Question 1

To most economists,the best solution to the overcrowding problem at Yellowstone National Park is to

Accepted Answer

A) increase financial aid from the government. 
B) place daily quotas on the number of vehicles that enter the park. 
C) increase entrance fees to the park. 
D) temporarily close down damaged sections of the park. 
A) increase financial aid from the government. 
B) place daily quotas on the number of vehicles that enter the park. 
C) increase entrance fees to the park. 
D) temporarily close down damaged sections of the park.

Question 2

Some goods can be either common resources or public goods depending on

Accepted Answer

A) whether the good is rival in consumption. 
B) whether the good is excludable. 
C) the marginal cost of the good. 
D) None of the above is correct. 
A) whether the good is rival in consumption. 
B) whether the good is excludable. 
C) the marginal cost of the good. 
D) None of the above is correct.

Question 3

The market does not provide national defense because

Accepted Answer

A) it is impossible to prevent any single person from enjoying the benefit of national defense. 
B) the fixed cost of national defense is too high. 
C) the necessary resources for national defense are not available in the private sector. 
D) All of the above are correct. 
A) it is impossible to prevent any single person from enjoying the benefit of national defense. 
B) the fixed cost of national defense is too high. 
C) the necessary resources for national defense are not available in the private sector. 
D) All of the above are correct.

Question 4

To achieve the optimal provision of public goods,the

Accepted Answer

A) market should be allowed to arrive at an equilibrium without government intervention. 
B) government must limit the provision of the goods. 
C) government must tax producers of the goods. 
D) government must either provide the goods or subsidize their production. 
A) market should be allowed to arrive at an equilibrium without government intervention. 
B) government must limit the provision of the goods. 
C) government must tax producers of the goods. 
D) government must either provide the goods or subsidize their production.

Question 5

Knowledge is an example of a

Accepted Answer

A) public good. 
B) private good. 
C) common resource. 
D) natural monopoly good. 
A) public good. 
B) private good. 
C) common resource. 
D) natural monopoly good.

Question 6

London currently uses a "congestion charge" to tax motorists who want to drive on congested roads in the city.The plan was inspired by which famous economist?

Accepted Answer

A) Karl Marx 
B) Milton Friedman 
C) Arthur Pigou 
D) N.Gregory Mankiw 
A) Karl Marx 
B) Milton Friedman 
C) Arthur Pigou 
D) N.Gregory Mankiw

Question 7

Which of the following goods is rival and not excludable?

Accepted Answer

A) national defense 
B) cable TV service 
C) lobsters in the ocean 
D) a boat 
A) national defense 
B) cable TV service 
C) lobsters in the ocean 
D) a boat

Question 8

The commercial value of ivory is a threat to the elephant,but the commercial value of beef is a guardian of the cow.This is because

Accepted Answer

A) the cow is raised in developed countries, while the elephant lives primarily in less-developed countries. 
B) cows are private goods, while elephants tend to roam freely without owners. 
C) cows and elephants are public goods, but ivory is nonrival. 
D) ivory is nonrival and nonexclusive, but beef is rival and exclusive. 
A) the cow is raised in developed countries, while the elephant lives primarily in less-developed countries. 
B) cows are private goods, while elephants tend to roam freely without owners. 
C) cows and elephants are public goods, but ivory is nonrival. 
D) ivory is nonrival and nonexclusive, but beef is rival and exclusive.

Question 9

Which of the following statements is correct?

Accepted Answer

A) Private goods and public goods are both excludable and rival in consumption. 
B) Private goods are rival in consumption but not excludable, whereas public goods are excludable but not rival in consumption. 
C) Private goods are both excludable and rival in consumption, whereas public goods are neither excludable nor rival in consumption. 
D) Private goods are neither excludable nor rival in consumption, whereas public goods are both excludable and rival in consumption. 
A) Private goods and public goods are both excludable and rival in consumption. 
B) Private goods are rival in consumption but not excludable, whereas public goods are excludable but not rival in consumption. 
C) Private goods are both excludable and rival in consumption, whereas public goods are neither excludable nor rival in consumption. 
D) Private goods are neither excludable nor rival in consumption, whereas public goods are both excludable and rival in consumption.

Question 10

The overuse of a common resource relative to its economically efficient use is called

Accepted Answer

A) monopolistic competition. 
B) the Tragedy of the Commons. 
C) common resource abuse. 
D) communism. 
A) monopolistic competition. 
B) the Tragedy of the Commons. 
C) common resource abuse. 
D) communism.

Question 11

A Maine legislator wanted to create a deposit on cigarettes butts.If implemented,people would have the incentive to (1)not toss cigarette butts onto public streets and sidewalks,and (2)pick butts up to redeem them for the cash.The degradation of the environment from littered cigarette butts is a

Accepted Answer

A) private goods problem. 
B) Nash equilibrium. 
C) Tragedy of the Commons. 
D) cost-benefit equilibrium. 
A) private goods problem. 
B) Nash equilibrium. 
C) Tragedy of the Commons. 
D) cost-benefit equilibrium.

Question 12

Both public goods and common resources are

Accepted Answer

A) rival in consumption. 
B) nonrival in consumption. 
C) excludable. 
D) nonexcludable. 
A) rival in consumption. 
B) nonrival in consumption. 
C) excludable. 
D) nonexcludable.

Question 13

If one person's use of a good diminishes another person's enjoyment of it,the good is

Accepted Answer

A) rival in consumption. 
B) excludable. 
C) normal. 
D) exhaustible. 
A) rival in consumption. 
B) excludable. 
C) normal. 
D) exhaustible.

Question 14

Even economists who advocate small government agree that national defense is a good that the government should provide.

Accepted Answer

A) True 
 B)False

Question 15

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $100,000.The walkway is expected to reduce the risk of fatality by 0.5 percent,and the cost of a human life is estimated at $10 million.The town should

Accepted Answer

A) install the walkway because the estimated benefit is twice the cost. 
B) install the walkway because the estimated benefit equals the cost. 
C) not install the walkway, since the cost is twice the estimated benefit. 
D) install the walkway, since the cost of even a single life is too great not to take action. 
A) install the walkway because the estimated benefit is twice the cost. 
B) install the walkway because the estimated benefit equals the cost. 
C) not install the walkway, since the cost is twice the estimated benefit. 
D) install the walkway, since the cost of even a single life is too great not to take action.

Question 16

Table 11-1
This table describes the defense demands for three groups of people in Happyville. The second, third, and fourth column shows the quantity that a group will demand for a given price (the first column).
  
-Refer to Table 11-1.What is the value of the 33ʳᵈ unit of national defense in Happyville?

Accepted Answer

A) $0 
B) $2 
C) $4 
D) $6 
A) $0 
B) $2 
C) $4 
D) $6

Question 17

The difference between specific knowledge and general knowledge is that

Accepted Answer

A) the creation of general knowledge is usually more profitable for the creator. 
B) specific knowledge is excludable, while general knowledge is not excludable. 
C) general knowledge is excludable, while specific knowledge is not excludable. 
D) general knowledge is rival in consumption, while specific knowledge is not rival in consumption. 
A) the creation of general knowledge is usually more profitable for the creator. 
B) specific knowledge is excludable, while general knowledge is not excludable. 
C) general knowledge is excludable, while specific knowledge is not excludable. 
D) general knowledge is rival in consumption, while specific knowledge is not rival in consumption.

Question 18

In a cost-benefit analysis,the value of a human life is sometimes calculated on the basis of

Accepted Answer

A) the risks that a person voluntarily exposes herself to in her job and/or recreational choices. 
B) the value of each individual's assets. 
C) the belief that human life is priceless. 
D) the amount of resources required to adequately sustain life. 
A) the risks that a person voluntarily exposes herself to in her job and/or recreational choices. 
B) the value of each individual's assets. 
C) the belief that human life is priceless. 
D) the amount of resources required to adequately sustain life.

Question 19

Which of the following represents a potential solution to the problem of environmental pollution?

Accepted Answer

A) corrective taxes 
B) well-established property rights 
C) government regulation 
D) All of the above are correct. 
A) corrective taxes 
B) well-established property rights 
C) government regulation 
D) All of the above are correct.

Question 20

Private markets usually fail to provide lighthouses because

Accepted Answer

A) lighthouses cost too much to build relative to their benefits. 
B) government intervention makes it hard for private lighthouse owners to compete in the market. 
C) ship captains have incentives to use lighthouses without paying. 
D) lighthouses are valued very little by ship captains these days. 
A) lighthouses cost too much to build relative to their benefits. 
B) government intervention makes it hard for private lighthouse owners to compete in the market. 
C) ship captains have incentives to use lighthouses without paying. 
D) lighthouses are valued very little by ship captains these days.

Exam 11: Public Goods and Common Resources

To most economists,the best solution to the overcrowding problem at Yellowstone National Park is to

Some goods can be either common resources or public goods depending on

The market does not provide national defense because

To achieve the optimal provision of public goods,the

Knowledge is an example of a

London currently uses a "congestion charge" to tax motorists who want to drive on congested roads in the city.The plan was inspired by which famous economist?

Which of the following goods is rival and not excludable?

The commercial value of ivory is a threat to the elephant,but the commercial value of beef is a guardian of the cow.This is because

Which of the following statements is correct?

The overuse of a common resource relative to its economically efficient use is called

A Maine legislator wanted to create a deposit on cigarettes butts.If implemented,people would have the incentive to (1)not toss cigarette butts onto public streets and sidewalks,and (2)pick butts up to redeem them for the cash.The degradation of the environment from littered cigarette butts is a

Both public goods and common resources are

If one person's use of a good diminishes another person's enjoyment of it,the good is

Even economists who advocate small government agree that national defense is a good that the government should provide.

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $100,000.The walkway is expected to reduce the risk of fatality by 0.5 percent,and the cost of a human life is estimated at $10 million.The town should

The difference between specific knowledge and general knowledge is that

In a cost-benefit analysis,the value of a human life is sometimes calculated on the basis of

Which of the following represents a potential solution to the problem of environmental pollution?

Private markets usually fail to provide lighthouses because

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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