Exam 11: Public Goods and Common Resources

A rather large city has only one fire station, two fire trucks, and four firefighters. Is fire protection in this city characterized by rivalry in consumption?

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

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that

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

Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. The cost to build the swimming pool is $1,000,000. Which of the following is the most efficient option?

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

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Which of the following would be considered a private good?

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

Elephant populations in some African countries have started to rise because

Suppose the cost to erect a tornado siren in a small town is $15,000. In addition, suppose the value of a human life is $10 million. By what percentage would the siren need to reduce the risk of a fatality for the benefits of the siren to exceed the costs of the siren?

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

When free riders are present in a market, the market generally fails to provide the efficient outcome.

A lighthouse is typically considered to be a public good because

Goods that are rival in consumption but not excludable would be considered

Which two types of goods are excludable?

A free-rider problem exists for any good that is not

A good is excludable if

Pollution is a negative externality, but it is not appropriate to view the problem of pollution as a common-resource problem.