Question 1

________ is the decision not to acquire information because the marginal cost of doing so exceeds the marginal benefit.

Accepted Answer

A) Rational ignorance 
B) The principle of minimum differentiation 
C) A free rider 
D) Consumer ignorance 
E) The tragedy of the commons 
A) Rational ignorance 
B) The principle of minimum differentiation 
C) A free rider 
D) Consumer ignorance 
E) The tragedy of the commons A

Question 2

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

Accepted Answer

A) rival 
B) nonrival 
C) nonexcludable 
D) rival and nonexcludable 
E) quasi public/quasi private 
A) rival 
B) nonrival 
C) nonexcludable 
D) rival and nonexcludable 
E) quasi public/quasi private B

Question 3

-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers , $300 per hour.The marginal social cost is twice the marginal private cost.With no government intervention, the equilibrium quantity of fish caught is ________ tons.

Accepted Answer

A) 100 
B) 200 
C) 300 
D) 400 
E) 500 
A) 100 
B) 200 
C) 300 
D) 400 
E) 500 E

Question 4

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 5

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

Accepted Answer

The government will provide an inefficie

Question 6

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 7

Which of the following can be rival and excludable?
i. a good
ii. a service
iii. a resource

Accepted Answer

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

Question 8

Voters typically are have information only about issues that have a perceptible effect on their well-being and tend not to have information about other issues.Behavior such as this is known as

Accepted Answer

A) voter preferences. 
B) inefficient overprovision. 
C) political competition. 
D) rational ignorance. 
E) the tragedy of voters. 
A) voter preferences. 
B) inefficient overprovision. 
C) political competition. 
D) rational ignorance. 
E) the tragedy of voters.

Question 9

What is the tragedy of the commons?

Accepted Answer

The tragedy of the commons is the absenc

Question 10

-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers , $300 per hour.The marginal social cost is twice the marginal private cost.The efficient quantity of fish caught is ________ tons.

Accepted Answer

A) 100 
B) 200 
C) 300 
D) 400 
E) 500 
A) 100 
B) 200 
C) 300 
D) 400 
E) 500

Question 11

If we know everyone's individual marginal benefit curve for a public good, then the economy's marginal benefit curve for that public good can be found by

Accepted Answer

A) finding the average of everyone's marginal benefit. 
B) summing horizontally the amount of everyone's marginal benefit. 
C) summing vertically the amount of everyone's marginal benefit. 
D) averaging either horizontally or vertically the amount of everyone's marginal benefit. 
E) none of the above; it is impossible to find this value. 
A) finding the average of everyone's marginal benefit. 
B) summing horizontally the amount of everyone's marginal benefit. 
C) summing vertically the amount of everyone's marginal benefit. 
D) averaging either horizontally or vertically the amount of everyone's marginal benefit. 
E) none of the above; it is impossible to find this value.

Question 12

The efficient quantity of a public good is

Accepted Answer

A) the quantity produced by private firms. 
B) the quantity at which the marginal benefit equals the marginal cost. 
C) impossible to determine because each person's marginal benefit is different. 
D) the quantity at which the marginal benefit exceeds the marginal cost by as much as possible. 
E) the quantity determined by the intersection of the demand curve and the supply curve. 
A) the quantity produced by private firms. 
B) the quantity at which the marginal benefit equals the marginal cost. 
C) impossible to determine because each person's marginal benefit is different. 
D) the quantity at which the marginal benefit exceeds the marginal cost by as much as possible. 
E) the quantity determined by the intersection of the demand curve and the supply curve.

Question 13

A good is rival if

Accepted Answer

A) it has substitutes. 
B) it can be consumed by many people simultaneously. 
C) it is excludable. 
D) consumption by one person decreases the quantity available for another person. 
E) it has no complements. 
A) it has substitutes. 
B) it can be consumed by many people simultaneously. 
C) it is excludable. 
D) consumption by one person decreases the quantity available for another person. 
E) it has no complements.

Question 14

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 15

A good is nonexcludable if

Accepted Answer

A) only the government can produce it. 
B) nobody can be excluded from enjoying the benefits of the good. 
C) when you pay for the good, you are guaranteed to be the sole consumer. 
D) when you consume a unit, that means there is no less for someone else. 
E) it is also nonrival. 
A) only the government can produce it. 
B) nobody can be excluded from enjoying the benefits of the good. 
C) when you pay for the good, you are guaranteed to be the sole consumer. 
D) when you consume a unit, that means there is no less for someone else. 
E) it is also nonrival.

Question 16

-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.A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________.

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 17

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 18

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 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

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The market equilibrium with no government intervention is ________.

Accepted Answer

A) 0 tons per week 
B) 200 tons per week 
C) 400 tons per week 
D) 500 tons per week 
E) None of the above answers is correct. 
A) 0 tons per week 
B) 200 tons per week 
C) 400 tons per week 
D) 500 tons per week 
E) None of the above answers is correct.

________ is the decision not to acquire information because the marginal cost of doing so exceeds the marginal benefit.

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

One way to overcome the tragedy of the commons is to

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

The government can be large in size because of

Which of the following can be rival and excludable? i. a good ii. a service iii. a resource

Voters typically are have information only about issues that have a perceptible effect on their well-being and tend not to have information about other issues.Behavior such as this is known as

What is the tragedy of the commons?

-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers , $300 per hour.The marginal social cost is twice the marginal private cost.The efficient quantity of fish caught is ________ tons.

If we know everyone's individual marginal benefit curve for a public good, then the economy's marginal benefit curve for that public good can be found by

The efficient quantity of a public good is

A good is rival if

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

A good is nonexcludable if

-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.A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________.

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

The free-rider problem applies

The free-rider problem for a public good means that

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The market equilibrium with no government intervention is ________.

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

________ is the decision not to acquire information because the marginal cost of doing so exceeds the marginal benefit.

A basketball game aired as a pay-per-view show by your local cable network and to which you can invite your friends to watch is a ________ good.

One way to overcome the tragedy of the commons is to

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

The government can be large in size because of

Which of the following can be rival and excludable? i. a good ii. a service iii. a resource

Voters typically are have information only about issues that have a perceptible effect on their well-being and tend not to have information about other issues.Behavior such as this is known as

What is the tragedy of the commons?

-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers , $300 per hour.The marginal social cost is twice the marginal private cost.The efficient quantity of fish caught is ________ tons.

If we know everyone's individual marginal benefit curve for a public good, then the economy's marginal benefit curve for that public good can be found by

The efficient quantity of a public good is

A good is rival if

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

A good is nonexcludable if

-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.A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________.

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

The free-rider problem applies

The free-rider problem for a public good means that

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The market equilibrium with no government intervention is ________.

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.