Question 1

Are common resources excludable? Are they rival in consumption?

Accepted Answer

No, common resources

Question 2

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 3

A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Which of the following is not a public good?

Accepted Answer

A) national defense 
B) patented technological knowledge 
C) general knowledge 
D) the elimination of poverty 
A) national defense 
B) patented technological knowledge 
C) general knowledge 
D) the elimination of poverty

Question 6

Examples of goods that are excludable include

Accepted Answer

A) fireworks displays and fire protection. 
B) internet radio subscriptions and knowledge. 
C) premium movie channels and streetlights. 
D) mobile phones and fire protection. 
A) fireworks displays and fire protection. 
B) internet radio subscriptions and knowledge. 
C) premium movie channels and streetlights. 
D) mobile phones and fire protection.

Question 7

Because the benefits of basic research are obvious and easy to measure, it is likely that the public sector pays for the right amount and the right kinds of basic research.

Accepted Answer

A) True 
 B)False

Question 8

In what way do common resources give rise to negative externalities?

Accepted Answer

When one person uses a common

Question 9

Table 11-2
Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight.  
-Refer to Table 11-2. Suppose the cost to install each streetlight is $600 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Brown's like the town to install?

Accepted Answer

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

Question 10

When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis

Accepted Answer

A) are forced to pursue any project in which a single human life is saved. 
B) are likely to make decisions that optimally allocate society's scarce resources. 
C) would not pursue any public project that would not save human life. 
D) would be forced to rely on private markets to provide public goods. 
A) are forced to pursue any project in which a single human life is saved. 
B) are likely to make decisions that optimally allocate society's scarce resources. 
C) would not pursue any public project that would not save human life. 
D) would be forced to rely on private markets to provide public goods.

Question 11

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 $220 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s) would be in favor of planting at least 3 trees?

Accepted Answer

A) only Benitez 
B) only Benitez and Chen 
C) only Benitez, Chen, and Davis 
D) Adams, Benitez, Chen, and Davis 
A) only Benitez 
B) only Benitez and Chen 
C) only Benitez, Chen, and Davis 
D) Adams, Benitez, Chen, and Davis

Question 12

Pay-per-view broadcasts are

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 13

Stewart is a lobsterman. His traps are

Accepted Answer

A) private goods and the lobster he catches are common resources. 
B) private goods and the lobster he catches are public goods. 
C) rival in consumption and the lobster he catches are not rival in consumption. 
D) not rival in consumption and the lobster he catches are not rival in consumption. 
A) private goods and the lobster he catches are common resources. 
B) private goods and the lobster he catches are public goods. 
C) rival in consumption and the lobster he catches are not rival in consumption. 
D) not rival in consumption and the lobster he catches are not rival in consumption.

Question 14

Congressman Smith and Congresswoman Johnson both consider themselves advocates for the national parks and are introducing different bills designed to benefit the parks. Congressman Smith's bill calls for an increase in the entrance fees. Congresswoman Johnson's bill calls for a decrease in the entrance fees. Which of the bills would be more effective at ensuring the quality of the national parks?

Accepted Answer

A) Congressman Smith's bill because it will reduce the overuse of the parks 
B) Congresswoman Johnson's bill because more visitors means more citizens will value and care for the parks 
C) Both bills would be equally effective. 
D) Neither bill would be effective. 
A) Congressman Smith's bill because it will reduce the overuse of the parks 
B) Congresswoman Johnson's bill because more visitors means more citizens will value and care for the parks 
C) Both bills would be equally effective. 
D) Neither bill would be effective.

Question 15

Which of the following quotations illustrates the Tragedy of the Commons?

Accepted Answer

A) "A bird in the hand is worth two in the bush." 
B) "The only difference between the rich and other people is that the rich have more money." 
C) "What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." 
D) "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head." 
A) "A bird in the hand is worth two in the bush." 
B) "The only difference between the rich and other people is that the rich have more money." 
C) "What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." 
D) "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head."

Question 16

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Accepted Answer

A) True 
 B)False

Question 17

The national defense of the United States is not excludable because

Accepted Answer

A) my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States. 
B) my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States. 
C) once the nation is defended, it is impossible to prevent any single person from enjoying the benefit of this defense. 
D) once the nation is defended, it is possible to prevent any single person from enjoying the benefit of this defense. 
A) my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States. 
B) my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States. 
C) once the nation is defended, it is impossible to prevent any single person from enjoying the benefit of this defense. 
D) once the nation is defended, it is possible to prevent any single person from enjoying the benefit of this defense.

Question 18

National defense is provided by the government because

Accepted Answer

A) it is impossible for private markets to produce public goods. 
B) products provided by the government are produced more efficiently. 
C) free-riders make it difficult for private markets to supply the socially optimal quantity. 
D) public goods increase government revenues. 
A) it is impossible for private markets to produce public goods. 
B) products provided by the government are produced more efficiently. 
C) free-riders make it difficult for private markets to supply the socially optimal quantity. 
D) public goods increase government revenues.

Question 19

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.

Accepted Answer

The exotic fish in the huge aq

Question 20

Some goods can be classified as either public goods or private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

Are common resources excludable? Are they rival in consumption?

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

A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.

Goods that are rival in consumption include both

Which of the following is not a public good?

Examples of goods that are excludable include

Because the benefits of basic research are obvious and easy to measure, it is likely that the public sector pays for the right amount and the right kinds of basic research.

In what way do common resources give rise to negative externalities?

When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis

Pay-per-view broadcasts are

Stewart is a lobsterman. His traps are

Which of the following quotations illustrates the Tragedy of the Commons?

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

The national defense of the United States is not excludable because

National defense is provided by the government because

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.

Some goods can be classified as either public goods or private goods depending on the circumstances.

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

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