Exam 11: Public Goods and Common Resources

A free rider is a person who

It is common knowledge that many U.S. national parks have become overused. One possible solution to this problem is to

What do we mean when we say that a good is rival in consumption?

What do clean air in New York City and elephants in Africa have in common?

The Great Lakes are

Examples of goods that are excludable include

Table 11-1 Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident's willingness to pay for each acre of the park. -Refer to Table 11-1. Suppose the cost to build the park is $9 per acre and that the residents have agreed to split the cost of building the park equally. If the residents vote to determine the size of park to build, basing their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the largest park size for which the majority of residents would vote "yes?"

Figure 11-1 -Refer to Figure 11-1. The box labeled A represents what type of good?

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?

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

The Tragedy of the Commons occurs because

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.

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

Because it is

Which of the following goods is rival and excludable?

If a road is congested, then use of that road by an additional person would lead to a

Figure 11-1 -Refer to Figure 11-1. In which box - A, B, C, or D - does each of the following types of roads belong? (Consider each type of road separately.) • an uncongested toll road • an uncongested nontoll road • a congested toll road • a congested nontoll road

Table 11-5 A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip. -Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $750 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. Which of the following statements is correct?

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

Producers have little incentive to produce a public good because