Question 1

The marginal benefit curve of a public good is calculated by ________ individual marginal ________ curves.

Accepted Answer

A)  averaging; cost/benefit 
B)  horizontally summing; cost 
C)  averaging; benefit 
D)  vertically summing; benefit 
E)  horizontally summing; benefit 
A)  averaging; cost/benefit 
B)  horizontally summing; cost 
C)  averaging; benefit 
D)  vertically summing; benefit 
E)  horizontally summing; benefit

Question 2

Rational ignorance is the decision NOT to

Accepted Answer

A)  vote in elections. 
B)  acquire information because the marginal benefit of doing so exceeds the marginal cost. 
C)  acquire information because the marginal cost of doing so exceeds the expected marginal benefit. 
D)  acquire information because the marginal cost of doing so equals the expected marginal benefit. 
E)  follow the principle of minimum differentiation. 
A)  vote in elections. 
B)  acquire information because the marginal benefit of doing so exceeds the marginal cost. 
C)  acquire information because the marginal cost of doing so exceeds the expected marginal benefit. 
D)  acquire information because the marginal cost of doing so equals the expected marginal benefit. 
E)  follow the principle of minimum differentiation.

Question 3

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

Accepted Answer

A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  300 tons per week 
E)  500 tons per week 
A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  300 tons per week 
E)  500 tons per week

Question 4

If a good or resource is rival,it could be a

Accepted Answer

A)  public good. 
B)  private good. 
C)  common resource. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct. 
A)  public good. 
B)  private good. 
C)  common resource. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct.

Question 5

One important feature that distinguishes a public good from a private good is that

Accepted Answer

A)  only the government can produce public goods. 
B)  it is impossible to prevent a person from enjoying the benefits from a public good. 
C)  if you pay for a unit of a public good, you are guaranteed to be the sole consumer. 
D)  if you consume a unit of a public good, there is one unit less for someone else. 
E)  Both answers C and D are correct. 
A)  only the government can produce public goods. 
B)  it is impossible to prevent a person from enjoying the benefits from a public good. 
C)  if you pay for a unit of a public good, you are guaranteed to be the sole consumer. 
D)  if you consume a unit of a public good, there is one unit less for someone else. 
E)  Both answers C and D are correct.

Question 6

What is an individual transferable quota (ITQ)?

Accepted Answer

An ITQ is a production limit that is ass

Question 7

"The problem with a common resource is that no one gets to use the resource." Comment on the preceding assertion.

Accepted Answer

The assertion is totally false; the prob

Question 8

To determine the efficient quantity of a public good to supply,

Accepted Answer

A)  the private firms that will produce the good each produce the exact same quantity. 
B)  marginal benefit and marginal cost are equated, the same as is done to determine the efficient quantity of a private good. 
C)  total benefit is equated to total cost, the same as is done to determine the efficient quantity of a private good. 
D)  politicians use the principle of maximum differentiation. 
E)  marginal benefit must exceed marginal cost by as much as possible. 
A)  the private firms that will produce the good each produce the exact same quantity. 
B)  marginal benefit and marginal cost are equated, the same as is done to determine the efficient quantity of a private good. 
C)  total benefit is equated to total cost, the same as is done to determine the efficient quantity of a private good. 
D)  politicians use the principle of maximum differentiation. 
E)  marginal benefit must exceed marginal cost by as much as possible.

Question 9

The efficient quantity of a public good is the quantity at which marginal benefit is

Accepted Answer

A)  greater than marginal cost by any amount. 
B)  less than marginal cost. 
C)  equal to marginal cost. 
D)  zero. 
E)  greater than marginal cost by the maximum amount. 
A)  greater than marginal cost by any amount. 
B)  less than marginal cost. 
C)  equal to marginal cost. 
D)  zero. 
E)  greater than marginal cost by the maximum amount.

Question 10

One way to overcome the tragedy of the commons is to

Accepted Answer

A)  assign property rights so that someone owns the resource. 
B)  take away property rights so that no one owns the resource. 
C)  leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. 
D)  educate people in order to overcome the problem of rational ignorance. 
E)  None of the above answers is correct. 
A)  assign property rights so that someone owns the resource. 
B)  take away property rights so that no one owns the resource. 
C)  leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. 
D)  educate people in order to overcome the problem of rational ignorance. 
E)  None of the above answers is correct.

Question 11

For a common resource,the marginal private cost curve ________ and the marginal social cost curve ________.

Accepted Answer

A)  slopes upward; slopes upward 
B)  slopes upward; slopes downward 
C)  slopes downward; slopes upward 
D)  slopes downward; slopes downward 
E)  is vertical; is horizontal 
A)  slopes upward; slopes upward 
B)  slopes upward; slopes downward 
C)  slopes downward; slopes upward 
D)  slopes downward; slopes downward 
E)  is vertical; is horizontal

Question 12

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture,the farmer raises ________.

Accepted Answer

A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct. 
A)  0 goats 
B)  40 goats 
C)  50 goats 
D)  55 goats 
E)  None of the above answers is correct.

Question 13

The fact that Sha's enjoyment of a sunset on Saint Simon's Island does not preclude Lou from enjoying the sunset is an example of

Accepted Answer

A)  a good that is nonrival. 
B)  a good that is excludable. 
C)  a private good. 
D)  the rival nature of consumption. 
E)  a common resource. 
A)  a good that is nonrival. 
B)  a good that is excludable. 
C)  a private good. 
D)  the rival nature of consumption. 
E)  a common resource.

Question 14

In which of the following cases does the tragedy of the commons occur?
i.cattle grazing on private ranches
ii.catching lobsters off the coast of Florida
iii.raising salmon on salmon farms
iv.using legal services provided by the courts

Accepted Answer

A)  i only 
B)  ii only 
C)  ii and iii 
D)  i and iv 
E)  i and iii 
A)  i only 
B)  ii only 
C)  ii and iii 
D)  i and iv 
E)  i and iii

Question 15

-The figure above shows the marginal cost and marginal benefit of police protection in the city of Hugo,Oklahoma.Police protection is a public good.If the city of Hugo hires 5 officers,marginal

Accepted Answer

A)  cost exceeds marginal benefit, so therefore fewer officers should be hired. 
B)  benefit exceeds marginal cost, so therefore more officers should be hired. 
C)  benefit equals marginal cost. 
D)  benefit exceeds marginal cost, so therefore no more officers should be hired. 
E)  benefit exceeds marginal cost but not by as much as possible, so 5 officers is not the efficient number to be hired. 
A)  cost exceeds marginal benefit, so therefore fewer officers should be hired. 
B)  benefit exceeds marginal cost, so therefore more officers should be hired. 
C)  benefit equals marginal cost. 
D)  benefit exceeds marginal cost, so therefore no more officers should be hired. 
E)  benefit exceeds marginal cost but not by as much as possible, so 5 officers is not the efficient number to be hired.

Question 16

Which of the following is necessary for competition in the political marketplace to result in the production of the efficient amount of a public good?

Accepted Answer

A)  bureaucrats practice self-interest 
B)  well informed voters and political parties 
C)  rational ignorance 
D)  maximum differentiation of political competitors 
E)  Answers A, B and D are correct. 
A)  bureaucrats practice self-interest 
B)  well informed voters and political parties 
C)  rational ignorance 
D)  maximum differentiation of political competitors 
E)  Answers A, B and D are correct.

Question 17

Under what conditions will the political process provide an inefficient amount of a public good?

Accepted Answer

The government will provide an inefficie

Question 18

Why isn't national defense provided by free markets?

Accepted Answer

National defense is a public good.This f

Question 19

How does the principle of minimum differentiation relate to the free-rider problem?

Accepted Answer

The free-rider problem requires that the

Question 20

What is the tragedy of the commons?

Accepted Answer

The tragedy of the commons is the absenc

The marginal benefit curve of a public good is calculated by individual marginal curves.

Rational ignorance is the decision NOT to

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

If a good or resource is rival,it could be a

One important feature that distinguishes a public good from a private good is that

What is an individual transferable quota (ITQ)?

"The problem with a common resource is that no one gets to use the resource." Comment on the preceding assertion.

To determine the efficient quantity of a public good to supply,

The efficient quantity of a public good is the quantity at which marginal benefit is

One way to overcome the tragedy of the commons is to

For a common resource,the marginal private cost curve and the marginal social cost curve .

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture,the farmer raises ________.

The fact that Sha's enjoyment of a sunset on Saint Simon's Island does not preclude Lou from enjoying the sunset is an example of

In which of the following cases does the tragedy of the commons occur? i.cattle grazing on private ranches ii.catching lobsters off the coast of Florida iii.raising salmon on salmon farms iv.using legal services provided by the courts

-The figure above shows the marginal cost and marginal benefit of police protection in the city of Hugo,Oklahoma.Police protection is a public good.If the city of Hugo hires 5 officers,marginal

Which of the following is necessary for competition in the political marketplace to result in the production of the efficient amount of a public good?

Under what conditions will the political process provide an inefficient amount of a public good?

Why isn't national defense provided by free markets?

How does the principle of minimum differentiation relate to the free-rider problem?

What is the tragedy of the commons?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Public Goods and Common Resources

The marginal benefit curve of a public good is calculated by ________ individual marginal ________ curves.

Rational ignorance is the decision NOT to

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

If a good or resource is rival,it could be a

One important feature that distinguishes a public good from a private good is that

What is an individual transferable quota (ITQ)?

"The problem with a common resource is that no one gets to use the resource." Comment on the preceding assertion.

To determine the efficient quantity of a public good to supply,

The efficient quantity of a public good is the quantity at which marginal benefit is

One way to overcome the tragedy of the commons is to

For a common resource,the marginal private cost curve ________ and the marginal social cost curve ________.

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for raising goats on a common pasture.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture,the farmer raises ________.

The fact that Sha's enjoyment of a sunset on Saint Simon's Island does not preclude Lou from enjoying the sunset is an example of

In which of the following cases does the tragedy of the commons occur? i.cattle grazing on private ranches ii.catching lobsters off the coast of Florida iii.raising salmon on salmon farms iv.using legal services provided by the courts

-The figure above shows the marginal cost and marginal benefit of police protection in the city of Hugo,Oklahoma.Police protection is a public good.If the city of Hugo hires 5 officers,marginal

Which of the following is necessary for competition in the political marketplace to result in the production of the efficient amount of a public good?

Under what conditions will the political process provide an inefficient amount of a public good?

Why isn't national defense provided by free markets?

How does the principle of minimum differentiation relate to the free-rider problem?

What is the tragedy of the commons?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

The marginal benefit curve of a public good is calculated by individual marginal curves.

For a common resource,the marginal private cost curve and the marginal social cost curve .