Question 1

An internet radio broadcast is

Accepted Answer

A) excludable and rival in consumption. 
B) excludable and not rival in consumption. 
C) not excludable and rival in consumption. 
D) not excludable and not rival in consumption. 
A) excludable and rival in consumption. 
B) excludable and not rival in consumption. 
C) not excludable and rival in consumption. 
D) not excludable and not rival in consumption.

Question 2

Pollution is a

Accepted Answer

A) problem that is entirely unrelated to the parable called the Tragedy of the Commons. 
B) problem that cannot be remedied with regulations or corrective taxes. 
C) negative externality that can be viewed as a public-goods problem. 
D) negative externality that can be viewed as a common-resource problem. 
A) problem that is entirely unrelated to the parable called the Tragedy of the Commons. 
B) problem that cannot be remedied with regulations or corrective taxes. 
C) negative externality that can be viewed as a public-goods problem. 
D) negative externality that can be viewed as a common-resource problem.

Question 3

Most goods in the economy are

Accepted Answer

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

Question 4

Most goods in our economy are allocated in markets, where buyers pay for what they receive and sellers are paid for what they provide.

Accepted Answer

A) True 
 B)False

Question 5

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.

Question 6

Scenario 11-1
Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late.
-Refer to Scenario 11-1. Suppose Becky lives in a city with an optional toll lane that assures a drive at the posted speed limit. She leaves her office at 5:00 for her usual 30 minute commute but hears on the radio that if she drives in the non-toll lanes, her commute will take 1 hour due to an accident. Becky should

Accepted Answer

A) call the daycare and tell them to expect her at 6:00. 
B) choose to drive in the free-flowing toll lane as long as the toll is less than $10. 
C) choose to drive in the free-flowing toll lane as long as the toll is less than $30. 
D) choose to drive an alternate route to try to avoid some of the traffic. 
A) call the daycare and tell them to expect her at 6:00. 
B) choose to drive in the free-flowing toll lane as long as the toll is less than $10. 
C) choose to drive in the free-flowing toll lane as long as the toll is less than $30. 
D) choose to drive an alternate route to try to avoid some of the traffic.

Question 7

Figure 11-1  
-Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Accepted Answer

A) Box A, which represents private goods. 
B) Box B, which represents common resources. 
C) Box C, which represents common resources. 
D) Box D, which represents public goods. 
A) Box A, which represents private goods. 
B) Box B, which represents common resources. 
C) Box C, which represents common resources. 
D) Box D, which represents public goods.

Question 8

Most lighthouses are operated by the government because

Accepted Answer

A) of the free-rider problem. 
B) lighthouses are no longer valued by society. 
C) most lighthouses are only tourist attractions in state and national parks. 
D) shipping companies would not be able to afford maintenance fees for lighthouses. 
A) of the free-rider problem. 
B) lighthouses are no longer valued by society. 
C) most lighthouses are only tourist attractions in state and national parks. 
D) shipping companies would not be able to afford maintenance fees for lighthouses.

Question 9

A free rider is a person who

Accepted Answer

A) will only purchase a product on sale. 
B) receives the benefit of a good but avoids paying for it. 
C) can produce a good at no cost. 
D) rides public transit regularly. 
A) will only purchase a product on sale. 
B) receives the benefit of a good but avoids paying for it. 
C) can produce a good at no cost. 
D) rides public transit regularly.

Question 10

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 $120 and the 4 homeowners have agreed to split all tree-planting costs equally. How many trees would Adams prefer to plant?

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 3 
A) 0 
B) 1 
C) 2 
D) 3

Question 11

Private markets usually fail to provide lighthouses because

Accepted Answer

A) lighthouses cost too much to build relative to their benefits. 
B) government intervention makes it hard for private lighthouse owners to compete in the market. 
C) ship captains have incentives to use lighthouses without paying. 
D) lighthouses are valued very little by ship captains these days. 
A) lighthouses cost too much to build relative to their benefits. 
B) government intervention makes it hard for private lighthouse owners to compete in the market. 
C) ship captains have incentives to use lighthouses without paying. 
D) lighthouses are valued very little by ship captains these days.

Question 12

A town engineer comes to the city council with a proposal to install a traffic light at a certain intersection that currently has a stop sign. The benefit of the traffic light is increased safety because the light will reduce the incidence of fatal traffic accidents by 50 percent per year. Which of the following statements is correct?

Accepted Answer

A) The city council should vote to install the traffic light because the benefits will outweigh the costs. 
B) The city council should carefully evaluate the benefits of reduced fatalities against only the explicit costs of the light. 
C) The city council should carefully evaluate the benefits of reduced fatalities against the costs of the light and of the extra time that drivers will spend waiting for a green light. 
D) The costs will invariably outweigh the benefits. 
A) The city council should vote to install the traffic light because the benefits will outweigh the costs. 
B) The city council should carefully evaluate the benefits of reduced fatalities against only the explicit costs of the light. 
C) The city council should carefully evaluate the benefits of reduced fatalities against the costs of the light and of the extra time that drivers will spend waiting for a green light. 
D) The costs will invariably outweigh the benefits.

Question 13

Figure 11-1  
-Refer to Figure 11-1. Which of the following items is not an example of the type of good represented by Box D?

Accepted Answer

A) a mathematical theorem 
B) an uncongested toll road 
C) national defense 
D) fighting poverty 
A) a mathematical theorem 
B) an uncongested toll road 
C) national defense 
D) fighting poverty

Question 14

Advocates of antipoverty programs believe that fighting poverty

Accepted Answer

A) can make everyone better off. 
B) is most successfully accomplished by charities. 
C) is most efficiently accomplished by the market. 
D) reduces the well-being of tax payers. 
A) can make everyone better off. 
B) is most successfully accomplished by charities. 
C) is most efficiently accomplished by the market. 
D) reduces the well-being of tax payers.

Question 15

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Accepted Answer

A) True 
 B)False

Question 16

Before considering any public project, the government should
(i)compare the total cost and total benefits of the project.
(ii)conduct a cost-benefit analysis.
(iii)infer that citizens who vote for a project are willing to pay equally for it.

Accepted Answer

A) (i) only 
B) (ii) only 
C) (i) and (ii) only 
D) (i), (ii), and (iii) 
A) (i) only 
B) (ii) only 
C) (i) and (ii) only 
D) (i), (ii), and (iii)

Question 17

Although national defense is currently a public good, economists who advocate small government generally agree that the U.S. should privatize national defense to increase the efficiency of the good.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following goods is the best example of a public good?

Accepted Answer

A) garbage-collection services that are provided by a municipal government 
B) music that is broadcast over the airwaves by a privately-owned FM radio station 
C) electricity that is provided to farmhouses by a rural electric cooperative 
D) cable TV services that are provided by a privately-owned firm that is regulated by the government of the city in which it operates 
A) garbage-collection services that are provided by a municipal government 
B) music that is broadcast over the airwaves by a privately-owned FM radio station 
C) electricity that is provided to farmhouses by a rural electric cooperative 
D) cable TV services that are provided by a privately-owned firm that is regulated by the government of the city in which it operates

Question 19

Figure 11-1  
-Refer to Figure 11-1. The box labeled A 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 20

One solution to the "Tragedy of the Commons" is to turn the common resource into a private good.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

An internet radio broadcast is

Pollution is a

Most goods in the economy are

Most goods in our economy are allocated in markets, where buyers pay for what they receive and sellers are paid for what they provide.

When a good is excludable,

Figure 11-1 -Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Most lighthouses are operated by the government because

A free rider is a person who

Private markets usually fail to provide lighthouses because

Figure 11-1 -Refer to Figure 11-1. Which of the following items is not an example of the type of good represented by Box D?

Advocates of antipoverty programs believe that fighting poverty

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Before considering any public project, the government should (i)compare the total cost and total benefits of the project. (ii)conduct a cost-benefit analysis. (iii)infer that citizens who vote for a project are willing to pay equally for it.

Although national defense is currently a public good, economists who advocate small government generally agree that the U.S. should privatize national defense to increase the efficiency of the good.

Which of the following goods is the best example of a public good?

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

One solution to the "Tragedy of the Commons" is to turn the common resource into a private good.

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters