Question 1

A huge, very busy museum in Europe is:

Accepted Answer

A)  non-excludable and rival 
B)  non-excludable and non-rival 
C)  excludable and rival 
D)  excludable and non-rival 
A)  non-excludable and rival 
B)  non-excludable and non-rival 
C)  excludable and rival 
D)  excludable and non-rival

Question 2

Fire protection is a good example of a natural monopoly good because:

Accepted Answer

A)  it is non-excludable 
B)  it is rival 
C)  protecting an extra house is unlikely to reduce the protection available to others 
D)  all of the above are true 
A)  it is non-excludable 
B)  it is rival 
C)  protecting an extra house is unlikely to reduce the protection available to others 
D)  all of the above are true

Question 3

A town engineer comes to the town council with a proposal to build a traffic light at a certain intersection that currently has a stop sign. The benefit of the traffic light is increased safety. In fact, the traffic light will reduce the incidence of fatal traffic accidents by 50 per cent per year. Which of the following statements is true?

Accepted Answer

A)  the project should definitely be accepted 
B)  the full cost of the stop light will be relatively small since it only includes the purchase and installation costs 
C)  the decision to install the light is likely to require a complex evaluation of the trade-off between the worth of human life and the lost time waiting for the light to change signals 
D)  the cost will invariably outweigh the benefit 
A)  the project should definitely be accepted 
B)  the full cost of the stop light will be relatively small since it only includes the purchase and installation costs 
C)  the decision to install the light is likely to require a complex evaluation of the trade-off between the worth of human life and the lost time waiting for the light to change signals 
D)  the cost will invariably outweigh the benefit

Question 4

Proposals to use road tolls in an effort to reduce traffic congestion are often rejected by the public because:

Accepted Answer

A)  there is no longer sufficient government intervention 
B)  they tax only those who chose to drive on the toll roads 
C)  they allow the rich to drive more than the poor 
D)  all of the above are true 
A)  there is no longer sufficient government intervention 
B)  they tax only those who chose to drive on the toll roads 
C)  they allow the rich to drive more than the poor 
D)  all of the above are true

Question 5

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week timeshare unit in the Blue Mountains of New South Wales. If lift lines at the ski resort become more congested when these 10 additional people start to ski, then:

Accepted Answer

A)  use of the ski resort by all of these ten new skiers will yield a negative externality 
B)  the ski resort can reduce the congestion externality by raising lift ticket prices 
C)  an increase in lift ticket prices could be viewed as a Pigovian tax on the externality of congestion 
D)  all of the above are true 
A)  use of the ski resort by all of these ten new skiers will yield a negative externality 
B)  the ski resort can reduce the congestion externality by raising lift ticket prices 
C)  an increase in lift ticket prices could be viewed as a Pigovian tax on the externality of congestion 
D)  all of the above are true

Question 6

Suppose fish stocks in a lake are being overfished by fishers. To reduce the overfishing problem the government could:

Accepted Answer

A)  establish a tradeable, property right entitlement to the fish 
B)  pay to have more fish transported to the lake 
C)  increase the length of the fishing season 
D)  do all of the above 
A)  establish a tradeable, property right entitlement to the fish 
B)  pay to have more fish transported to the lake 
C)  increase the length of the fishing season 
D)  do all of the above

Question 7

The Tragedy of the Commons occurs because:

Accepted Answer

A)  a common resource is under-utilised 
B)  a common resource is rival in consumption 
C)  crimes are committed in public places 
D)  common resources are subject to exclusionary rules 
A)  a common resource is under-utilised 
B)  a common resource is rival in consumption 
C)  crimes are committed in public places 
D)  common resources are subject to exclusionary rules

Question 8

The Tragedy of the Commons occurs with whales because:

Accepted Answer

A)  whales are a public good 
B)  whaling is a cruel practice 
C)  whalers often don't have property rights to whales 
D)  the private incentives of the whalers are in line with social incentives 
A)  whales are a public good 
B)  whaling is a cruel practice 
C)  whalers often don't have property rights to whales 
D)  the private incentives of the whalers are in line with social incentives

Question 9

The free-rider problem is a problem of:

Accepted Answer

A)  too many people needing the same good 
B)  common resource goods not being subject to property rights 
C)  incentives 
D)  people not revealing their true preferences 
A)  too many people needing the same good 
B)  common resource goods not being subject to property rights 
C)  incentives 
D)  people not revealing their true preferences

Question 10

If it is common knowledge that a given national park has become overused, why might raising the entrance fee to the park NOT solve the problem of overcrowding?

Accepted Answer

A)  no-one would go to the park if the fees were increased 
B)  additional revenue from the higher fee might not be used for the betterment of the park 
C)  the lower usage might more than offset the higher entrance fees, resulting in a loss of revenue 
D)  after they have spent their time and money in travelling to the park, people might not be discouraged from visiting the park by a higher entrance fee 
A)  no-one would go to the park if the fees were increased 
B)  additional revenue from the higher fee might not be used for the betterment of the park 
C)  the lower usage might more than offset the higher entrance fees, resulting in a loss of revenue 
D)  after they have spent their time and money in travelling to the park, people might not be discouraged from visiting the park by a higher entrance fee

Question 11

Countries that have completely outlawed domestic elephant hunting are finally seeing elephant populations start to rise.

Accepted Answer

A) True 
 B)False

Question 12

Goods that are non-excludable and non-rival are:

Accepted Answer

A)  public goods 
B)  private goods 
C)  natural monopolies 
D)  common resources 
A)  public goods 
B)  private goods 
C)  natural monopolies 
D)  common resources

Question 13

The profit motive that stems from private ownership has proven to be detrimental to elephant populations.

Accepted Answer

A) True 
 B)False

Question 14

Congested roads are a good example of a:

Accepted Answer

A)  public good 
B)  car prices that are too low 
C)  common resource 
D)  toll road 
A)  public good 
B)  car prices that are too low 
C)  common resource 
D)  toll road

Question 15

The Australian patent system:

Accepted Answer

A)  makes both general and technical knowledge excludable 
B)  makes only technical knowledge excludable 
C)  creates a disincentive to invent 
D)  does all of the above 
A)  makes both general and technical knowledge excludable 
B)  makes only technical knowledge excludable 
C)  creates a disincentive to invent 
D)  does all of the above

Question 16

Property rights are important to solving some of the problems of goods that the market does not provide adequately.

Accepted Answer

A) True 
 B)False

A huge, very busy museum in Europe is:

Fire protection is a good example of a natural monopoly good because:

Proposals to use road tolls in an effort to reduce traffic congestion are often rejected by the public because:

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week timeshare unit in the Blue Mountains of New South Wales. If lift lines at the ski resort become more congested when these 10 additional people start to ski, then:

Suppose fish stocks in a lake are being overfished by fishers. To reduce the overfishing problem the government could:

The Tragedy of the Commons occurs because:

The Tragedy of the Commons occurs with whales because:

The free-rider problem is a problem of:

If it is common knowledge that a given national park has become overused, why might raising the entrance fee to the park NOT solve the problem of overcrowding?

Countries that have completely outlawed domestic elephant hunting are finally seeing elephant populations start to rise.

Goods that are non-excludable and non-rival are:

The profit motive that stems from private ownership has proven to be detrimental to elephant populations.

Congested roads are a good example of a:

The Australian patent system:

Property rights are important to solving some of the problems of goods that the market does not provide adequately.

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

Application: 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 and Business Strategy

Competition Policy

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Exam 11: Public Goods and Common Resources

A huge, very busy museum in Europe is:

Fire protection is a good example of a natural monopoly good because:

Proposals to use road tolls in an effort to reduce traffic congestion are often rejected by the public because:

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week timeshare unit in the Blue Mountains of New South Wales. If lift lines at the ski resort become more congested when these 10 additional people start to ski, then:

Suppose fish stocks in a lake are being overfished by fishers. To reduce the overfishing problem the government could:

The Tragedy of the Commons occurs because:

The Tragedy of the Commons occurs with whales because:

The free-rider problem is a problem of:

If it is common knowledge that a given national park has become overused, why might raising the entrance fee to the park NOT solve the problem of overcrowding?

Countries that have completely outlawed domestic elephant hunting are finally seeing elephant populations start to rise.

Goods that are non-excludable and non-rival are:

The profit motive that stems from private ownership has proven to be detrimental to elephant populations.

Congested roads are a good example of a:

The Australian patent system:

Property rights are important to solving some of the problems of goods that the market does not provide adequately.

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

Application: 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 and Business Strategy

Competition Policy

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters