Question 1

Which of the following is rival and not excludable?

Accepted Answer

A) cable TV 
B) lobsters in the ocean 
C) national defense 
D) clothing 
A) cable TV 
B) lobsters in the ocean 
C) national defense 
D) clothing

Question 2

Though markets can provide goods which are excludable butnonrival, they do so at the price of:

Accepted Answer

A) efficiency. 
B) inefficiency. 
C) equity. 
D) inequity. 
A) efficiency. 
B) inefficiency. 
C) equity. 
D) inequity.

Question 3

Which of the following statements is FALSE?

Accepted Answer

A) The total benefit of a public good equals the sum of the benefits to each person. 
B) It is harder for society to produce optimal amounts of public goods than it is for private goods. 
C) The United States Postal Service is not a public good. 
D) People value public goods differently. 
A) The total benefit of a public good equals the sum of the benefits to each person. 
B) It is harder for society to produce optimal amounts of public goods than it is for private goods. 
C) The United States Postal Service is not a public good. 
D) People value public goods differently.

Question 4

The problem of free riders is most apparent for:

Accepted Answer

A) private goods. 
B) nonrival private goods. 
C) public goods. 
D) textbooks. 
A) private goods. 
B) nonrival private goods. 
C) public goods. 
D) textbooks.

Question 5

When a good is excludable:

Accepted Answer

A) one person's use of the good prevents another's ability to use it. 
B) everyone is excluded from using the good. 
C) people can be prevented from using the good. 
D) no more than one person can use the good at one time. 
A) one person's use of the good prevents another's ability to use it. 
B) everyone is excluded from using the good. 
C) people can be prevented from using the good. 
D) no more than one person can use the good at one time.

Question 6

Tragedy of the commons problems are harder to solve when:

Accepted Answer

A) people who have access to the common good cannot be identified. 
B) people who have access to the common good are closely related. 
C) a lot of unrelated people have access to the common good. 
D) only a few unrelated people have access to the common good. 
A) people who have access to the common good cannot be identified. 
B) people who have access to the common good are closely related. 
C) a lot of unrelated people have access to the common good. 
D) only a few unrelated people have access to the common good.

Question 7

The tragedy of the commons is the tendency for any goodwhich is:

Accepted Answer

A) rival and excludable to be underused and overmaintained. 
B) nonrival and nonexcludable to be underused and overmaintained. 
C) rival and nonexcludable to be overused and undermaintained. 
D) nonrival and excludable to be overused and undermaintained. 
A) rival and excludable to be underused and overmaintained. 
B) nonrival and nonexcludable to be underused and overmaintained. 
C) rival and nonexcludable to be overused and undermaintained. 
D) nonrival and excludable to be overused and undermaintained.

Question 8

Which of the following is the explanation for why wild animalsare often hunted to the point of extinction?

Accepted Answer

A) cost-benefit analysis 
B) public goods 
C) tragedy of the commons 
D) There is no known explanation. 
A) cost-benefit analysis 
B) public goods 
C) tragedy of the commons 
D) There is no known explanation.

Question 9

A free rider enjoys the benefits of a private good withoutpaying a share of the costs.

Accepted Answer

A) True 
 B)False

Question 10

New Zealand's individual transfer quotas:
I. work by limiting the amount of fish that each individualfisherman can fish
II.resulted in reduced fish catches after they were established
III. work just like the tradable pollution allowances in theUnited States.

Accepted Answer

A) I only 
B) I and III only 
C) III only 
D) I, II, and III 
A) I only 
B) I and III only 
C) III only 
D) I, II, and III

Question 11

The invisible hand guides the production of optimal quantitiesof public goods, just as it does for private goods.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following solutions allows for an efficientallocation of a public good?

Accepted Answer

A) widespread taxation 
B) government command and control policies 
C) donation-based funding 
D) advertising 
A) widespread taxation 
B) government command and control policies 
C) donation-based funding 
D) advertising

Question 13

A tornado warning siren is an example of a:

Accepted Answer

A) private good. 
B) public good. 
C) common resource. 
D) rival public good. 
A) private good. 
B) public good. 
C) common resource. 
D) rival public good.

Question 14

A good is nonexcludable if it is:

Accepted Answer

A) easy to prevent people from using the good at low cost. 
B) easy to make people use the good at low cost. 
C) difficult to prevent people from using the good at low cost. 
D) difficult to make people use the good at low cost. 
A) easy to prevent people from using the good at low cost. 
B) easy to make people use the good at low cost. 
C) difficult to prevent people from using the good at low cost. 
D) difficult to make people use the good at low cost.

Question 15

Which of the following statements is TRUE?
I. Excludability leads to efficiency
II.The benefits of public goods provide an argument forgovernment provision of these goods
III. Taxation turns some people into free riders.

Accepted Answer

A) I and II only 
B) II only 
C) II and III only 
D) I, II, and III 
A) I and II only 
B) II only 
C) II and III only 
D) I, II, and III

Question 16

Which of the following is NOT considered a private good?

Accepted Answer

A) pizza 
B) tennis rackets 
C) cable TV 
D) French fries 
A) pizza 
B) tennis rackets 
C) cable TV 
D) French fries

Question 17

People have little incentive to produce a public good because:

Accepted Answer

A) fixed costs are usually too high. 
B) production is impossible. 
C) of the free rider problem. 
D) social benefits are typically less than total costs. 
A) fixed costs are usually too high. 
B) production is impossible. 
C) of the free rider problem. 
D) social benefits are typically less than total costs.

Question 18

Which of the following is an example of the tragedy of thecommons?

Accepted Answer

A) Tuna in the ocean are being over harvested because it is difficult to prevent anyone from fishing for tuna.(True
Answer )Correct 
B) Personal computers have become a commonplace appliance in many homes, causing an expedited tragedy of
Technology. 
C) There is an increasing threat to wildlife due to habitat loss in national forests. 
D) Television's popularity has become a common tragedy in our society. 
A) Tuna in the ocean are being over harvested because it is difficult to prevent anyone from fishing for tuna.(True
Answer )Correct 
B) Personal computers have become a commonplace appliance in many homes, causing an expedited tragedy of
Technology. 
C) There is an increasing threat to wildlife due to habitat loss in national forests. 
D) Television's popularity has become a common tragedy in our society.

Question 19

For some public goods, such as Internet search engines, whichare nonrival but potentially excludable, it is more profitablefor the providers to:

Accepted Answer

A) exclude people who don't pay for its service. 
B) sell advertising and provide its services for free.(True Answer )Correct 
C) sell advertising and also charge people for using the services. 
D) offer the service to anyone for free. 
A) exclude people who don't pay for its service. 
B) sell advertising and provide its services for free.(True Answer )Correct 
C) sell advertising and also charge people for using the services. 
D) offer the service to anyone for free.

Question 20

Individual transferable quotas (ITQs) are like a ________,allowing ________.

Accepted Answer

A) subsidy; the internal benefit of fishing to be externalized 
B) corrective tax; fishermen a tax write-off for capital purchases 
C) pollution permit; fishermen the right to catch a limited number of fish 
D) cartel; fisherman to raise market prices by limiting competition 
A) subsidy; the internal benefit of fishing to be externalized 
B) corrective tax; fishermen a tax write-off for capital purchases 
C) pollution permit; fishermen the right to catch a limited number of fish 
D) cartel; fisherman to raise market prices by limiting competition

Exam 18: Public Economy

Which of the following is rival and not excludable?

Though markets can provide goods which are excludable butnonrival, they do so at the price of:

Which of the following statements is FALSE?

The problem of free riders is most apparent for:

When a good is excludable:

Tragedy of the commons problems are harder to solve when:

The tragedy of the commons is the tendency for any goodwhich is:

Which of the following is the explanation for why wild animalsare often hunted to the point of extinction?

A free rider enjoys the benefits of a private good withoutpaying a share of the costs.

New Zealand's individual transfer quotas: I. work by limiting the amount of fish that each individualfisherman can fish II.resulted in reduced fish catches after they were established III. work just like the tradable pollution allowances in theUnited States.

The invisible hand guides the production of optimal quantitiesof public goods, just as it does for private goods.

Which of the following solutions allows for an efficientallocation of a public good?

A tornado warning siren is an example of a:

A good is nonexcludable if it is:

Which of the following statements is TRUE? I. Excludability leads to efficiency II.The benefits of public goods provide an argument forgovernment provision of these goods III. Taxation turns some people into free riders.

Which of the following is NOT considered a private good?

People have little incentive to produce a public good because:

Which of the following is an example of the tragedy of thecommons?

For some public goods, such as Internet search engines, whichare nonrival but potentially excludable, it is more profitablefor the providers to:

Individual transferable quotas (ITQs) are like a ________,allowing ________.

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters

Individual transferable quotas (ITQs) are like a ,allowing .