Exam 11: Public Goods and Common Resources

Many species of animals are common resources and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species, even though there is such a high demand for beef?

Which of the following statements is true?

Suppose the owners of a lighthouse demand payments from a nearby port for the lighthouse service, threatening to turn off the lighthouse otherwise. The lighthouse is now closer to a private good.

The government is deciding whether to build a new $2 billion highway from one side of the city to the other. Some business and consumer groups are questioning the value that such an expensive highway will bring to the city. The government says that it has done a cost-benefit analysis which shows that the highway will bring a slightly positive return, and therefore the highway should be built. Which of the following statements is true?

It is often important in cost-benefit analysis to distinguish between non-market values and direct values attached to direct use. Why is it important to include non-market values in an analysis?

Oil deposits are often considered a common resource. If this is true, then for a group of land owners over an oil pool:

If a road is uncongested, then use of that road by an additional person would lead to a:

A policy that allows landowners to raise and kill elephants on their own properties is trying to:

If the use of a common resource is not regulated, it:

Apparently, human life does have an implicit dollar value, due to the observable fact that people take voluntary risks every day.

In the Tragedy of the Commons, joint action among the individual citizens would be necessary to solve their common resource problem, if government does not intervene.

An example of a market failure associated with the provision of public good in the private market is:

Jack, Aaron and Katie have a new television, which has stopped working. For a long time, no one takes the television to be fixed. Why might this have occurred?

Because of the free-rider problem, respondents to cost-benefit surveys:

The most effective ways to solve highway congestion is to:

Roads can be considered either public goods or common resources, depending on how congested they are.

Once a common resource is available for consumption, policymakers need to be concerned with:

A poor way to value human life is to measure how much extra money a person needs to be paid to take on a risky job.

A museum exhibition is excludable because it is possible to prevent someone from seeing the show.

A good is rival if: