Exam 11: Public Goods and Common Resources

The government provides public goods because

Table 11-4 There are four homes along Belmont Circle, which surrounds a small plot of land. The land currently has no trees, and the 4 homeowners -- Adams, Benitez, Chen, and Davis -- are considering the idea of contributing to a pool of money that will be used to plant up to 4 trees. The table represents their willingness to pay, that is, the maximum amount that each homeowner is willing to contribute toward each tree. -Refer to Table 11-4. Suppose the cost to plant each tree is $380 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s) would be opposed to planting any trees?

National defense is provided by the government because

Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?

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 $100 per hour. How many hours should be spent cleaning the lake to maximize total surplus for the residents in Widgetapolis?

A cost-benefit analysis of a highway is difficult to conduct because analysts

Figure 11-1 -Refer to Figure 11-1. With which of the boxes - A, B, C, or D - do we associate the Tragedy of the Commons?

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

Tolls are not effective in altering people's incentives to drive during rush hour.

A cable television broadcast of a movie is

Scenario 11-3 Consider the following goods: • a fish fillet served at a restaurant • fish in the ocean • exotic fish in a huge aquarium in a privately-owned building -Refer to Scenario 11-3. Do any of these goods cause an externality? If so, which one(s)? Positive or negative? Briefly explain.

What causes the Tragedy of the Commons? (i) Social and private incentives differ. (ii) Common resources are not rival in consumption and are not excludable.(iii) Common resources are not excludable but are rival in consumption.

Goods that are not rival in consumption include both

Which of the following goods is rival in consumption and excludable?

A tax on gasoline often reduces road congestion because gasoline

Which of the following is most likely to face extinction?

The phenomenon of free riding is most closely associated with which type of good?

Scenario 11-3 Consider the following goods: • a fish fillet served at a restaurant • fish in the ocean • exotic fish in a huge aquarium in a privately-owned building -Refer to Scenario 11-3. Which of these goods is the best example of a club good? Briefly explain.

Figure 11-1 -Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong?

Markets do not ensure that the air we breathe is clean because