Question 1

A good is excludable if

Accepted Answer

A) one person's use of the good diminishes another person's enjoyment of it. 
B) the government can regulate its availability. 
C) it is not a normal good. 
D) people can be prevented from using it. 
A) one person's use of the good diminishes another person's enjoyment of it. 
B) the government can regulate its availability. 
C) it is not a normal good. 
D) people can be prevented from using it.

Question 2

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

A traffic light would be considered a common resource.

Accepted Answer

A) True 
 B)False

Question 5

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

Accepted Answer

A) True 
 B)False

Question 6

The Pennsylvania Turnpike is a tolled freeway running through the state of Pennsylvania. Motorists must pay tolls at various points along the Turnpike based on the distance they traveled on the freeway. Suppose that despite the tolls, many motorists in the urban areas use the Turnpike causing traffic to slow during peak times. What type of good would the Turnpike be classified as in this case?

Accepted Answer

A) Private good 
B) Club good 
C) Common resource 
D) Public good 
A) Private good 
B) Club good 
C) Common resource 
D) Public good

Question 7

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 8

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

Accepted Answer

A) True 
 B)False

Question 9

Before considering any public project, the government should

Accepted Answer

A) only measure the total benefits of the project. 
B) only measure the cost of the project. 
C) conduct a cost-benefit analysis and compare the total cost and total benefits of the project. 
D) infer that citizens who vote for a project are willing to pay equally for it. 
A) only measure the total benefits of the project. 
B) only measure the cost of the project. 
C) conduct a cost-benefit analysis and compare the total cost and total benefits of the project. 
D) infer that citizens who vote for a project are willing to pay equally for it.

Question 10

On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. An economist would suggest that

Accepted Answer

A) every electric customer has an incentive to prevent the system from overloading, so this voluntary approach is the most efficient. 
B) it would be more efficient if the electric company raised its rates for electricity at peak times. 
C) it would be more efficient to have a lottery to decide who had to cut back their use of electricity at peak times. 
D) it would be more efficient to force everyone to cut their usage of electricity by the same amount. 
A) every electric customer has an incentive to prevent the system from overloading, so this voluntary approach is the most efficient. 
B) it would be more efficient if the electric company raised its rates for electricity at peak times. 
C) it would be more efficient to have a lottery to decide who had to cut back their use of electricity at peak times. 
D) it would be more efficient to force everyone to cut their usage of electricity by the same amount.

Question 11

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 12

Are common resources excludable? Are they rival in consumption?

Accepted Answer

No, common resources

Question 13

The privately-owned school system in Fort Yaman has a virtually unlimited capacity. It accepts all applicants and operates on both tuition and private donations. Although every resident places value on having an educated community, the school's revenues have suffered lately due to a large decline in private donations from the elderly population. Because the benefit that each citizen receives from having an educated community is a public good, which of the following would not be correct?

Accepted Answer

A) The free-rider problem causes the private market to undersupply education to the community. 
B) The government can potentially help the market reach a socially optimal level of education. 
C) A tax increase to pay for education could potentially make the community better off. 
D) The private market is the best way to supply education. 
A) The free-rider problem causes the private market to undersupply education to the community. 
B) The government can potentially help the market reach a socially optimal level of education. 
C) A tax increase to pay for education could potentially make the community better off. 
D) The private market is the best way to supply education.

Question 14

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would not be considered a private good?

Accepted Answer

A) A pencil 
B) A sweater 
C) A jeep 
D) Cable TV service 
A) A pencil 
B) A sweater 
C) A jeep 
D) Cable TV service

Question 16

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 17

Figure 11-1
​
  
-Refer to Figure 11-1. A membership at a gym that always has space in classes and on machines is an example of the type of good represented by Box

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 18

A textbook is a

Accepted Answer

A) private good and the knowledge that one gains from reading the book is a common resource. 
B) private good and the knowledge that one gains from reading the book is a public good. 
C) common resource and the knowledge that one gains from reading the book is a public good. 
D) common resource and the knowledge that one gains from reading the book is a private good. 
A) private good and the knowledge that one gains from reading the book is a common resource. 
B) private good and the knowledge that one gains from reading the book is a public good. 
C) common resource and the knowledge that one gains from reading the book is a public good. 
D) common resource and the knowledge that one gains from reading the book is a private good.

Question 19

Goods that are excludable 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 20

A study that compares the costs and benefits to society of providing a public good is called externality analysis.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

A good is excludable if

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

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

A traffic light would be considered a common resource.

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

A free rider is a person who

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

Before considering any public project, the government should

On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. An economist would suggest that

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

Are common resources excludable? Are they rival in consumption?

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Which of the following would not be considered a private good?

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

Figure 11-1 ​ -Refer to Figure 11-1. A membership at a gym that always has space in classes and on machines is an example of the type of good represented by Box

A textbook is a

Goods that are excludable include both

A study that compares the costs and benefits to society of providing a public good is called externality analysis.

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. A membership at a gym that always has space in classes and on machines is an example of the type of good represented by Box