
B) "The only difference between the rich and other people is that the rich have more money." 
C) "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." 
D) "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head." 
A) "A bird in the hand is worth two in the bush." 
B) "The only difference between the rich and other people is that the rich have more money." 
C) "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." 
D) "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head." C

Question 2

It would always be a mistake to view

Accepted Answer

A) a streetlight as a common resource. 
B) a nontoll road as a public good. 
C) the environment as a common resource. 
D) a lighthouse as a public good. 
A) a streetlight as a common resource. 
B) a nontoll road as a public good. 
C) the environment as a common resource. 
D) a lighthouse as a public good. A

Question 3

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Accepted Answer

A) Elephants live in Africa, whereas cows live in the United States. 
B) Elephants are a common resource. 
C) Cows are a common resource. 
D) Cows are a public good. 
A) Elephants live in Africa, whereas cows live in the United States. 
B) Elephants are a common resource. 
C) Cows are a common resource. 
D) Cows are a public good. B

Question 4

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Accepted Answer

A) True 
 B)False

Question 5

One way to place a value on human life is to examine the risks that people voluntarily take and how much they must be paid for taking them. What is the approximate value of a human life according to studies that use this approach?

Accepted Answer

According to these studies, th

Question 6

By driving onto a congested road for which no toll is charged, a driver

Accepted Answer

A) contributes to the overuse of a common resource. 
B) contributes to a negative-externality problem. 
C) is inflicting additional time cost on all of the other drivers. 
D) All of the above are correct. 
A) contributes to the overuse of a common resource. 
B) contributes to a negative-externality problem. 
C) is inflicting additional time cost on all of the other drivers. 
D) All of the above are correct.

Question 7

A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.

Accepted Answer

A) True 
 B)False

Question 8

The commercial value of ivory is a threat to the elephant, but the commercial value of beef is a guardian of the cow. This is because

Accepted Answer

A) the cow is raised in developed countries, while the elephant lives primarily in less-developed countries. 
B) cows are private goods, while elephants tend to roam freely without owners. 
C) cows and elephants are public goods, but ivory is nonrival. 
D) ivory is nonrival and nonexclusive, but beef is rival and exclusive. 
A) the cow is raised in developed countries, while the elephant lives primarily in less-developed countries. 
B) cows are private goods, while elephants tend to roam freely without owners. 
C) cows and elephants are public goods, but ivory is nonrival. 
D) ivory is nonrival and nonexclusive, but beef is rival and exclusive.

Question 9

What particular characteristic do private goods and common resources have in common?

Accepted Answer

Private goods and co

Question 10

Suppose a human life is worth $10 million. Installing a better lighting system in the city park would reduce the risk of someone being murdered there from 3.5 to 2.9 percent over the life of the system. The city should install the new lighting system if its cost does not exceed

Accepted Answer

A) $60,000. 
B) $290,000. 
C) $350,000. 
D) $600,000. 
A) $60,000. 
B) $290,000. 
C) $350,000. 
D) $600,000.

Question 11

Without government intervention, public goods tend to be

Accepted Answer

A) overproduced and common resources tend to be overconsumed. 
B) overproduced and common resources tend to be underconsumed. 
C) underproduced and common resources tend to be overconsumed. 
D) underproduced and common resources tend to be underconsumed. 
A) overproduced and common resources tend to be overconsumed. 
B) overproduced and common resources tend to be underconsumed. 
C) underproduced and common resources tend to be overconsumed. 
D) underproduced and common resources tend to be underconsumed.

Question 12

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 13

The enclosure movement in England in the 17th century represented an attempt to transform

Accepted Answer

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

Question 14

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.

Question 15

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

Accepted Answer

A) the number of people who benefit is small and it is impossible to prevent anyone from benefiting. 
B) the number of beneficiaries is small and it is possible to prevent some people from benefiting. 
C) the number of beneficiaries is large and it is impossible to prevent anyone from benefiting. 
D) the number of beneficiaries is large and it is possible to prevent some people from benefiting. 
A) the number of people who benefit is small and it is impossible to prevent anyone from benefiting. 
B) the number of beneficiaries is small and it is possible to prevent some people from benefiting. 
C) the number of beneficiaries is large and it is impossible to prevent anyone from benefiting. 
D) the number of beneficiaries is large and it is possible to prevent some people from benefiting.

Question 16

The Mansfield Public Library has a large number of books that anyone with a library card may borrow. Anyone can obtain a card for free. Because the number of copies of each book is limited, not everyone can have the same book at the same time. What type of good would the library books be classified as in this case?

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 17

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

Accepted Answer

A) True 
 B)False

Question 18

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 19

Public schools, parks, libraries, and roads are paid for largely through tax revenue because

Accepted Answer

A) society finds them so valuable that citizens are happy to pay for their full cost. 
B) these goods create a free-rider problem. 
C) if they were funded privately, too many of these goods would be produced. 
D) All of the above are correct. 
A) society finds them so valuable that citizens are happy to pay for their full cost. 
B) these goods create a free-rider problem. 
C) if they were funded privately, too many of these goods would be produced. 
D) All of the above are correct.

Question 20

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.

Exam 11: Public Goods and Common Resources

Which of the following quotations illustrates the Tragedy of the Commons?

It would always be a mistake to view

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

One way to place a value on human life is to examine the risks that people voluntarily take and how much they must be paid for taking them. What is the approximate value of a human life according to studies that use this approach?

By driving onto a congested road for which no toll is charged, a driver

A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.

The commercial value of ivory is a threat to the elephant, but the commercial value of beef is a guardian of the cow. This is because

What particular characteristic do private goods and common resources have in common?

Suppose a human life is worth $10 million. Installing a better lighting system in the city park would reduce the risk of someone being murdered there from 3.5 to 2.9 percent over the life of the system. The city should install the new lighting system if its cost does not exceed

Without government intervention, public goods tend to be

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?

The enclosure movement in England in the 17th century represented an attempt to transform

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

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

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

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

Public schools, parks, libraries, and roads are paid for largely through tax revenue because

When a good is excludable,

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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

The enclosure movement in England in the 17^th century represented an attempt to transform