Question 1

The value and cost of goods are easiest to determine when the goods are

Accepted Answer

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

Question 2

A vacation home in Malibu is

Accepted Answer

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

Question 3

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

Accepted Answer

A)  Both the American drivers and the Soviet shoppers are consuming products at prices that do not represent the full costs of the products. 
B)  Both the American drivers and the Soviet shoppers can purchase as much as they want at the market price. 
C)  Both the American drivers and the Soviet shoppers could avoid waiting if the prices were lowered. 
D)  American drivers and Soviet shoppers have nothing in common. 
A)  Both the American drivers and the Soviet shoppers are consuming products at prices that do not represent the full costs of the products. 
B)  Both the American drivers and the Soviet shoppers can purchase as much as they want at the market price. 
C)  Both the American drivers and the Soviet shoppers could avoid waiting if the prices were lowered. 
D)  American drivers and Soviet shoppers have nothing in common.

Question 4

When a good is rival in consumption,

Accepted Answer

A)  one person's use of the good diminishes another person's ability to use it. 
B)  people can be prevented from using the good. 
C)  an unlimited number of people can use the good at the same time. 
D)  everyone will be excluded from obtaining the good. 
A)  one person's use of the good diminishes another person's ability to use it. 
B)  people can be prevented from using the good. 
C)  an unlimited number of people can use the good at the same time. 
D)  everyone will be excluded from obtaining the good.

Question 5

Table 11-4
There are four homes along Belmont Circle, which surrounds a small plot of land. The land currently has no trees, and the 4 homeowners -- Adams, Benitez, Chen, and Davis -- are considering the idea of contributing to a pool of money that will be used to plant up to 4 trees. The table represents their willingness to pay, that is, the maximum amount that each homeowner is willing to contribute toward each tree.
  
-Refer to Table 11-4.Suppose the cost to plant each tree is $380 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s)would be opposed to planting any trees?

Accepted Answer

A)  only Davis 
B)  only Adams and Davis 
C)  only Adams, Benitez, and Davis 
D)  Adams, Benitez, Chen, and Davis 
A)  only Davis 
B)  only Adams and Davis 
C)  only Adams, Benitez, and Davis 
D)  Adams, Benitez, Chen, and Davis

Question 6

The idea of requiring motorists to pay to use the busiest streets in a city

Accepted Answer

A)  has been proposed by many public officials, but to date the idea never has been tried in a major city anywhere in the world. 
B)  was tried in New York City in the 1990s, but the result was more - not less - congestion on busy streets, and the experiment was short-lived. 
C)  reflects the fact that a congested road is a public good. 
D)  reflects the fact that a congested road is a common resource. 
A)  has been proposed by many public officials, but to date the idea never has been tried in a major city anywhere in the world. 
B)  was tried in New York City in the 1990s, but the result was more - not less - congestion on busy streets, and the experiment was short-lived. 
C)  reflects the fact that a congested road is a public good. 
D)  reflects the fact that a congested road is a common resource.

Question 7

Mitch hunts deer.His shotgun is

Accepted Answer

A)  a private good and the deer he hunts are common resources. 
B)  a private good and the deer he hunts are public goods. 
C)  rival in consumption and the deer he hunts are not rival in consumption. 
D)  not rival in consumption and the deer he hunts are not rival in consumption. 
A)  a private good and the deer he hunts are common resources. 
B)  a private good and the deer he hunts are public goods. 
C)  rival in consumption and the deer he hunts are not rival in consumption. 
D)  not rival in consumption and the deer he hunts are not rival in consumption.

Question 8

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Accepted Answer

A)  prohibit parking in the vicinity of the park. 
B)  charge higher prices for parking at busy times. 
C)  police the parking area and ticket cars that are parked illegally. 
D)  do nothing. 
A)  prohibit parking in the vicinity of the park. 
B)  charge higher prices for parking at busy times. 
C)  police the parking area and ticket cars that are parked illegally. 
D)  do nothing.

Question 9

The difference between specific knowledge and general knowledge is that

Accepted Answer

A)  the creation of general knowledge is usually more profitable for the creator. 
B)  specific knowledge is excludable, while general knowledge is not excludable. 
C)  general knowledge is excludable, while specific knowledge is not excludable. 
D)  general knowledge is rival in consumption, while specific knowledge is not rival in consumption. 
A)  the creation of general knowledge is usually more profitable for the creator. 
B)  specific knowledge is excludable, while general knowledge is not excludable. 
C)  general knowledge is excludable, while specific knowledge is not excludable. 
D)  general knowledge is rival in consumption, while specific knowledge is not rival in consumption.

Question 10

The Great Lakes are

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 11

In deciding whether a good is a public good,one must determine the

Accepted Answer

A)  incomes of those who benefit from the good. 
B)  value of the external benefits that accrue to resource owners. 
C)  excludability of the good. 
D)  All of the above are correct. 
A)  incomes of those who benefit from the good. 
B)  value of the external benefits that accrue to resource owners. 
C)  excludability of the good. 
D)  All of the above are correct.

Question 12

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Accepted Answer

A)  taxing the use of the common resource 
B)  turning the common resource into a club good 
C)  turning the common resource into a private good 
D)  regulating the use of the common resource 
A)  taxing the use of the common resource 
B)  turning the common resource into a club good 
C)  turning the common resource into a private good 
D)  regulating the use of the common resource

Question 13

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource.To correct for this problem,the town could

Accepted Answer

A)  allow individual shepherds to chose their own flock sizes. 
B)  internalize the externality by subsidizing the production of sheep's wool. 
C)  auction off a limited number of sheep-grazing permits. 
D)  wait until the market corrects the problem. 
A)  allow individual shepherds to chose their own flock sizes. 
B)  internalize the externality by subsidizing the production of sheep's wool. 
C)  auction off a limited number of sheep-grazing permits. 
D)  wait until the market corrects the problem.

Question 14

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Accepted Answer

A)  those who stand to gain have an incentive to tell the truth. 
B)  those who stand to lose have an incentive to exaggerate their true costs. 
C)  answers to the survey questions will always be downwardly biased. 
D)  not everyone asked will be using the highway. 
A)  those who stand to gain have an incentive to tell the truth. 
B)  those who stand to lose have an incentive to exaggerate their true costs. 
C)  answers to the survey questions will always be downwardly biased. 
D)  not everyone asked will be using the highway.

Question 15

Which of the following is a disadvantage of government provision of a public good?

Accepted Answer

A)  The government lacks information about what people are willing to pay for the good. 
B)  The government does not provide enough of any public good. 
C)  The private sector can provide all public goods at a lower cost. 
D)  None of the above is a disadvantage. 
A)  The government lacks information about what people are willing to pay for the good. 
B)  The government does not provide enough of any public good. 
C)  The private sector can provide all public goods at a lower cost. 
D)  None of the above is a disadvantage.

Question 16

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Accepted Answer

The government assigns and protects the

Question 17

Labor is a

Accepted Answer

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

Question 18

Table 11-2
Consider a small town with only three families, the Johnson family, the Marshall family, and the Walker family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight.
  
-Refer to Table 11-2.Suppose the cost to install each streetlight is $180 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Johnson's like the town to install?

Accepted Answer

A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights 
A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights

Question 19

Figure 11-1
  
-Refer to Figure 11-1.A tornado siren in a small town is an example of the type of good represented by Box

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 20

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

Accepted Answer

A)  install the walkway because the estimated benefit is twice the cost. 
B)  install the walkway because the estimated benefit equals the cost. 
C)  not install the walkway, since the cost is twice the estimated benefit. 
D)  install the walkway, since the cost of even a single life is too great not to take action. 
A)  install the walkway because the estimated benefit is twice the cost. 
B)  install the walkway because the estimated benefit equals the cost. 
C)  not install the walkway, since the cost is twice the estimated benefit. 
D)  install the walkway, since the cost of even a single life is too great not to take action.

The value and cost of goods are easiest to determine when the goods are

A vacation home in Malibu is

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

When a good is rival in consumption,

The idea of requiring motorists to pay to use the busiest streets in a city

Mitch hunts deer.His shotgun is

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

The difference between specific knowledge and general knowledge is that

The Great Lakes are

In deciding whether a good is a public good,one must determine the

Which of the following is not a typical solution to the "Tragedy of the Commons?"

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource.To correct for this problem,the town could

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Which of the following is a disadvantage of government provision of a public good?

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Labor is a

Figure 11-1 -Refer to Figure 11-1.A tornado siren in a small town is an example of the type of good represented by Box

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

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.

The value and cost of goods are easiest to determine when the goods are

A vacation home in Malibu is

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

When a good is rival in consumption,

The idea of requiring motorists to pay to use the busiest streets in a city

Mitch hunts deer.His shotgun is

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

The difference between specific knowledge and general knowledge is that

The Great Lakes are

In deciding whether a good is a public good,one must determine the

Which of the following is not a typical solution to the "Tragedy of the Commons?"

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource.To correct for this problem,the town could

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Which of the following is a disadvantage of government provision of a public good?

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Labor is a

Figure 11-1 -Refer to Figure 11-1.A tornado siren in a small town is an example of the type of good represented by Box

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

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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