Question 1

Which of the following statements is correct?

Accepted Answer

A) The efficient provision of private goods is intrinsically more difficult than the efficient provision of public goods. 
B) The efficient provision of public goods is intrinsically more difficult than the efficient provision of private goods. 
C) Private markets provide quantities of public goods that exceed the socially-efficient quantities of those goods. 
D) Private decision makers utilize quantities of common resources that fall short of the socially-efficient quantities of those resources. 
A) The efficient provision of private goods is intrinsically more difficult than the efficient provision of public goods. 
B) The efficient provision of public goods is intrinsically more difficult than the efficient provision of private goods. 
C) Private markets provide quantities of public goods that exceed the socially-efficient quantities of those goods. 
D) Private decision makers utilize quantities of common resources that fall short of the socially-efficient quantities of those resources.

Question 2

Goods that are rival in consumption include both

Accepted Answer

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

Question 3

If no one can be prevented from using good x, then good x is one of two types of goods. What are those two types?

Accepted Answer

As described, good x

Question 4

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 5

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a

Accepted Answer

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

Question 6

Resources tend to be allocated inefficiently when goods

Accepted Answer

A) are private goods. 
B) are rival in consumption and excludable. 
C) are available free of charge. 
D) are available only at very high prices. 
A) are private goods. 
B) are rival in consumption and excludable. 
C) are available free of charge. 
D) are available only at very high prices.

Question 7

Table 11-6
Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning.   ​
​
-Refer to Table 11-6. Suppose the cost to clean the lake is $40 per hour and that the residents have agreed to split the cost of cleaning the lake equally. If it was decided that the lake will be cleaned for the number of hours that maximizes total surplus of Widgetapolis, how much individual surplus will Mary receive in total?

Accepted Answer

A) -$10 
B) $15 
C) $25 
D) $116 
A) -$10 
B) $15 
C) $25 
D) $116

Question 8

Figure 11-1  
-Refer to Figure 11-1. In which box - A, B, C, or D - does cable TV belong?

Accepted Answer

Cable TV i

Question 9

Table 11-6
Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning.   ​
​
-Refer to Table 11-6. Suppose the cost to clean the lake is $40 per hour and that the residents have agreed to split the cost of cleaning the lake equally. If it was decided that the lake will be cleaned for the number of hours that maximizes total surplus of Widgetapolis, how much individual surplus will James receive in total?

Accepted Answer

A) -$20 
B) -$10 
C) $0 
D) $100 
A) -$20 
B) -$10 
C) $0 
D) $100

Question 10

On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. Suppose that the Minnesota State Park Service institutes a variable fee structure. On weekdays when the picnic areas get little use, the fee is zero. On normal weekends, the fee is $8 per person. On holiday weekends, the fee is $14 per person. The fee system corrects a problem known as the

Accepted Answer

A) Coase theorem. 
B) free rider problem. 
C) Tragedy of the Commons. 
D) public goods problem. 
A) Coase theorem. 
B) free rider problem. 
C) Tragedy of the Commons. 
D) public goods problem.

Question 11

A television broadcast is an example of a good that is

Accepted Answer

A) private. 
B) not rival in consumption. 
C) social. 
D) normal. 
A) private. 
B) not rival in consumption. 
C) social. 
D) normal.

Question 12

Table 11-3
This table describes the police protection demands for three equal sized groups of people in Safetyville. The second, third, and fourth columns show the number of person-hours of police protection per day that a group will demand for a given price (the first column).  
-Refer to Table 11-3. If the marginal cost of police protection is constant at $72 per person-hour, what is the efficient level of police protection to provide?

Accepted Answer

A) 9 person-hours 
B) 18 person-hours 
C) 39 person-hours 
D) 66 person-hours 
A) 9 person-hours 
B) 18 person-hours 
C) 39 person-hours 
D) 66 person-hours

Question 13

Table 11-6
Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning.   ​
​
-Refer to Table 11-6. Suppose the cost to clean the lake is $40 per hour and that the residents have agreed to split the cost of cleaning the lake equally. If it was decided that the lake will be cleaned for the number of hours that maximizes total surplus of Widgetapolis, how much individual surplus will Lydia receive in total?

Accepted Answer

A) -$10 
B) -$5 
C) -$4 
D) $6 
A) -$10 
B) -$5 
C) -$4 
D) $6

Question 14

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 15

Advocates of antipoverty programs claim that

Accepted Answer

A) the government has good information about what people are willing to pay to eliminate poverty. 
B) fighting poverty is a public good. 
C) private sector will incur higher costs than the public sector for these programs. 
D) All of the above are correct. 
A) the government has good information about what people are willing to pay to eliminate poverty. 
B) fighting poverty is a public good. 
C) private sector will incur higher costs than the public sector for these programs. 
D) All of the above are correct.

Question 16

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Accepted Answer

A) True 
 B)False

Question 17

Imagine a 2,000-acre park with picnic benches, trees, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking, and the trash cans overflow with food wrappers on summer afternoons. Otherwise, it is a great place. The park is a common resource because

Accepted Answer

A) people can be prevented from using it. 
B) access is limited due to driving distances. 
C) if too many people use it, one person's use diminishes other peoples' use. 
D) anyone can use it without affecting anyone else. 
A) people can be prevented from using it. 
B) access is limited due to driving distances. 
C) if too many people use it, one person's use diminishes other peoples' use. 
D) anyone can use it without affecting anyone else.

Question 18

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. Then total surplus for the 4 business owners is

Accepted Answer

A) $750 if there is 1 ferry trip. 
B) $40 if there are 2 ferry trips. 
C) $150 if there are 3 ferry trips. 
D) -$400 if there are 4 ferry trips. 
A) $750 if there is 1 ferry trip. 
B) $40 if there are 2 ferry trips. 
C) $150 if there are 3 ferry trips. 
D) -$400 if there are 4 ferry trips.

Question 19

Which of the following is an approach used by economists to calculate the value of a human life?

Accepted Answer

A) comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights 
B) comparing the wages of more risky occupations to less risky occupations 
C) comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features 
D) All of the above are correct. 
A) comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights 
B) comparing the wages of more risky occupations to less risky occupations 
C) comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features 
D) All of the above are correct.

Question 20

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

Accepted Answer

A) basic research is not a public good. 
B) the benefits of basic research are hard to measure. 
C) members of Congress usually have little expertise in science. 
D) Both b and c are correct. 
A) basic research is not a public good. 
B) the benefits of basic research are hard to measure. 
C) members of Congress usually have little expertise in science. 
D) Both b and c are correct.

Which of the following statements is correct?

Goods that are rival in consumption include both

If no one can be prevented from using good x, then good x is one of two types of goods. What are those two types?

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

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a

Resources tend to be allocated inefficiently when goods

Figure 11-1 -Refer to Figure 11-1. In which box - A, B, C, or D - does cable TV belong?

A television broadcast is an example of a good that is

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

Advocates of antipoverty programs claim that

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Which of the following is an approach used by economists to calculate the value of a human life?

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

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

Exam 11: Public Goods and Common Resources

Which of the following statements is correct?

Goods that are rival in consumption include both

If no one can be prevented from using good x, then good x is one of two types of goods. What are those two types?

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

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a

Resources tend to be allocated inefficiently when goods

Figure 11-1 -Refer to Figure 11-1. In which box - A, B, C, or D - does cable TV belong?

A television broadcast is an example of a good that is

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

Advocates of antipoverty programs claim that

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Which of the following is an approach used by economists to calculate the value of a human life?

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

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