Exam 17: Public Goods and Common Resources

A software program is similar to an apple in that it is , but it is also similar to public safety in that it is _.

Wenqin lives in a city that has a huge public rose garden.Residents can stroll through the rose garden, enjoy the scenic vistas, or have a picnic, all without paying a fee.The public rose garden is a good that is best described as:

The efficient price for a good that is nonrival in consumption is necessarily greater than zero.True

Which of the following goods is most likely a common resource?

Economic policy is an example of a good that is:

A public good is one that is generally available for consumption by the public; that is, a person does not have to be a member of a special group or a club to be able to consume it.A good example would be milk for sale in a grocery store that is open to the public.True

(Table: Ultimate Fighting Marginal Benefit) Ultimate fighting, or mixed martial arts, is a rapidly growing spectator sport, and most bouts are available on a pay-per-view basis from local cable companies.The marginal cost of making the bout available to one additional consumer is zero.The table Ultimate Fighting Marginal Benefit refers to a viewing of the upcoming championship bout.a) If all five fans could view the fight without paying, how many would do so, and what would be the total consumer surplus to those consumers? b) If the cable company charges $20 to view the championship bout, which consumers will pay to view it? What is the total consumer surplus for those fans? What is the total producer surplus for the cable company? How large is the deadweight loss from this pricing strategy?

The fish in the local river are considered a common resource, but the city's public sanitation work that keeps the river clean enough for people to fish in is considered a public good.How are they similar and what makes them different?

Most neighborhood streets are illuminated at night by streetlights.The streetlights are ________ and ________.Therefore, they are likely to be by the competitive Market.

Figure: Model of a Market for a Common Resource (Figure: Model of a Market for a Common Resource) The figure Model of a Market for a Common Resource shows the intersection of the private supply and demand curves.Without any consideration of the marginal social cost of using a common resource, the quantity of the common resource used at Q will be:

A(n) is nonexcludable and nonrival in consumption.

The best example of a private good is:

Figure: Market Failure (Figure: Market Failure) Look at the figure Market Failure.Suppose it represents the demand and marginal cost of pounds of shrimp in the bay.The additional cost of the shrimp due to the depletion of the common resource is equal to AC.The output of F is because ________.

Figure: Market Failure (Figure: Market Failure) Look at the figure Market Failure.Suppose the supply curve represents the marginal cost of providing street lights in a neighborhood that is composed of two people, Ann and Joe.The demand curve represents the marginal benefit that Ann receives from the street lights.Suppose that Joe's marginal benefit from the street lights is a constant amount equal to AC.The marginal social benefit of F street lights is

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

A movie DVD is a private good, but a pay-per-view movie from your cable company is considered an artificially scarce good.How are they similar, and what makes them different?

Colleges and universities solicit their alumni for donations that go toward the operation and advancement of the college.How does this present a potential free-rider problem? How can colleges and universities attempt to lessen the free-rider problem and increase alumni contributions?

National defense and clean air are similar in that both are , but they differ in that national defense is while clean air is not.

When a good is nonexcludable:

Figure: Traffic Lights in Plymouth (Figure: Traffic Lights in Plymouth) Plymouth has 1,000 residents.The figure Traffic Lights in Plymouth shows the marginal social benefit and marginal cost of traffic lights in town.We know that each of the residents has the same individual marginal benefit per traffic light.Without government intervention, the town will have traffic lights.