Question 1

Use the table below to answer the following questions.
Table 17.2.1
  
-In Table 17.2.1, which one of the proposals will have the greatest support?

Accepted Answer

A) Current income distribution 
B) Proposal A 
C) Proposal B 
D) Proposal C 
E) Proposal A or C 
A) Current income distribution 
B) Proposal A 
C) Proposal B 
D) Proposal C 
E) Proposal A or C

Question 2

An example of common resource is

Accepted Answer

A) fish in the ocean. 
B) air traffic control. 
C) the Ambassador Bridge which goes between Windsor Ontario and Detroit. 
D) the Internet. 
E) national defence. 
A) fish in the ocean. 
B) air traffic control. 
C) the Ambassador Bridge which goes between Windsor Ontario and Detroit. 
D) the Internet. 
E) national defence.

Question 3

The air in the atmosphere is

Accepted Answer

A) nonrival and nonexcludable. 
B) rival and nonexcludable. 
C) nonrival and excludable. 
D) rival and excludable. 
E) a private good. 
A) nonrival and nonexcludable. 
B) rival and nonexcludable. 
C) nonrival and excludable. 
D) rival and excludable. 
E) a private good.

Question 4

Suppose Bryan Adams wants to perform a concert in the City Park in Corner Brook Newfoundland. The city officials argue that the only way the concert can be given permission to be performed in the City Park is if it is free of charge. If Bryan Adams agrees to performing free of charge, then the concert is

Accepted Answer

A) excludable. 
B) a private good. 
C) nonexcludable. 
D) rival. 
E) rival and nonexcludable. 
A) excludable. 
B) a private good. 
C) nonexcludable. 
D) rival. 
E) rival and nonexcludable.

Question 5

When a good is nonrival and nonexcludable, it is a

Accepted Answer

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

Question 6

The idea that the platforms of the political parties will tend to become similar over time is

Accepted Answer

A) not a reflection of reality. 
B) true in theory but not true in actuality. 
C) called the principle of minimum differentiation. 
D) called the principle of minimal political confrontation. 
E) the result of intense lobbying pressure. 
A) not a reflection of reality. 
B) true in theory but not true in actuality. 
C) called the principle of minimum differentiation. 
D) called the principle of minimal political confrontation. 
E) the result of intense lobbying pressure.

Question 7

A view of the sunset is

Accepted Answer

A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good. 
A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good.

Question 8

Public choice theory assumes those involved in the political process are motivated by

Accepted Answer

A) self-interest. 
B) the desire to achieve efficiency. 
C) dishonesty. 
D) public spirit. 
E) the desire for maximum profit. 
A) self-interest. 
B) the desire to achieve efficiency. 
C) dishonesty. 
D) public spirit. 
E) the desire for maximum profit.

Question 9

Public choice theory predicts that

Accepted Answer

A) voters are fully informed about the effects of policies. 
B) voters are rationally ignorant. 
C) governments make choices that achieve an efficient provision of public goods. 
D) votes are based on reality, not perceptions. 
E) votes are based on lobbyists' viewpoints. 
A) voters are fully informed about the effects of policies. 
B) voters are rationally ignorant. 
C) governments make choices that achieve an efficient provision of public goods. 
D) votes are based on reality, not perceptions. 
E) votes are based on lobbyists' viewpoints.

Question 10

Use the figure below to answer the following questions.
   
Figure 17.3.1
-Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource. The equilibrium quantity in an unregulated market is

Accepted Answer

A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week. 
A) 0 kilograms a week. 
B) 4,000 kilograms a week. 
C) 3,000 kilograms a week. 
D) 5,000 kilograms a week. 
E) 1,000 kilograms a week.

Question 11

The budget of a government department is likely to be efficient if

Accepted Answer

A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of public choice theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities. 
A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of public choice theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities.

Question 12

When a good is rival and excludable, it is a

Accepted Answer

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

Question 13

The "tragedy of the commons" refers to

Accepted Answer

A) the inability of lower income groups to achieve a higher level of education. 
B) the absence of incentives to prevent the overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably. 
C) the acceptance of deplorable working conditions by those who lack the human capital to obtain a better job. 
D) the tendency for bureaucrats to maximize their budget. 
E) farmers who allow their livestock to overgraze their fields. 
A) the inability of lower income groups to achieve a higher level of education. 
B) the absence of incentives to prevent the overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably. 
C) the acceptance of deplorable working conditions by those who lack the human capital to obtain a better job. 
D) the tendency for bureaucrats to maximize their budget. 
E) farmers who allow their livestock to overgraze their fields.

Question 14

Which of the following achieves the efficient use of a common resource?

Accepted Answer

A) property rights, production quotas, and individual transferable quotas 
B) property rights, individual transferable quotas, and subsidies 
C) property rights, production quotas, and subsidies 
D) individual transferable quotas and copyrights 
E) production quotas, individual transferable quotas, and copyrights 
A) property rights, production quotas, and individual transferable quotas 
B) property rights, individual transferable quotas, and subsidies 
C) property rights, production quotas, and subsidies 
D) individual transferable quotas and copyrights 
E) production quotas, individual transferable quotas, and copyrights

Question 15

Setting a production quota does not always achieve the efficient use of a common resource because

Accepted Answer

A) marginal cost differs for each producer and it is in everyone's self-interest to cheat and produce more than the assigned quota. 
B) the marginal private benefit from a production quota is zero. 
C) marginal cost differs for each producer and the marginal social benefit from a production quota is zero. 
D) a production quota does not totally eliminate the problem of free-ridership of a common resource. 
E) the Coase theorem is invalid in this market. 
A) marginal cost differs for each producer and it is in everyone's self-interest to cheat and produce more than the assigned quota. 
B) the marginal private benefit from a production quota is zero. 
C) marginal cost differs for each producer and the marginal social benefit from a production quota is zero. 
D) a production quota does not totally eliminate the problem of free-ridership of a common resource. 
E) the Coase theorem is invalid in this market.

Question 16

The marginal social benefit curve for a public good is derived by

Accepted Answer

A) adding the marginal benefits of all individuals at each quantity. 
B) adding the quantities demanded by all individuals at each price. 
C) surveying consumers and asking how much they use a certain good or service. 
D) adding the total benefits for all consumers for a given quantity of the good. 
E) finding the maximum amount someone is willing to pay for one more unit of the good. 
A) adding the marginal benefits of all individuals at each quantity. 
B) adding the quantities demanded by all individuals at each price. 
C) surveying consumers and asking how much they use a certain good or service. 
D) adding the total benefits for all consumers for a given quantity of the good. 
E) finding the maximum amount someone is willing to pay for one more unit of the good.

Question 17

If a good is a public good,

Accepted Answer

A) anyone can be excluded from enjoying its benefits. 
B) no one can be excluded from enjoying its benefits. 
C) consumers must pay a high price to enjoy its benefits. 
D) it is rival and excludable. 
E) economies of scale exist over the entire range of output for which there is a demand. 
A) anyone can be excluded from enjoying its benefits. 
B) no one can be excluded from enjoying its benefits. 
C) consumers must pay a high price to enjoy its benefits. 
D) it is rival and excludable. 
E) economies of scale exist over the entire range of output for which there is a demand.

Question 18

An individual transferable quota is a production limit that

Accepted Answer

A) has a price equal to marginal cost. 
B) is assigned to every producer in the industry at a predetermined price. 
C) is assigned to an individual who must transfer the quota to anyone the government assigns. 
D) is assigned to an individual who is free to transfer the quota to someone else. 
E) has a price equal to marginal benefit. 
A) has a price equal to marginal cost. 
B) is assigned to every producer in the industry at a predetermined price. 
C) is assigned to an individual who must transfer the quota to anyone the government assigns. 
D) is assigned to an individual who is free to transfer the quota to someone else. 
E) has a price equal to marginal benefit.

Question 19

Free riding can occur if a good is

Accepted Answer

A) excludable and rival. 
B) excludable and nonrival. 
C) a private good. 
D) nonexcludable and rival. 
E) nonexcludable and nonrival. 
A) excludable and rival. 
B) excludable and nonrival. 
C) a private good. 
D) nonexcludable and rival. 
E) nonexcludable and nonrival.

Question 20

For a private good, the economy's marginal social benefit curve is the ________ sum of the individual marginal benefit curves and for a public good, the economy's marginal social benefit curve is the ________ sum of the individual marginal benefit curves.

Accepted Answer

A) vertical; vertical 
B) vertical; horizontal 
C) horizontal; vertical 
D) horizontal; horizontal 
E) horizontal and vertical; vertical and horizontal 
A) vertical; vertical 
B) vertical; horizontal 
C) horizontal; vertical 
D) horizontal; horizontal 
E) horizontal and vertical; vertical and horizontal

Exam 17: Public Goods and Common Resources

Use the table below to answer the following questions. Table 17.2.1 -In Table 17.2.1, which one of the proposals will have the greatest support?

An example of common resource is

The air in the atmosphere is

When a good is nonrival and nonexcludable, it is a

The idea that the platforms of the political parties will tend to become similar over time is

A view of the sunset is

Public choice theory assumes those involved in the political process are motivated by

Public choice theory predicts that

Use the figure below to answer the following questions. Figure 17.3.1 -Figure 17.3.1 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource. The equilibrium quantity in an unregulated market is

The budget of a government department is likely to be efficient if

When a good is rival and excludable, it is a

The "tragedy of the commons" refers to

Which of the following achieves the efficient use of a common resource?

Setting a production quota does not always achieve the efficient use of a common resource because

The marginal social benefit curve for a public good is derived by

If a good is a public good,

An individual transferable quota is a production limit that

Free riding can occur if a good is

For a private good, the economy's marginal social benefit curve is the ________ sum of the individual marginal benefit curves and for a public good, the economy's marginal social benefit curve is the ________ sum of the individual marginal benefit curves.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters

For a private good, the economy's marginal social benefit curve is the sum of the individual marginal benefit curves and for a public good, the economy's marginal social benefit curve is the sum of the individual marginal benefit curves.