Question 1

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

Accepted Answer

A) True 
 B)False

Question 2

The Occupational Safety and Health Administration (OSHA)has determined that 100 workers are exposed to a hazardous chemical used in the production of diet soft drinks.The cost of imposing a regulation that would ban the chemical is $10 million.OSHA has calculated that each person saved by this regulation has a value equal to $10 million.If the benefits are exactly equal to the costs,what probability is OSHA using to assess the likelihood of a fatality from exposure to this chemical?

Accepted Answer

A)  0.001 
B)  0.01 
C)  0.1 
D)  1.0 
A)  0.001 
B)  0.01 
C)  0.1 
D)  1.0

Question 3

The provision of a public good generates a

Accepted Answer

A)  positive externality, as does the use of a common resource. 
B)  positive externality and the use of a common resource generates a negative externality. 
C)  negative externality, as does the use of a common resource. 
D)  negative externality and the use of a common resource generates a positive externality. 
A)  positive externality, as does the use of a common resource. 
B)  positive externality and the use of a common resource generates a negative externality. 
C)  negative externality, as does the use of a common resource. 
D)  negative externality and the use of a common resource generates a positive externality.

Question 4

Figure 11-1
  
-Refer to Figure 11-1.Cable TV 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 5

Nontoll roads can be either public goods or common resources,depending upon the degree of congestion.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following quotations illustrates the Tragedy of the Commons?

Accepted Answer

A)  "A bird in the hand is worth two in the bush." 
B)  "The only difference between the rich and other people is that the rich have more money." 
C)  "What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." 
D)  "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head." 
A)  "A bird in the hand is worth two in the bush." 
B)  "The only difference between the rich and other people is that the rich have more money." 
C)  "What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." 
D)  "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head."

Question 7

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States.Any farmer with land above the aquifer can at present pump water out of it.We might expect that

Accepted Answer

A)  over time, the aquifer is likely to be overused. 
B)  each farmer has a sufficient incentive to conserve the water. 
C)  state governments have an incentive to insure that their farmers do not overuse the water. 
D)  resources would be used more efficiently if the government paid for the pumps farmers use to get the water. 
A)  over time, the aquifer is likely to be overused. 
B)  each farmer has a sufficient incentive to conserve the water. 
C)  state governments have an incentive to insure that their farmers do not overuse the water. 
D)  resources would be used more efficiently if the government paid for the pumps farmers use to get the water.

Question 8

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

Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket.Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers.Which of the following statements is not correct?

Accepted Answer

A)  Use of the beach by the nine new beachgoers will yield a negative externality. 
B)  The town can reduce the congestion externality by raising the fee to access the beach. 
C)  An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion. 
D)  Each of the nine friends would have been better off staying at home. 
A)  Use of the beach by the nine new beachgoers will yield a negative externality. 
B)  The town can reduce the congestion externality by raising the fee to access the beach. 
C)  An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion. 
D)  Each of the nine friends would have been better off staying at home.

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

The provision of a public good generates a

Figure 11-1 -Refer to Figure 11-1.Cable TV is an example of the type of good represented by Box

Nontoll roads can be either public goods or common resources,depending upon the degree of congestion.

Which of the following quotations illustrates the Tragedy of the Commons?

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States.Any farmer with land above the aquifer can at present pump water out of it.We might expect that

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

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.

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

The provision of a public good generates a

Figure 11-1 -Refer to Figure 11-1.Cable TV is an example of the type of good represented by Box

Nontoll roads can be either public goods or common resources,depending upon the degree of congestion.

Which of the following quotations illustrates the Tragedy of the Commons?

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States.Any farmer with land above the aquifer can at present pump water out of it.We might expect that

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

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