Question 1

Some goods can be classified as either public goods or private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is true of the tax on gasoline?

Accepted Answer

A)  The cost of collecting a gasoline tax outweighs the revenues raised by the tax. 
B)  It is preferred to tolls as the best solution to road congestion. 
C)  It discourages driving on noncongested roads, even though there is no congestion externality for these roads. 
D)  Both b and c are correct. 
A)  The cost of collecting a gasoline tax outweighs the revenues raised by the tax. 
B)  It is preferred to tolls as the best solution to road congestion. 
C)  It discourages driving on noncongested roads, even though there is no congestion externality for these roads. 
D)  Both b and c are correct.

Question 3

Which of the following statements is correct?

Accepted Answer

A)  The establishment of property rights sometimes gives rise to market failure. 
B)  The absence of property rights sometimes gives rise to market failure. 
C)  In the context of public goods, the Coase theorem implies that total surplus in some markets can be improved by the elimination of property rights. 
D)  Government regulation of private behavior, in response to market failure, can never improve social well-being. 
A)  The establishment of property rights sometimes gives rise to market failure. 
B)  The absence of property rights sometimes gives rise to market failure. 
C)  In the context of public goods, the Coase theorem implies that total surplus in some markets can be improved by the elimination of property rights. 
D)  Government regulation of private behavior, in response to market failure, can never improve social well-being.

Question 4

Which of the following statements is not correct?

Accepted Answer

A)  Environmental degradation is an example of the Tragedy of the Commons. 
B)  Cost-benefit analysis is an important tool that economists use to evaluate the benefits of providing a public good. 
C)  Some goods, such as lighthouses, may be either private or public goods. 
D)  The free-rider problem prevents governments from supplying public goods. 
A)  Environmental degradation is an example of the Tragedy of the Commons. 
B)  Cost-benefit analysis is an important tool that economists use to evaluate the benefits of providing a public good. 
C)  Some goods, such as lighthouses, may be either private or public goods. 
D)  The free-rider problem prevents governments from supplying public goods.

Question 5

Some goods can be either common resources or public goods depending on

Accepted Answer

A)  whether the good is rival in consumption. 
B)  whether the good is excludable. 
C)  the marginal cost of the good. 
D)  None of the above is correct. 
A)  whether the good is rival in consumption. 
B)  whether the good is excludable. 
C)  the marginal cost of the good. 
D)  None of the above is correct.

Question 6

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Accepted Answer

A) True 
 B)False

Question 7

On hot summer days,electricity-generating capacity is sometimes stretched to the limit.At these times,electric companies may ask people to voluntarily cut back on their use of electricity.On these days,electricity is

Accepted Answer

A)  excludable, but nonrival in consumption. 
B)  not excludable, but rival in consumption. 
C)  excludable and rival in consumption. 
D)  not excludable and nonrival in consumption. 
A)  excludable, but nonrival in consumption. 
B)  not excludable, but rival in consumption. 
C)  excludable and rival in consumption. 
D)  not excludable and nonrival in consumption.

Question 8

Figure 11-1
  
-Refer to Figure 11-1.The box labeled B represents

Accepted Answer

A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods. 
A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods.

Question 9

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Accepted Answer

A) True 
 B)False

Question 10

The idea that "externalities arise because something of value has no price attached to it" is associated with

Accepted Answer

A)  public goods, but not with common resources. 
B)  common resources, but not with public goods. 
C)  both public goods and common resources. 
D)  neither public goods nor common resources. 
A)  public goods, but not with common resources. 
B)  common resources, but not with public goods. 
C)  both public goods and common resources. 
D)  neither public goods nor common resources.

Question 11

Which of the following is not a way for the government to solve the problem of excessive use of common resources?

Accepted Answer

A)  regulation 
B)  taxes 
C)  turning the common resource into a public good 
D)  turning the common resource into a private good 
A)  regulation 
B)  taxes 
C)  turning the common resource into a public good 
D)  turning the common resource into a private good

Question 12

Table 11-5
A small strip mall contains four retail stores, and crime has recently been on the increase in the neighborhood of the strip mall. The owners of the four stores - Stores A, B, C, and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards. The table represents their willingness to pay, that is, the maximum amount that each store owner is willing to contribute, per day, to hire each security guard.
  
-Refer to Table 11-5.Suppose the cost to hire each individual guard is $75 per day.Then total surplus for the 4 store owners is

Accepted Answer

A)  $75 if 1 guard is hired. 
B)  $110 if 2 guards are hired. 
C)  $130 if 3 guards are hired. 
D)  $105 if 4 guards are hired. 
A)  $75 if 1 guard is hired. 
B)  $110 if 2 guards are hired. 
C)  $130 if 3 guards are hired. 
D)  $105 if 4 guards are hired.

Question 13

Although national defense is currently a public good,economists who advocate small government generally agree that the U.S.should privatize national defense to increase the efficiency of the good.

Accepted Answer

A) True 
 B)False

Question 14

Goods that are rival in consumption but not excludable would be considered

Accepted Answer

A)  club goods. 
B)  common resources. 
C)  public goods. 
D)  private goods. 
A)  club goods. 
B)  common resources. 
C)  public goods. 
D)  private goods.

Question 15

Suppose that everyone prefers to live in a society without poverty.Further suppose that some private charities are successful in reducing poverty.People who do not contribute to the charities

Accepted Answer

A)  receive no external benefit from private antipoverty programs. 
B)  decrease the reliance of individuals on antipoverty programs. 
C)  can free ride on the generosity of others. 
D)  are most likely to be in favor of government-sponsored programs. 
A)  receive no external benefit from private antipoverty programs. 
B)  decrease the reliance of individuals on antipoverty programs. 
C)  can free ride on the generosity of others. 
D)  are most likely to be in favor of government-sponsored programs.

Question 16

Which of the following goods is both excludable and rival in consumption?

Accepted Answer

A)  a wristwatch 
B)  fire protection in a small town 
C)  fish in the ocean 
D)  efforts to fight poverty 
A)  a wristwatch 
B)  fire protection in a small town 
C)  fish in the ocean 
D)  efforts to fight poverty

Question 17

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

Accepted Answer

Eliminating poverty is not a good that t

Question 18

When goods do not have a price,which of the following primarily ensures that the good is produced?

Accepted Answer

A)  buyers 
B)  sellers 
C)  government 
D)  the market 
A)  buyers 
B)  sellers 
C)  government 
D)  the market

Question 19

Table 11-5
A small strip mall contains four retail stores, and crime has recently been on the increase in the neighborhood of the strip mall. The owners of the four stores - Stores A, B, C, and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards. The table represents their willingness to pay, that is, the maximum amount that each store owner is willing to contribute, per day, to hire each security guard.
  
-Refer to Table 11-5.Suppose the cost to hire each individual guard is $70 per day.How many guards should be hired to maximize the total surplus of the four store owners?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 20

The greatest difficulty with cost-benefit analysis of a public project is determining

Accepted Answer

A)  whether government revenue is sufficient to cover the cost of the project. 
B)  which contractor should be awarded the project. 
C)  the cost of the project. 
D)  the value or benefit of the project. 
A)  whether government revenue is sufficient to cover the cost of the project. 
B)  which contractor should be awarded the project. 
C)  the cost of the project. 
D)  the value or benefit of the project.

Some goods can be classified as either public goods or private goods depending on the circumstances.

Which of the following statements is true of the tax on gasoline?

Which of the following statements is correct?

Which of the following statements is not correct?

Some goods can be either common resources or public goods depending on

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

On hot summer days,electricity-generating capacity is sometimes stretched to the limit.At these times,electric companies may ask people to voluntarily cut back on their use of electricity.On these days,electricity is

Figure 11-1 -Refer to Figure 11-1.The box labeled B represents

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

The idea that "externalities arise because something of value has no price attached to it" is associated with

Which of the following is not a way for the government to solve the problem of excessive use of common resources?

Although national defense is currently a public good,economists who advocate small government generally agree that the U.S.should privatize national defense to increase the efficiency of the good.

Goods that are rival in consumption but not excludable would be considered

Suppose that everyone prefers to live in a society without poverty.Further suppose that some private charities are successful in reducing poverty.People who do not contribute to the charities

Which of the following goods is both excludable and rival in consumption?

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

When goods do not have a price,which of the following primarily ensures that the good is produced?

The greatest difficulty with cost-benefit analysis of a public project is determining

Ten Principles of Economics.

Thinking Like an Economist.

Interdependence and the Gains from Trade.

The Market Forces of Supply and Demand.

Elasticity and Its Application

Supply, Demand, And Government Policies.

Consumers, Producers, and the Efficiency of Markets.

Application: The Costs of Taxation.

Application: International Trade.

Externalities.

The Design of the Tax System.

The Costs of Production.

Firms in Competitive Markets.

Monopoly.

Monopolistic Competition.

Oligopoly.

The Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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Exam 11: Public Goods and Common Resources.

Some goods can be classified as either public goods or private goods depending on the circumstances.

Which of the following statements is true of the tax on gasoline?

Which of the following statements is correct?

Which of the following statements is not correct?

Some goods can be either common resources or public goods depending on

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

On hot summer days,electricity-generating capacity is sometimes stretched to the limit.At these times,electric companies may ask people to voluntarily cut back on their use of electricity.On these days,electricity is

Figure 11-1 -Refer to Figure 11-1.The box labeled B represents

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

The idea that "externalities arise because something of value has no price attached to it" is associated with

Which of the following is not a way for the government to solve the problem of excessive use of common resources?

Although national defense is currently a public good,economists who advocate small government generally agree that the U.S.should privatize national defense to increase the efficiency of the good.

Goods that are rival in consumption but not excludable would be considered

Suppose that everyone prefers to live in a society without poverty.Further suppose that some private charities are successful in reducing poverty.People who do not contribute to the charities

Which of the following goods is both excludable and rival in consumption?

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

When goods do not have a price,which of the following primarily ensures that the good is produced?

The greatest difficulty with cost-benefit analysis of a public project is determining

Ten Principles of Economics.

Thinking Like an Economist.

Interdependence and the Gains from Trade.

The Market Forces of Supply and Demand.

Elasticity and Its Application

Supply, Demand, And Government Policies.

Consumers, Producers, and the Efficiency of Markets.

Application: The Costs of Taxation.

Application: International Trade.

Externalities.

The Design of the Tax System.

The Costs of Production.

Firms in Competitive Markets.

Monopoly.

Monopolistic Competition.

Oligopoly.

The Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters