Question 1

Which of the following is usually true about government-provided goods?

Accepted Answer

A) These goods have a zero opportunity cost. 
B) These goods are not scarce. 
C) People do not have to pay an explicit fee to enjoy these goods. 
D) The invisible hand is at work to ensure these goods are provided in the market 
A) These goods have a zero opportunity cost. 
B) These goods are not scarce. 
C) People do not have to pay an explicit fee to enjoy these goods. 
D) The invisible hand is at work to ensure these goods are provided in the market

Question 2

Even economists who advocate small government agree that national defense is a good that the government should provide.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Accepted Answer

A) Taxing the use of the common resource 
B) Turning the common resource into a club good 
C) Turning the common resource into a private good 
D) Regulating the use of the common resource 
A) Taxing the use of the common resource 
B) Turning the common resource into a club good 
C) Turning the common resource into a private good 
D) Regulating the use of the common resource

Question 4

Knowledge that is patented is a

Accepted Answer

A) public good, whereas knowledge that is not patented is a common resource. 
B) private good, whereas knowledge that is not patented is a club good. 
C) common resource, whereas knowledge that is not patented is a private good. 
D) club good, whereas knowledge that is not patented is a public good. 
A) public good, whereas knowledge that is not patented is a common resource. 
B) private good, whereas knowledge that is not patented is a club good. 
C) common resource, whereas knowledge that is not patented is a private good. 
D) club good, whereas knowledge that is not patented is a public good.

Question 5

Because public goods are

Accepted Answer

A) excludable, people have an incentive to be free riders. 
B) excludable, people do not have an incentive to be free riders. 
C) not excludable, people have an incentive to be free riders. 
D) not excludable, people do not have an incentive to be free riders. 
A) excludable, people have an incentive to be free riders. 
B) excludable, people do not have an incentive to be free riders. 
C) not excludable, people have an incentive to be free riders. 
D) not excludable, people do not have an incentive to be free riders.

Question 6

When property rights are not well established,

Accepted Answer

A) private goods become public goods. 
B) markets fail to allocate resources efficiently. 
C) the distribution of private goods is unfair. 
D) government resources are used inefficiently. 
A) private goods become public goods. 
B) markets fail to allocate resources efficiently. 
C) the distribution of private goods is unfair. 
D) government resources are used inefficiently.

Question 7

Table 11-1
Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents are trying to determine how large, in acres, they should build the public park. The following table shows each resident's willingness to pay for each acre of the park.
​
​
  
-Refer to Table 11-1. Suppose the cost to build the park is $24 per acre. How many acres should the park be to maximize total surplus from the park in Springfield?

Accepted Answer

A) 1 acre 
B) 2 acres 
C) 3 acres 
D) 4 acres 
A) 1 acre 
B) 2 acres 
C) 3 acres 
D) 4 acres

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

Table 11-2
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.
​
 $$\begin{array} { l l l l l } 
\hline \text { Hours } & \text { John } & \text { James } & \text { Mary } & \text { Lydia } \
\hline 1 & \$ 30 & \$ 50 & \$ 40 & \$ 10 \
2 & 25 & 40 & 37 & 9 \
3 & 20 & 30 & 34 & 8 \
4 & 15 & 20 & 30 & 7 \
5 & 9 & 10 & 25 & 6 \
6 & 3 & 0 & 15 & 5 \
7 & 0 & 0 & 5 & 4 \
\hline
\end{array}$$ ​
-Refer to Table 11-2. Suppose the cost to clean the lake is $32 per hour and that the residents have agreed to split the cost of cleaning the lake equally. It would maximize Lydia's surplus if 6 hours of cleaning is done.
​

Accepted Answer

A) True 
 B)False

Question 11

What particular characteristic do private goods and common resources have in common?

Accepted Answer

Private goods and co

Question 12

A pair of jeans is rival but non-excludable.

Accepted Answer

A) True 
 B)False

Question 13

A television broadcast is an example of a good that is

Accepted Answer

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

Question 14

Governments can improve market outcomes for

Accepted Answer

A) public goods but not common resources. 
B) common resources but not public goods. 
C) both public goods and common resources. 
D) neither public goods nor common resources. 
A) public goods but not common resources. 
B) common resources but not public goods. 
C) both public goods and common resources. 
D) neither public goods nor common resources.

Question 15

The parable called the Tragedy of the Commons applies to goods and services such as

Accepted Answer

A) emergency medical services and satellite TV. 
B) tornado sirens and basic research. 
C) grazing land and fishing. 
D) antipoverty programs and national defense. 
A) emergency medical services and satellite TV. 
B) tornado sirens and basic research. 
C) grazing land and fishing. 
D) antipoverty programs and national defense.

Question 16

In almost all cases of common resources, the same problem arises as in the Tragedy of the __________.

Accepted Answer

The answer of In almost all cases of common resources,...

Question 17

Markets fail to allocate resources efficiently when

Accepted Answer

A) demanders and suppliers cannot agree on a price. 
B) goods are rival in consumption and excludable. 
C) property rights are not well established. 
D) too many buyers and sellers exist in the same market. 
A) demanders and suppliers cannot agree on a price. 
B) goods are rival in consumption and excludable. 
C) property rights are not well established. 
D) too many buyers and sellers exist in the same market.

Question 18

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

Accepted Answer

A) resources would be used more efficiently if the government produced the weapons. 
B) resources would be used more efficiently if private firms provided national defense. 
C) weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable. 
D) national defense is rival in consumption and excludable, but weapons are not rival in consumption and not excludable. 
A) resources would be used more efficiently if the government produced the weapons. 
B) resources would be used more efficiently if private firms provided national defense. 
C) weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable. 
D) national defense is rival in consumption and excludable, but weapons are not rival in consumption and not excludable.

Question 19

Luis, Mina, and Daniel all would like a play area while waiting at their children's bus stop. The neighborhood association is considering installing playground equipment at the bus stop. Luis values the equipment at $150, Mina at $100, and Daniel at $100. The equipment and labor for installation cost $300. If Luis, Mina, and Daniel are the only residents who value the equipment, what should the neighborhood association do?

Accepted Answer

A) Install the playground equipment because people would like a play area. 
B) Do not install the playground equipment because the costs outweigh the benefits. 
C) Install the playground equipment because the benefits outweigh the costs. 
D) Do not install the playground equipment to prevent the Tragedy of the Commons problem of overuse. 
A) Install the playground equipment because people would like a play area. 
B) Do not install the playground equipment because the costs outweigh the benefits. 
C) Install the playground equipment because the benefits outweigh the costs. 
D) Do not install the playground equipment to prevent the Tragedy of the Commons problem of overuse.

Question 20

Table 11-2
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.
​
 $$\begin{array} { l l l l l } 
\hline \text { Hours } & \text { John } & \text { James } & \text { Mary } & \text { Lydia } \
\hline 1 & \$ 30 & \$ 50 & \$ 40 & \$ 10 \
2 & 25 & 40 & 37 & 9 \
3 & 20 & 30 & 34 & 8 \
4 & 15 & 20 & 30 & 7 \
5 & 9 & 10 & 25 & 6 \
6 & 3 & 0 & 15 & 5 \
7 & 0 & 0 & 5 & 4 \
\hline
\end{array}$$ ​
-Refer to Table 11-2. Suppose the cost to clean the lake is $32 per hour and that the residents have agreed to split the cost of cleaning the lake equally. It would maximize Mary's surplus if 3 hours of cleaning is done.
​

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

Which of the following is usually true about government-provided goods?

Even economists who advocate small government agree that national defense is a good that the government should provide.

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Knowledge that is patented is a

Because public goods are

When property rights are not well established,

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.

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

What particular characteristic do private goods and common resources have in common?

A pair of jeans is rival but non-excludable.

A television broadcast is an example of a good that is

Governments can improve market outcomes for

The parable called the Tragedy of the Commons applies to goods and services such as

In almost all cases of common resources, the same problem arises as in the Tragedy of the __________.

Markets fail to allocate resources efficiently when

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

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 Nations 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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