Question 1

How are public goods classified

Accepted Answer

A) excludable but not rival in consumption 
B) rival in consumption but not excludable 
C) both excludable and rival in consumption 
D) neither excludable nor rival in consumption 
A) excludable but not rival in consumption 
B) rival in consumption but not excludable 
C) both excludable and rival in consumption 
D) neither excludable nor rival in consumption

Question 2

What happens after the government levies the tax on gasoline

Accepted Answer

A) It does not reduce traffic volume. 
B) It is the best solution to road congestion because it gives private individuals an incentive to internalize the congestion externality. 
C) It discourages driving on noncongested roads even though there is no congestion externality for these roads. 
D) It has little effect on driving behaviour. 
A) It does not reduce traffic volume. 
B) It is the best solution to road congestion because it gives private individuals an incentive to internalize the congestion externality. 
C) It discourages driving on noncongested roads even though there is no congestion externality for these roads. 
D) It has little effect on driving behaviour.

Question 3

What is one way to eliminate the Tragedy of the Commons

Accepted Answer

A) increase law enforcement in public areas 
B) limit access to the commons 
C) increase access to the commons 
D) provide more public land for recreation 
A) increase law enforcement in public areas 
B) limit access to the commons 
C) increase access to the commons 
D) provide more public land for recreation

Question 4

Clean air and clean water are both public goods.

Accepted Answer

A) True 
 B)False

Question 5

Suppose that you want to put on a parade in your home town of 1000 people.The cost of the parade is $6000 and each person values the parade at $5.After a month,you have only sold 50 tickets at $5 each.What is the result

Accepted Answer

A) The local government will put on the parade but you will not. 
B) You will still put on the parade but the local government will not. 
C) Neither you nor the local government will put on the parade. 
D) You and the local government will compete for the parade. 
A) The local government will put on the parade but you will not. 
B) You will still put on the parade but the local government will not. 
C) Neither you nor the local government will put on the parade. 
D) You and the local government will compete for the parade.

Question 6

Because general knowledge is not excludable,which of the following results

Accepted Answer

A) The government contributes to its production. 
B) The cost generally outweighs the benefit to society. 
C) Private markets would choose to not supply any general knowledge to society. 
D) General knowledge cannot be supplied to the market by anyone since it is not a product. 
A) The government contributes to its production. 
B) The cost generally outweighs the benefit to society. 
C) Private markets would choose to not supply any general knowledge to society. 
D) General knowledge cannot be supplied to the market by anyone since it is not a product.

Question 7

In which of the following goods does the free-rider problem exist

Accepted Answer

A) fire protection 
B) knowledge 
C) Internet service 
D) congested toll roads 
A) fire protection 
B) knowledge 
C) Internet service 
D) congested toll roads

Question 8

What is a common theme among examples of market failure

Accepted Answer

A) The good being provided always harms society in some systematic way. 
B) Some item of value does not have an owner with the legal authority to control it. 
C) Cost-benefit analysis is likely to lead to implementation policies that promote private provision of goods and services. 
D) There are regulations that prohibit the efficient functioning of private markets. 
A) The good being provided always harms society in some systematic way. 
B) Some item of value does not have an owner with the legal authority to control it. 
C) Cost-benefit analysis is likely to lead to implementation policies that promote private provision of goods and services. 
D) There are regulations that prohibit the efficient functioning of private markets.

Question 9

What are examples of careers that lend substance to the approach of valuing human life by evaluating the risks that people are voluntarily willing to take and the compensation they require for that risk

Accepted Answer

A) chartered accountants at tax time 
B) construction workers on high-rise buildings 
C) dentists 
D) nurses 
A) chartered accountants at tax time 
B) construction workers on high-rise buildings 
C) dentists 
D) nurses

Question 10

Some advocates of antipoverty programs claim that fighting poverty is a public good.Explain what these advocates mean by classifying charity as a public good.What does this have to do with the need for government intervention

Accepted Answer

Eliminating poverty is not a good that t

Question 11

What are goods that are nonexcludable and nonrival in consumption

Accepted Answer

A) public goods 
B) private goods 
C) natural monopolies 
D) common resources 
A) public goods 
B) private goods 
C) natural monopolies 
D) common resources

Question 12

Tolls could not be used to alter people's incentives to drive during rush hour.

Accepted Answer

A) True 
 B)False

Question 13

In almost all cases,what is the problem with overuse of common resources

Accepted Answer

A) The allocation of private property rights leads to overuse of the common resource. 
B) Private decision makers use the common resource too much. 
C) Government policy allows unequal division of the common resource. 
D) There are an insufficient number of common resources available for use. 
A) The allocation of private property rights leads to overuse of the common resource. 
B) Private decision makers use the common resource too much. 
C) Government policy allows unequal division of the common resource. 
D) There are an insufficient number of common resources available for use.

Question 14

What is one potential solution to overused,deteriorating national parks

Accepted Answer

A) to have Parliament increase the entrance fees 
B) to decrease the area accessible to park users 
C) to decrease management and maintenance of facilities 
D) to reduce the number of improved camping facilities 
A) to have Parliament increase the entrance fees 
B) to decrease the area accessible to park users 
C) to decrease management and maintenance of facilities 
D) to reduce the number of improved camping facilities

Question 15

Can we use cost and benefit analysis to evaluate human life and how

Accepted Answer

Even though it is difficult,in many situ

Question 16

Which of the following would be considered a private good

Accepted Answer

A) national defence 
B) a public beach 
C) local Internet service 
D) a bottle of natural mineral water 
A) national defence 
B) a public beach 
C) local Internet service 
D) a bottle of natural mineral water

Question 17

What is using a toll to reduce traffic when congestion is greatest an example of

Accepted Answer

A) a regulation solution 
B) a command-and-control policy 
C) a corrective tax 
D) a Coase theorem solution 
A) a regulation solution 
B) a command-and-control policy 
C) a corrective tax 
D) a Coase theorem solution

Question 18

"The role of government in the economy should be restricted to the assignment and enforcement of property rights." Use this statement to explain why African elephants are on the verge of becoming extinct.What are the governments' possible solutions to this problem

Accepted Answer

A property right is the exclusive author

Question 19

A fireworks display is not excludable because it is virtually impossible to prevent someone from seeing the show.

Accepted Answer

A) True 
 B)False

Question 20

Why it is difficult to use cost-benefit surveys to evaluate government projects

Accepted Answer

A) Respondents to cost-benefit surveys are unable to evaluate the effect of the project on their personal satisfaction. 
B) Respondents to cost-benefit surveys are typically not benefited directly by government projects. 
C) Respondents to cost-benefit surveys have a difficult time identifying explicit costs. 
D) Respondents to cost-benefit surveys have little incentive to tell the truth. 
A) Respondents to cost-benefit surveys are unable to evaluate the effect of the project on their personal satisfaction. 
B) Respondents to cost-benefit surveys are typically not benefited directly by government projects. 
C) Respondents to cost-benefit surveys have a difficult time identifying explicit costs. 
D) Respondents to cost-benefit surveys have little incentive to tell the truth.

Exam 11: Public Goods and Common Resources

How are public goods classified

What happens after the government levies the tax on gasoline

What is one way to eliminate the Tragedy of the Commons

Clean air and clean water are both public goods.

Suppose that you want to put on a parade in your home town of 1000 people.The cost of the parade is $6000 and each person values the parade at $5.After a month,you have only sold 50 tickets at $5 each.What is the result

Because general knowledge is not excludable,which of the following results

In which of the following goods does the free-rider problem exist

What is a common theme among examples of market failure

What are examples of careers that lend substance to the approach of valuing human life by evaluating the risks that people are voluntarily willing to take and the compensation they require for that risk

Some advocates of antipoverty programs claim that fighting poverty is a public good.Explain what these advocates mean by classifying charity as a public good.What does this have to do with the need for government intervention

What are goods that are nonexcludable and nonrival in consumption

Tolls could not be used to alter people's incentives to drive during rush hour.

In almost all cases,what is the problem with overuse of common resources

What is one potential solution to overused,deteriorating national parks

Can we use cost and benefit analysis to evaluate human life and how

Which of the following would be considered a private good

What is using a toll to reduce traffic when congestion is greatest an example of

"The role of government in the economy should be restricted to the assignment and enforcement of property rights." Use this statement to explain why African elephants are on the verge of becoming extinct.What are the governments' possible solutions to this problem

A fireworks display is not excludable because it is virtually impossible to prevent someone from seeing the show.

Why it is difficult to use cost-benefit surveys to evaluate government projects

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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