Exam 11: Public Goods and Common Resources

The use of road tolls to reduce traffic can be desirable for which of the following reasons? (i) they charge people according to consumption (ii) they can help bring usage closer to its optimal level (iii) rates can differ according to the time of day (iv) the administrative costs are virtually non-existent

The Tragedy of the Commons will be evident when a growing number of crocodile hunters leads to the loss of crocodiles in many rivers: Possible solutions to this problem include:

Which of the following would be considered a common resource good?

The government subsidises basic research in mathematics, physics, economics and other fields in order to correct for private market failure.

Common resources get overused typically because:

Why does society tend to produce too little basic research? What can the government do about it?

If an entrepreneur provides a service that people enjoy without paying for but can be excluded from the service, these people are known as free riders.

When a common resource like grazing land, is plentiful and everyone can get all the good grazing land they want, a tragedy of the commons exists.

A lighthouse might be considered a private good if:

Historically speaking, when a city builds more roads, its traffic problems decrease.

The market does not provide national defence because:

The ocean remains one of the largest unregulated resources because:

The most effective ways to solve highway congestion is to:

Why is cost-benefit analysis such a difficult job? (i) there is no price with which to judge the value of a public good (ii) surveys are often biased and unreliable (iii) it is difficult to identify all factors that influence costs and benefits of public goods

When a good is characterised by non-excludability, it is theoretically possible for the government to:

Government needs only to point out which goods the private markets are failing to provide efficiently and then allow the private markets to correct themselves.

A poor way to value human life is to measure how much extra money a person needs to be paid to take on a risky job.

What effect would a tax on petrol have?

Sheep-grazing on a common land and wireless internet share a common problem.Explain what this is and what are its causes.

A free rider is someone who receives the benefit of a good and pays for it through taxes.