Question 1

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

Accepted Answer

A) True 
 B)False

Question 2

A free rider is a person who pays for a good but does not receive the benefit of it.

Accepted Answer

A) True 
 B)False

Question 3

Hoa owns 40 acres of land. Hoa sells the land to a real estate developer who builds a subdivision with 20 houses. The land is an example of a good that is

Accepted Answer

A) both rival in consumption and excludable. 
B) neither rival in consumption nor excludable. 
C) excludable, but not rival in consumption. 
D) rival in consumption, but not excludable. 
A) both rival in consumption and excludable. 
B) neither rival in consumption nor excludable. 
C) excludable, but not rival in consumption. 
D) rival in consumption, but not excludable.

Question 4

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 private good? Briefly explain.

Accepted Answer

The fish fillet served by the

Question 5

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

Accepted Answer

A) True 
 B)False

Question 6

The failure of markets to adequately protect the environment can be viewed either as a problem of

Accepted Answer

A) externalities or as a problem of common resources. 
B) externalities or as a problem of private goods. 
C) the overprovision of public goods or as a problem of the underprovision of private goods. 
D) club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity. 
A) externalities or as a problem of common resources. 
B) externalities or as a problem of private goods. 
C) the overprovision of public goods or as a problem of the underprovision of private goods. 
D) club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity.

Question 7

Market failure associated with the free-rider problem is a result of

Accepted Answer

A) a problem associated with pollution. 
B) benefits that accrue to those who don't pay. 
C) benefits that accrue to providers of the product. 
D) market power. 
A) a problem associated with pollution. 
B) benefits that accrue to those who don't pay. 
C) benefits that accrue to providers of the product. 
D) market power.

Question 8

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

Accepted Answer

Private go

Question 9

Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Question 10

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.

Accepted Answer

The exotic fish in the huge aquarium res

Question 11

A traffic light at an intersection is

Accepted Answer

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

Question 12

Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

Accepted Answer

Basic research is ne

Question 13

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Accepted Answer

A) True 
 B)False

Question 14

The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of fertilizer is 0.008. The cost of imposing a regulation that would ban the chemical is $31 million. If the value of a human life is equal to $8 million, how many people must the policy affect in order for the benefits to exceed the costs?

Accepted Answer

A) 248 
B) 485 
C) 3,101 
D) 3,876 
A) 248 
B) 485 
C) 3,101 
D) 3,876

Question 15

Private decisions about consumption of common resources and production of public goods usually lead to an

Accepted Answer

A) efficient allocation of resources and external effects. 
B) efficient allocation of resources and no external effects. 
C) inefficient allocation of resources and external effects. 
D) inefficient allocation of resources and no external effects. 
A) efficient allocation of resources and external effects. 
B) efficient allocation of resources and no external effects. 
C) inefficient allocation of resources and external effects. 
D) inefficient allocation of resources and no external effects.

Question 16

If the government decides to build a new community center, the first step would be to conduct a study to determine the value of the project. The study is called a

Accepted Answer

A) budget analysis. 
B) project analysis. 
C) reimbursement analysis. 
D) cost-benefit analysis. 
A) budget analysis. 
B) project analysis. 
C) reimbursement analysis. 
D) cost-benefit analysis.

Question 17

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

Accepted Answer

Eliminating poverty is not a good that t

Question 18

The provision of a public good generates a

Accepted Answer

A) positive externality, as does the use of a common resource. 
B) positive externality and the use of a common resource generates a negative externality. 
C) negative externality, as does the use of a common resource. 
D) negative externality and the use of a common resource generates a positive externality. 
A) positive externality, as does the use of a common resource. 
B) positive externality and the use of a common resource generates a negative externality. 
C) negative externality, as does the use of a common resource. 
D) negative externality and the use of a common resource generates a positive externality.

Question 19

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 20

National Public Radio would be considered a club good.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

A free rider is a person who pays for a good but does not receive the benefit of it.

Hoa owns 40 acres of land. Hoa sells the land to a real estate developer who builds a subdivision with 20 houses. The land is an example of a good that 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. Which of these goods is the best example of a private good? Briefly explain.

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

The failure of markets to adequately protect the environment can be viewed either as a problem of

Market failure associated with the free-rider problem is a result of

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

Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances.

A traffic light at an intersection is

Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Private decisions about consumption of common resources and production of public goods usually lead to an

If the government decides to build a new community center, the first step would be to conduct a study to determine the value of the project. The study is called a

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

The provision of a public good generates a

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

National Public Radio would be considered a club 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 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

Filters

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