Question 1

You and your friends eat potato chips in your bedroom.For you and your friends,the potato chips are rival in consumption.

Accepted Answer

A) True 
 B)False

Question 2

The town of Isle is on a small island connected to Big City by a single bridge.Most of the residents of Isle work in Big City.As a result,the bridge becomes very congested for 2 hours each day at the typical morning and evening commute times.Which of the following policies considered by the mayor of Isle would likely be most effective in alleviating the congestion?

Accepted Answer

A)  A fixed toll for the bridge payable by every vehicle crossing the bridge at all days and times. 
B)  A variable toll for the bridge payable only by vehicles crossing the bridge during the congested commute times. 
C)  Any vehicle crossing the bridge at any time must have a sticker paid for with a one-time fee of $25. 
D)  A press conference in which the mayor requests that people try to cross the bridge earlier or later than the typical commute times. 
A)  A fixed toll for the bridge payable by every vehicle crossing the bridge at all days and times. 
B)  A variable toll for the bridge payable only by vehicles crossing the bridge during the congested commute times. 
C)  Any vehicle crossing the bridge at any time must have a sticker paid for with a one-time fee of $25. 
D)  A press conference in which the mayor requests that people try to cross the bridge earlier or later than the typical commute times.

Question 3

The ocean remains one of the largest unregulated resources for each of the following reasons except

Accepted Answer

A)  many countries have access to the ocean. 
B)  it is difficult to get international cooperation among countries that hold different values. 
C)  the oceans are so vast that enforcing any agreements would be difficult. 
D)  All of the above are reasons the ocean remains one of the largest unregulated resources. 
A)  many countries have access to the ocean. 
B)  it is difficult to get international cooperation among countries that hold different values. 
C)  the oceans are so vast that enforcing any agreements would be difficult. 
D)  All of the above are reasons the ocean remains one of the largest unregulated resources.

Question 4

Figure 11-1
  
-Refer to Figure 11-1.Which of the following items is not an example of the type of good represented by Box D?

Accepted Answer

A)  a mathematical theorem 
B)  an uncongested toll road 
C)  national defense 
D)  fighting poverty 
A)  a mathematical theorem 
B)  an uncongested toll road 
C)  national defense 
D)  fighting poverty

Question 5

The old lyric "the best things in life are free"

Accepted Answer

A)  is not true for any goods. 
B)  is even true for some goods that have a price. 
C)  refers to goods provided by nature or the government. 
D)  refers to goods provided by the market. 
A)  is not true for any goods. 
B)  is even true for some goods that have a price. 
C)  refers to goods provided by nature or the government. 
D)  refers to goods provided by the market.

Question 6

One economically efficient way to eliminate the Tragedy of the Commons is to

Accepted Answer

A)  tax the owners of the resource. 
B)  prevent anyone from using the resource. 
C)  reduce the marginal social benefit of the resource. 
D)  establish private ownership of the resource. 
A)  tax the owners of the resource. 
B)  prevent anyone from using the resource. 
C)  reduce the marginal social benefit of the resource. 
D)  establish private ownership of the resource.

Question 7

Goods that are not excludable are usually

Accepted Answer

A)  higher priced than excludable goods. 
B)  higher priced than rival goods. 
C)  in short supply. 
D)  free of charge. 
A)  higher priced than excludable goods. 
B)  higher priced than rival goods. 
C)  in short supply. 
D)  free of charge.

Question 8

Figure 11-1
  
-Refer to Figure 11-1.The box labeled C 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

You are the mayor of a town with 20,000 residents.The head of your economic development agency recently conducted a survey in which the 20,000 residents said that a small public library in the center of town would be worth $40 to each of them.The cost to build the library is $500,000.Which of the following is the most efficient option?

Accepted Answer

A)  The library should be built and paid for with donations collected from residents, as these donations should more than cover the cost of the library. 
B)  The library should be built and paid for by the town government and paid for with a tax on the residents because all residents would benefit from it but some residents would not donate if they were asked. 
C)  The library should be built and paid for by the wealthiest ten percent of the residents. 
D)  The library should not be built. 
A)  The library should be built and paid for with donations collected from residents, as these donations should more than cover the cost of the library. 
B)  The library should be built and paid for by the town government and paid for with a tax on the residents because all residents would benefit from it but some residents would not donate if they were asked. 
C)  The library should be built and paid for by the wealthiest ten percent of the residents. 
D)  The library should not be built.

Question 10

Which of the following is an example of the free-rider problem?

Accepted Answer

A)  Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care. 
B)  Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch. 
C)  Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking. 
D)  Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale. 
A)  Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care. 
B)  Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch. 
C)  Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking. 
D)  Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale.

Question 11

Under which of the following scenarios would a park be considered a club 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 12

Table 11-1
Consider the town of Anywhere with only three residents, Mary, Bill, and Tricia. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident's willingness to pay for each acre of the park.
  
-Refer to Table 11-1.Suppose the cost to build the park is $15 per acre and that the residents have agreed to split the cost of building the park equally.If the residents vote to determine the size of park to build,basing their decision solely on their own willingness to pay (and trying to maximize their own surplus),what is the largest park size for which the majority of residents would vote "yes?"

Accepted Answer

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

Question 13

Figure 11-1
  
-Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

Accepted Answer

A)  a pair of pants 
B)  a lighthouse 
C)  a bicycle 
D)  a cattle ranch 
A)  a pair of pants 
B)  a lighthouse 
C)  a bicycle 
D)  a cattle ranch

Question 14

A city street is

Accepted Answer

A)  always a public good, whether or not it is congested. 
B)  a public good when it is congested, but it is a common resource when it is not congested. 
C)  a common resource when it is congested, but it is a public good when it is not congested. 
D)  always a common resource, whether or not it is congested. 
A)  always a public good, whether or not it is congested. 
B)  a public good when it is congested, but it is a common resource when it is not congested. 
C)  a common resource when it is congested, but it is a public good when it is not congested. 
D)  always a common resource, whether or not it is congested.

Question 15

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Accepted Answer

A) True 
 B)False

Question 16

Elephant populations in some African countries have started to rise because

Accepted Answer

A)  poachers and environmentalists are working together to save the elephants. 
B)  new laws make killing elephants and selling their ivory illegal. 
C)  some elephants have been made a private good, and people are allowed to kill elephants on their own property. 
D)  high ivory taxes make it hard to earn a decent return on elephant tusks. 
A)  poachers and environmentalists are working together to save the elephants. 
B)  new laws make killing elephants and selling their ivory illegal. 
C)  some elephants have been made a private good, and people are allowed to kill elephants on their own property. 
D)  high ivory taxes make it hard to earn a decent return on elephant tusks.

Question 17

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $25,000.If the traffic light reduces the risk of fatality by 0.3 percent,and the value of a human life is estimated to be $10 million,you should

Accepted Answer

A)  install the light because the expected benefit of $30,000 is greater than the cost. 
B)  install the light because the expected benefit of $25,000 is greater than the cost. 
C)  not install the light because the expected benefit of $25,000 is only equal to the cost. 
D)  not install the light because the expected benefit of $3,000 is less than the cost. 
A)  install the light because the expected benefit of $30,000 is greater than the cost. 
B)  install the light because the expected benefit of $25,000 is greater than the cost. 
C)  not install the light because the expected benefit of $25,000 is only equal to the cost. 
D)  not install the light because the expected benefit of $3,000 is less than the cost.

Question 18

Even economists who advocate small government agree that national defense is a good that the government should provide.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000.The walkway is expected to reduce the risk of fatality by 1.5 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)  be indifferent between installing and not installing 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)  be indifferent between installing and not installing 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.

Question 20

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.How many streetlights should the town install to maximize total surplus from the streetlights?

Accepted Answer

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

You and your friends eat potato chips in your bedroom.For you and your friends,the potato chips are rival in consumption.

The ocean remains one of the largest unregulated resources for each of the following reasons except

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not an example of the type of good represented by Box D?

The old lyric "the best things in life are free"

One economically efficient way to eliminate the Tragedy of the Commons is to

Goods that are not excludable are usually

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

Which of the following is an example of the free-rider problem?

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

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

A city street is

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Elephant populations in some African countries have started to rise because

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $25,000.If the traffic light reduces the risk of fatality by 0.3 percent,and the value of a human life is estimated to be $10 million,you should

Even economists who advocate small government agree that national defense is a good that the government should provide.

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000.The walkway is expected to reduce the risk of fatality by 1.5 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.

Filters

Exam 11: Public Goods and Common Resources.

You and your friends eat potato chips in your bedroom.For you and your friends,the potato chips are rival in consumption.

The ocean remains one of the largest unregulated resources for each of the following reasons except

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not an example of the type of good represented by Box D?

The old lyric "the best things in life are free"

One economically efficient way to eliminate the Tragedy of the Commons is to

Goods that are not excludable are usually

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

Which of the following is an example of the free-rider problem?

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

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

A city street is

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Elephant populations in some African countries have started to rise because

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $25,000.If the traffic light reduces the risk of fatality by 0.3 percent,and the value of a human life is estimated to be $10 million,you should

Even economists who advocate small government agree that national defense is a good that the government should provide.

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000.The walkway is expected to reduce the risk of fatality by 1.5 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.

Filters