Question 1

Which of the following is an approach used by economists to calculate the value of a human life?

Accepted Answer

A)  comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights 
B)  comparing the wages of more risky occupations to less risky occupations 
C)  comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features 
D)  All of the above are correct. 
A)  comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights 
B)  comparing the wages of more risky occupations to less risky occupations 
C)  comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features 
D)  All of the above are correct.

Question 2

The provision of public goods gives rise to

Accepted Answer

A)  positive externalities, as does the use of common resources. 
B)  positive externalities, whereas the use of common resources gives rise to negative externalities. 
C)  negative externalities, whereas the use of common resources gives rise to positive externalities. 
D)  negative externalities, as does the use of common resources. 
A)  positive externalities, as does the use of common resources. 
B)  positive externalities, whereas the use of common resources gives rise to negative externalities. 
C)  negative externalities, whereas the use of common resources gives rise to positive externalities. 
D)  negative externalities, as does the use of common resources.

Question 3

An overcrowded beach is an example of

Accepted Answer

A)  a positive externality. 
B)  a Tragedy of the Commons. 
C)  an environmentally inefficient allocation of resources. 
D)  an economically unfair allocation of resources. 
A)  a positive externality. 
B)  a Tragedy of the Commons. 
C)  an environmentally inefficient allocation of resources. 
D)  an economically unfair allocation of resources.

Question 4

To achieve the optimal provision of public goods,the

Accepted Answer

A)  market should be allowed to arrive at an equilibrium without government intervention. 
B)  government must limit the provision of the goods. 
C)  government must tax producers of the goods. 
D)  government must either provide the goods or subsidize their production. 
A)  market should be allowed to arrive at an equilibrium without government intervention. 
B)  government must limit the provision of the goods. 
C)  government must tax producers of the goods. 
D)  government must either provide the goods or subsidize their production.

Question 5

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?

Accepted Answer

A)  reduced carbon monoxide pollution 
B)  increased use of public transportation 
C)  improved taxi service 
D)  shorter travel time 
A)  reduced carbon monoxide pollution 
B)  increased use of public transportation 
C)  improved taxi service 
D)  shorter travel time

Question 6

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Accepted Answer

A)  are forced to pursue any project in which a single human life is saved. 
B)  are likely to make decisions that optimally allocate society's scarce resources. 
C)  would not pursue any public project that would not save human life. 
D)  would be forced to rely on private markets to provide public goods. 
A)  are forced to pursue any project in which a single human life is saved. 
B)  are likely to make decisions that optimally allocate society's scarce resources. 
C)  would not pursue any public project that would not save human life. 
D)  would be forced to rely on private markets to provide public goods.

Question 7

Table 11-3
This table describes the defense demands for three equal sized groups of people in Nirvanaville. The second, third, and fourth column shows the quantity that a group will demand for a given price (the first column).
  
-Refer to Table 11-3.What is the value of the 33ʳᵈ unit of national defense in Nirvanaville?

Accepted Answer

A)  $0 
B)  $2 
C)  $4 
D)  $6 
A)  $0 
B)  $2 
C)  $4 
D)  $6

Question 8

Highway engineers want to improve a dangerous stretch of highway.They expect that it will reduce the risk of someone dying in an accident from 4.1 percent to 1.5 percent over the life of the highway.If a human life is worth $4.2 million,then the project is worth doing as long as it does not cost more than

Accepted Answer

A)  $67,200. 
B)  $109,200. 
C)  $274,500. 
D)  $1.6 million. 
A)  $67,200. 
B)  $109,200. 
C)  $274,500. 
D)  $1.6 million.

Question 9

Under which of the following scenarios would a park be considered a public good?

Accepted Answer

A)  Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. 
B)  Vistors to the park must pay an admittance fee and frequently all of the picnic tables are in use. 
C)  Visitors can enter the park free of charge and there are always plenty of empty picnic tables. 
D)  Visitors can enter the park free of charge, but frequently all of the picnic tables are in use. 
A)  Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. 
B)  Vistors to the park must pay an admittance fee and frequently all of the picnic tables are in use. 
C)  Visitors can enter the park free of charge and there are always plenty of empty picnic tables. 
D)  Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

Question 10

Producers have little incentive to produce a public good because

Accepted Answer

A)  the social benefit is less than the private benefit. 
B)  the social benefit is less than the social cost. 
C)  there is a free-rider problem. 
D)  there is a Tragedy of the Commons. 
A)  the social benefit is less than the private benefit. 
B)  the social benefit is less than the social cost. 
C)  there is a free-rider problem. 
D)  there is a Tragedy of the Commons.

Question 11

Which of the following is not an advantage of road tolls as a way to reduce traffic?

Accepted Answer

A)  They charge people based on consumption. 
B)  They can help bring usage closer to its optimal level. 
C)  Rates can differ according to the time of day. 
D)  The administrative costs of collecting the tolls are almost zero, especially for local roads. 
A)  They charge people based on consumption. 
B)  They can help bring usage closer to its optimal level. 
C)  Rates can differ according to the time of day. 
D)  The administrative costs of collecting the tolls are almost zero, especially for local roads.

Question 12

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Accepted Answer

A) True 
 B)False

Question 13

Cost-benefit analysis is important to determine the role of government in our economy because

Accepted Answer

A)  the government should provide all goods for which the benefits exceed the costs. 
B)  cost-benefit analysis identifies the possible gains to society from government provision of a particular good. 
C)  markets for private goods cannot effectively assign costs and benefits. 
D)  cost-benefit analysis is the best tool to identify market failures. 
A)  the government should provide all goods for which the benefits exceed the costs. 
B)  cost-benefit analysis identifies the possible gains to society from government provision of a particular good. 
C)  markets for private goods cannot effectively assign costs and benefits. 
D)  cost-benefit analysis is the best tool to identify market failures.

Question 14

If the use of a common resource is not regulated,

Accepted Answer

A)  no one can enjoy it. 
B)  it will tend to be underused. 
C)  property rights will be clearly defined. 
D)  it will be overused. 
A)  no one can enjoy it. 
B)  it will tend to be underused. 
C)  property rights will be clearly defined. 
D)  it will be overused.

Question 15

Governments can grant private property rights over resources that were previously viewed as public,such as fish or elephants.Why would governments want to do so?

Accepted Answer

A)  to prevent overuse 
B)  to decrease taxes 
C)  to fight poverty 
D)  to increase consumption 
A)  to prevent overuse 
B)  to decrease taxes 
C)  to fight poverty 
D)  to increase consumption

Question 16

A toll on a congested road is in essence

Accepted Answer

A)  an interstate highway tax. 
B)  a Department of Motor Vehicles tax. 
C)  a gasoline tax. 
D)  a corrective tax. 
A)  an interstate highway tax. 
B)  a Department of Motor Vehicles tax. 
C)  a gasoline tax. 
D)  a corrective tax.

Question 17

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Accepted Answer

A)  drive at times other than rush hour. 
B)  use public transit rather than driving. 
C)  drive more fuel-efficient cars. 
D)  car-pool. 
A)  drive at times other than rush hour. 
B)  use public transit rather than driving. 
C)  drive more fuel-efficient cars. 
D)  car-pool.

Question 18

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

Accepted Answer

A)  regulating the use or consumption of the common resource. 
B)  taxing the use or consumption of the common resource. 
C)  selling the common resource to a private entity. 
D)  asking individuals to voluntarily reduce their use of the resource. 
A)  regulating the use or consumption of the common resource. 
B)  taxing the use or consumption of the common resource. 
C)  selling the common resource to a private entity. 
D)  asking individuals to voluntarily reduce their use of the resource.

Question 19

Before considering any public project,the government should
(i)compare the total cost and total benefits of the project.
(ii)conduct a cost-benefit analysis.
(iii)infer that citizens who vote for a project are willing to pay equally for it.

Accepted Answer

A)  (i) only 
B)  (ii) only 
C)  (i) and (ii) only 
D)  (i), (ii), and (iii) 
A)  (i) only 
B)  (ii) only 
C)  (i) and (ii) only 
D)  (i), (ii), and (iii)

Question 20

If people can be prevented from using a certain good,then that good is called

Accepted Answer

A)  rival in consumption. 
B)  excludable. 
C)  a common resource. 
D)  a public good. 
A)  rival in consumption. 
B)  excludable. 
C)  a common resource. 
D)  a public good.

Which of the following is an approach used by economists to calculate the value of a human life?

The provision of public goods gives rise to

An overcrowded beach is an example of

To achieve the optimal provision of public goods,the

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Under which of the following scenarios would a park be considered a public good?

Producers have little incentive to produce a public good because

Which of the following is not an advantage of road tolls as a way to reduce traffic?

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Cost-benefit analysis is important to determine the role of government in our economy because

If the use of a common resource is not regulated,

Governments can grant private property rights over resources that were previously viewed as public,such as fish or elephants.Why would governments want to do so?

A toll on a congested road is in essence

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

Before considering any public project,the government should (i)compare the total cost and total benefits of the project. (ii)conduct a cost-benefit analysis. (iii)infer that citizens who vote for a project are willing to pay equally for it.

If people can be prevented from using a certain good,then that good is called

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

Exam 11: Public Goods and Common Resources.

Which of the following is an approach used by economists to calculate the value of a human life?

The provision of public goods gives rise to

An overcrowded beach is an example of

To achieve the optimal provision of public goods,the

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Under which of the following scenarios would a park be considered a public good?

Producers have little incentive to produce a public good because

Which of the following is not an advantage of road tolls as a way to reduce traffic?

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Cost-benefit analysis is important to determine the role of government in our economy because

If the use of a common resource is not regulated,

Governments can grant private property rights over resources that were previously viewed as public,such as fish or elephants.Why would governments want to do so?

A toll on a congested road is in essence

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

Before considering any public project,the government should (i)compare the total cost and total benefits of the project. (ii)conduct a cost-benefit analysis. (iii)infer that citizens who vote for a project are willing to pay equally for it.

If people can be prevented from using a certain good,then that good is called

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