Exam 11: Public Goods and Common Resources.

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

Advocates of antipoverty programs believe that fighting poverty

Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

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.If the marginal cost of national defense is constant at $24 per unit,what is the efficient level of national defense to provide?

The U.S.government protects fish,a common resource,by

In the Tragedy of the Commons,joint action among the individual citizens would be necessary to solve their common resource problem unless the government intervenes.

Each of the following explains why cost-benefit analysis is difficult except

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

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 $33 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?"

The Tragedy of the Commons occurs because

Suppose that a small county is considering adding a guard rail to a dangerous curve by a river.The guard rail will cost $70,000.The average damage done to vehicles that slide off the road at the curve is $10,000.It is expected that the guard rail will prevent 5 vehicles from sliding off the road during its usable life.What should the county do?

An example of a private good would be

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.If the marginal cost of national defense is constant at $12 per unit,what is the efficient level of national defense to provide?

Depending on congestion,national parks can be either a common resource or a public good.

The free-rider problem

When Rick uses a common resource and diminishes other people's enjoyment of it,he creates

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 $340 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s)would be in favor of planting at least 1 tree?

Private companies will invest in medical research if

In some cases the government can make everyone better off by raising taxes to pay for certain goods that the market fails to provide.

Goods that are rival in consumption include both