Exam 17: Public Goods Common Resources

If policy makers provide only enough tradable permits to provide efficient use of a common resource, only those who _____ will use the resource.

Volunteer fire departments are good examples of the _____ provision of _____.

What is difficult about using cost-benefit analysis to estimate the level of a public good that will maximize social welfare?

A small public park in a large town with many other parks often has very few visitors because of its size. There is no fee to enter the park, but few people visit it, since other parks have more amenities. This park is _____ in consumption and _____.

Use the following to answer questions: -(Table: Marginal Benefit, Cost, and Consumer Surplus) The table Marginal Benefit, Cost, and Consumer Surplus shows six consumers' willingness to pay for one iTunes download. If the marginal social cost is constant at $0, then the efficient price is _____ and consumer surplus is _____.

When a good is nonrival in consumption, it means the marginal cost of any individual's consumption is zero.

Stephanie stops at a gas station to fill up the tank of her car. The unleaded gasoline in her tank is best described as a(n):

Use the following to answer questions: Figure: Demand and Marginal Revenue -(Figure: Demand and Marginal Revenue) The figure Demand and Marginal Revenue refers to a software upgrade. The producer incurred fixed costs of $10 million to produce the upgrade; the marginal cost of allowing consumers to download the upgrade is zero. What is the deadweight loss associated with the profit-maximizing price and quantity of the upgrade?

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

A public good is a good or service for which exclusion is _____ and which is _____ in consumption.

A market produces too much of a good when the price of the good is:

No individual is willing to pay to provide the efficient level of a public good, since the:

The best example of a good whose consumption is NOT excludable is:

If a good is subject to the free-rider problem and an inefficiently high level of consumption, the good must be a(n):

If the marginal social benefit received from a good is less than the marginal social cost of production:

Use the following to answer questions: Figure: Market Failure -(Figure: Market Failure) Look at the figure Market Failure. Suppose the supply curve represents the marginal cost of providing streetlights in a neighborhood that is composed of two people, Ann and Joe. The demand curve represents the marginal benefit that Ann receives from the streetlights. Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to AC. Providing G streetlights is _____ because the marginal social benefit is _____ the marginal cost.

Which of the following is a private good?

Nikos and Camila are working on a team project for a course. They will receive the same grade for the project. They have done a great job, but they have not kept track of their bibliography sources very well, although they both have all of the information. Camila knows that Nikos will eventually do the bibliography, since Nikos does not like to turn in incomplete work. As a result:

Whenever a species is threatened with extinction, it is likely that:

Imposing a Pigouvian tax on a good, establishing a system of tradable licenses, and assigning property rights are methods to alleviate the problems associated with: