Exam 17: Public Goods and Common Resources

The marginal social cost of a common resource is than an individual's marginal cost, and without government intervention the market will allow provision of of the Common resource than is socially optimal.

Clean water in a river is nonexcludable because:

When goods are rival in consumption and excludable, markets:

Suppose you live in a community that relies on clean drinking water from a nearby lake.Lately you have noticed that the quality of the water has suffered as pollution washed into the lake.An editorial in the local newspaper suggests that all residents donate money to clean up the lake.Why would this suggestion be unlikely to succeed?

Goods that are nonrival in consumption and nonexcludable are referred to as:

Which of the following is an example of an artificially scarce good?

An example of a public good is:

When Joe watched a television movie, his viewing was in consumption because other people able to view the movie at the same time Joe did.

If the marginal benefit received from a good is greater than the marginal social cost of production, then:

A public good is ________ and in consumption.

Which of the following goods best fits the characteristics of a private good?

Figure: An Individual's Marginal Benefit from a Public Good (Figure: An Individual's Marginal Benefit from a Public Good) Look at the figure An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good; each individual has the same marginal benefit curve as the one shown in the figure.If the marginal cost of the good is $8, what is the level of this public good that will maximize society's welfare?

(Table: Total Cost and Total Individual Benefit) The table Total Cost and Total Individual Benefit refers to animal control for residents of a small town.If there are 1,000 residents, what is the total social benefit of three animal control officers?

When the market does not result in an efficient allocation of scarce resources, economists say there has been _.

To ensure efficient use of a common resource, the government could assign property rights.False

The problem with public goods is similar to the problem with positive externalities: the marginal social benefit exceeds any individual's marginal benefit.False

For a common resource, the marginal benefit at the quantity provided by a private market is ________ the marginal social cost.