Question 1

The efficient quantity of a public good can't be produced by private firms because

Accepted Answer

A)  only the government has the necessary resources. 
B)  it is impossible to determine the efficient amount. 
C)  consumers have an incentive to free ride and not pay for their share of the good. 
D)  private firms aren't large enough. 
E)  the price would be too high if private firms produced the goods. 
A)  only the government has the necessary resources. 
B)  it is impossible to determine the efficient amount. 
C)  consumers have an incentive to free ride and not pay for their share of the good. 
D)  private firms aren't large enough. 
E)  the price would be too high if private firms produced the goods.

Question 2

A good or resource that is both nonrival and nonexcludable is

Accepted Answer

A)  a good that is impossible to produce. 
B)  a private good. 
C)  a common resource. 
D)  a public good. 
E)  nonexistent because it is impossible for a good or resource to be both nonrival and nonexcludable. 
A)  a good that is impossible to produce. 
B)  a private good. 
C)  a common resource. 
D)  a public good. 
E)  nonexistent because it is impossible for a good or resource to be both nonrival and nonexcludable.

Question 3

The fact that Florida's consumption of national defense does not preclude North Dakota from consuming the same national defense is an example of

Accepted Answer

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

Question 4

Which of the following is true?
i.A common resource is a resource that is nonrival and nonexcludable.
ii.Issuing individual transferable quotas (ITQ)means that for users of common resources,the marginal cost plus the price of the ITQ equals the marginal social cost.
iii.In an unregulated market,a common resource is used to the point at which marginal private benefit equals marginal cost.

Accepted Answer

A)  Only i 
B)  Only ii 
C)  Only iii 
D)  i and ii 
E)  ii and iii 
A)  Only i 
B)  Only ii 
C)  Only iii 
D)  i and ii 
E)  ii and iii

Question 5

When a production quota is used to remedy the tragedy of the commons,then

Accepted Answer

A)  the quota is set so that use of the resource is where marginal private benefit equals marginal private cost. 
B)  the quota is set so that use of the resource is where marginal private benefit equals marginal social benefit. 
C)  the market equilibrium, but not the efficient outcome, is achieved. 
D)  users of the resource have an incentive to cheat on the quota. 
E)  previous users of the resource are given the incentive to avoid use of the resource. 
A)  the quota is set so that use of the resource is where marginal private benefit equals marginal private cost. 
B)  the quota is set so that use of the resource is where marginal private benefit equals marginal social benefit. 
C)  the market equilibrium, but not the efficient outcome, is achieved. 
D)  users of the resource have an incentive to cheat on the quota. 
E)  previous users of the resource are given the incentive to avoid use of the resource.

Question 6

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

Accepted Answer

A)  the free-rider problem. 
B)  the principle of minimum differentiation. 
C)  the public provision of a good. 
D)  a public good. 
E)  rational ignorance on the part of Burger King. 
A)  the free-rider problem. 
B)  the principle of minimum differentiation. 
C)  the public provision of a good. 
D)  a public good. 
E)  rational ignorance on the part of Burger King.

Question 7

To achieve the efficient amount of use of a common resource,the use should be such that ________ equals ________.

Accepted Answer

A)  marginal social cost; marginal private cost 
B)  marginal social cost; marginal social benefit 
C)  marginal private benefit; marginal cost 
D)  marginal cost; marginal benefit 
E)  marginal social benefit; marginal private cost 
A)  marginal social cost; marginal private cost 
B)  marginal social cost; marginal social benefit 
C)  marginal private benefit; marginal cost 
D)  marginal cost; marginal benefit 
E)  marginal social benefit; marginal private cost

Question 8

A professional football game played in a completely full stadium is NOT a public good because it is

Accepted Answer

A)  nonexcludable and nonrival. 
B)  excludable and nonrival. 
C)  excludable and rival. 
D)  nonexcludable and rival. 
E)  not supplied by the government. 
A)  nonexcludable and nonrival. 
B)  excludable and nonrival. 
C)  excludable and rival. 
D)  nonexcludable and rival. 
E)  not supplied by the government.

Question 9

Some resources are private and others are common.Define a common resource,explain the definition,and provide an example of a private resource and a common resource.

Accepted Answer

A common resource is rival and nonexclud

Question 10

The government can be large in size because of

Accepted Answer

A)  inefficient overprovision caused by high voter turnout in elections. 
B)  efficient overprovision caused by rational voter ignorance. 
C)  inefficient overprovision caused by rational voter ignorance. 
D)  efficient overprovision caused by irrational voter ignorance. 
E)  inefficient overprovision caused by rational politician/bureaucrat ignorance. 
A)  inefficient overprovision caused by high voter turnout in elections. 
B)  efficient overprovision caused by rational voter ignorance. 
C)  inefficient overprovision caused by rational voter ignorance. 
D)  efficient overprovision caused by irrational voter ignorance. 
E)  inefficient overprovision caused by rational politician/bureaucrat ignorance.

Question 11

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

Accepted Answer

A)  the principle of minimum differentiation. 
B)  provision of a public good. 
C)  rational ignorance. 
D)  overproduction of a private good. 
E)  overproduction of a public good. 
A)  the principle of minimum differentiation. 
B)  provision of a public good. 
C)  rational ignorance. 
D)  overproduction of a private good. 
E)  overproduction of a public good.

Question 12

Why is watching sports more important to many prospective voters than watching the news? In your answer,mention the role played by rational ignorance and the cost of gathering information.

Accepted Answer

It takes a great deal of time to learn a

Question 13

The free-rider problem applies

Accepted Answer

A)  to rival and excludable goods. 
B)  to common resources. 
C)  to nonrival and nonexcludable goods. 
D)  when marginal social benefit exceeds marginal private benefit. 
E)  when marginal social cost equals marginal private cost. 
A)  to rival and excludable goods. 
B)  to common resources. 
C)  to nonrival and nonexcludable goods. 
D)  when marginal social benefit exceeds marginal private benefit. 
E)  when marginal social cost equals marginal private cost.

Question 14

-The table above shows the marginal benefit that arises from providing police protection in an economy of two people,Paul and Art.
a.Construct a table of the economy's marginal benefit from providing police protection.
b.What is the economy's marginal benefit from having 3 police cars on duty?

Accepted Answer

@#IMG-DLM& 
a.The table showing the economy's marg

Question 15

Marginal cost curves for public goods are usually

Accepted Answer

A)  downward sloping. 
B)  upward sloping. 
C)  horizontal. 
D)  vertical. 
E)  U-shaped. 
A)  downward sloping. 
B)  upward sloping. 
C)  horizontal. 
D)  vertical. 
E)  U-shaped.

Question 16

Sue and Mark are the only two members of a community.Sue's marginal benefit from one lighthouse is $2,000 and Mark's marginal benefit is $1,000.If the marginal cost of one lighthouse is $2,500 and if a lighthouse is a public good,then for efficiency the lighthouse should

Accepted Answer

A)  be built but only Sue should be allowed to use it. 
B)  be built but only Mark should be allowed to use it. 
C)  be built and both Sue and Mark should be allowed to use it. 
D)  not be built because its marginal cost exceeds Sue's marginal benefit. 
E)  not be built because its marginal cost exceeds both Sue's and Mark's marginal benefit. 
A)  be built but only Sue should be allowed to use it. 
B)  be built but only Mark should be allowed to use it. 
C)  be built and both Sue and Mark should be allowed to use it. 
D)  not be built because its marginal cost exceeds Sue's marginal benefit. 
E)  not be built because its marginal cost exceeds both Sue's and Mark's marginal benefit.

Question 17

A private good is

Accepted Answer

A)  nonexcludable and nonrival. 
B)  excludable and rival. 
C)  excludable and nonrival. 
D)  nonrival and excludable. 
E)  subject to the free-riding problem. 
A)  nonexcludable and nonrival. 
B)  excludable and rival. 
C)  excludable and nonrival. 
D)  nonrival and excludable. 
E)  subject to the free-riding problem.

Question 18

-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 25 officers,then

Accepted Answer

A)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is more than 25. 
B)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is less than 25. 
C)  marginal benefit will exceed marginal cost, which means that Hugo should reduce the number of officers they hire. 
D)  marginal benefit equals marginal cost. 
E)  None of the above answers is correct. 
A)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is more than 25. 
B)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is less than 25. 
C)  marginal benefit will exceed marginal cost, which means that Hugo should reduce the number of officers they hire. 
D)  marginal benefit equals marginal cost. 
E)  None of the above answers is correct.

Question 19

The free-rider problem for a public good means that

Accepted Answer

A)  a private market would provide less than the efficient amount of the good. 
B)  a private market would provide more than the efficient amount of the good. 
C)  the good is rival. 
D)  the good is excludable. 
E)  a private market would provide the efficient amount of the good. 
A)  a private market would provide less than the efficient amount of the good. 
B)  a private market would provide more than the efficient amount of the good. 
C)  the good is rival. 
D)  the good is excludable. 
E)  a private market would provide the efficient amount of the good.

Question 20

A public good

Accepted Answer

A)  only yields benefits to those that decide to buy it. 
B)  is the same as a common resource. 
C)  is nonrival and nonexcludable. 
D)  is rival. 
A)  only yields benefits to those that decide to buy it. 
B)  is the same as a common resource. 
C)  is nonrival and nonexcludable. 
D)  is rival.

The efficient quantity of a public good can't be produced by private firms because

A good or resource that is both nonrival and nonexcludable is

The fact that Florida's consumption of national defense does not preclude North Dakota from consuming the same national defense is an example of

When a production quota is used to remedy the tragedy of the commons,then

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

To achieve the efficient amount of use of a common resource,the use should be such that equals .

A professional football game played in a completely full stadium is NOT a public good because it is

Some resources are private and others are common.Define a common resource,explain the definition,and provide an example of a private resource and a common resource.

The government can be large in size because of

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

Why is watching sports more important to many prospective voters than watching the news? In your answer,mention the role played by rational ignorance and the cost of gathering information.

The free-rider problem applies

-The table above shows the marginal benefit that arises from providing police protection in an economy of two people,Paul and Art. a.Construct a table of the economy's marginal benefit from providing police protection. b.What is the economy's marginal benefit from having 3 police cars on duty?

Marginal cost curves for public goods are usually

Sue and Mark are the only two members of a community.Sue's marginal benefit from one lighthouse is $2,000 and Mark's marginal benefit is $1,000.If the marginal cost of one lighthouse is $2,500 and if a lighthouse is a public good,then for efficiency the lighthouse should

A private good is

-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 25 officers,then

The free-rider problem for a public good means that

A public good

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 efficient quantity of a public good can't be produced by private firms because

A good or resource that is both nonrival and nonexcludable is

The fact that Florida's consumption of national defense does not preclude North Dakota from consuming the same national defense is an example of

When a production quota is used to remedy the tragedy of the commons,then

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

To achieve the efficient amount of use of a common resource,the use should be such that ________ equals ________.

A professional football game played in a completely full stadium is NOT a public good because it is

Some resources are private and others are common.Define a common resource,explain the definition,and provide an example of a private resource and a common resource.

The government can be large in size because of

Lowe's starts to offer free weekend carpentry classes because Home Depot does.This decision is an example of

Why is watching sports more important to many prospective voters than watching the news? In your answer,mention the role played by rational ignorance and the cost of gathering information.

The free-rider problem applies

-The table above shows the marginal benefit that arises from providing police protection in an economy of two people,Paul and Art. a.Construct a table of the economy's marginal benefit from providing police protection. b.What is the economy's marginal benefit from having 3 police cars on duty?

Marginal cost curves for public goods are usually

Sue and Mark are the only two members of a community.Sue's marginal benefit from one lighthouse is $2,000 and Mark's marginal benefit is $1,000.If the marginal cost of one lighthouse is $2,500 and if a lighthouse is a public good,then for efficiency the lighthouse should

A private good is

-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 25 officers,then

The free-rider problem for a public good means that

A public good

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

To achieve the efficient amount of use of a common resource,the use should be such that equals .