Exam 17: Public Goods Common Resources

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 _____, then _____ consumers will purchase this good and consumer surplus is _____.

Use the following to answer questions: -(Table: Total Cost and Total Individual Benefit) Look at the table Total Cost and Total Individual Benefit. If there are 1,000 residents and they all have the same total individual benefit, as shown in the table, what is the marginal social benefit of the fourth animal control officer?

Economic policy is _____ in consumption and _____.

Although most citizens have access to police protection, they also take measures, such as putting locks on their doors, to protect themselves. For most citizens police protection is a(n) _____ good, while self-protection is a(n) _____ good.

For a nonexcludable good like national defense, the private market will lead to _____ of the good.

When the allocation of resources is such that a different allocation would increase society's welfare, economists say:

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

In London, any motorist entering a particular area in the city center during certain specified times must pay a congestion fee equal to £8, with fines for noncompliance rising to as high as £120. The congestion fee is:

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

Common resources tend to be _____ in private markets.

A very large museum could accommodate many more visitors than it does without reducing the enjoyment of the visitors if it did not charge such a high price for admission. Visits to the museum are a(n):

Pay-per-view movies are an example of a common resource.

Which of the following is an example of a nonexcludable good?

Use the following to answer questions: 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 marginal benefit curve shown in the figure. If the marginal cost of the good is $8, how many units of this public good will maximize society's welfare?

Josh has an iPhone, and he frequently downloads songs from the iTunes website. He pays a small fee for each download, but downloading a song does not remove it from the iTunes inventory. Other consumers can also pay the fee and download a song that Josh might have already accessed. The iTunes service is best described as(n):

Use the following to answer questions: -(Table: Total Cost and Total Individual Benefit) Look at the table Total Cost and Total Individual Benefit. If an individual resident were to decide about hiring and paying for animal control officers on his or her own, how many officers would that resident hire?

_____ are a good that is rival in consumption and nonexcludable.

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

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?

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. How much is Ann willing to pay for E streetlights?