Exam 11: Public Goods and Common Resources.

Figure 11-1 -Refer to Figure 11-1.The more Jane uses good x,the less of that good there is for other people to use.Neither Jane nor anyone else can be prevented from using the good.Good x is an example of the type of good that belongs in

When property rights are not well established,

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.To maximize his own surplus,how many acres would Bill like Anywhere to build?

Variable tolls on roads

Which of the following is most likely to face extinction?

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

A good that is excludable is one that someone can be prevented from using if she did not pay for it.

It would always be a mistake to view

Neither public goods nor common resources are

Suppose a human life is worth $10 million.Installing a better lighting system in the city park would reduce the risk of someone being murdered there from 2.3 to 1.8 percent over the life of the system.The city should install the new lighting system if its cost does not exceed

The degradation of the environment from litter is a

The Mansfield Public Library has a large number of books that anyone with a library card may borrow.Anyone can obtain a card for free.Because the number of copies of each book is limited,not everyone can have the same book at the same time.What type of good would the library books be classified as in this case?

Four roommates share an off-campus house and equally share the cost of rent.Everyone says that she values a clean house,yet the house is usually dirty.To an economist,a clean house in this case represents

Which of the following is a disadvantage of government provision of a public good such as national defense? (i)The government does not know the exact willingness of consumers to pay for the public good. (ii)The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good. (iii)Taxpayers do not agree on the optimal quantity of the public good that the government should provide.

An FM radio signal is an example of a good that is

The privately-owned school system in Smalltown has a virtually unlimited capacity.It accepts all applicants and operates on both tuition and private donations.Although every resident places value on having an educated community,the school's revenues have suffered lately due to a large decline in private donations from the elderly population.Since the benefit that each citizen receives from having an educated community is a public good,which of the following would not be correct?

Why is the commercial value of ivory a threat to the elephant,while the commercial value of beef is the cow's guardian?

Which of the following is not a reason why government agencies subsidize basic research?

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 the streetlights equally.If the families vote to determine the number of streetlights to install,basing their decision solely on their own willingness to pay (and trying to maximize their own surplus),what is the greatest number of streetlights for which the majority of families would vote "yes?"

Both public goods and common resources are