Question 1

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Accepted Answer

The free-rider problem occurs when peopl

Question 2

Protection of rivers in Idaho is a public good.If the marginal cost of protecting rivers in Idaho exceeds the marginal benefit of river protection, is there more than, less than, or the efficient amount of river protection taking place?

Accepted Answer

If the marginal cost exceeds the margina

Question 3

Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?

Accepted Answer

The sailboat is a private good.The sailb

Question 4

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 5

An office in the Empire State Building is

Accepted Answer

A) a private good. 
B) nonexcludable, because it is possible to restrict access to it. 
C) a common resource. 
D) a public good because many people can be in the Empire State Building. 
E) excludable and nonrival. 
A) a private good. 
B) nonexcludable, because it is possible to restrict access to it. 
C) a common resource. 
D) a public good because many people can be in the Empire State Building. 
E) excludable and nonrival.

Question 6

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 7

A government policy that can lead to the efficient use of a common resource is

Accepted Answer

A) a tax. 
B) a production quota. 
C) an emission fee. 
D) a price ceiling. 
E) None of the above answers are correct. 
A) a tax. 
B) a production quota. 
C) an emission fee. 
D) a price ceiling. 
E) None of the above answers are correct.

Question 8

A natural monopoly, such as the Internet, is

Accepted Answer

A) nonrival and excludable. 
B) rival and excludable. 
C) nonrival and nonexcludable. 
D) rival and nonexcludable. 
E) None of the above answers are correct. 
A) nonrival and excludable. 
B) rival and excludable. 
C) nonrival and nonexcludable. 
D) rival and nonexcludable. 
E) None of the above answers are correct.

Question 9

You are studying with a friend and your friend says, "private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?

Accepted Answer

No, private goods are excludable and riv

Question 10

Competition in the political marketplace can result in the efficient provision of a public good if

Accepted Answer

A) there is only one political party. 
B) voters' preferences are unknown. 
C) benefits are small. 
D) voters are well informed and evaluate the alternatives. 
E) politicians need to be elected by majority votes. 
A) there is only one political party. 
B) voters' preferences are unknown. 
C) benefits are small. 
D) voters are well informed and evaluate the alternatives. 
E) politicians need to be elected by majority votes.

Question 11

-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.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture, the farmer raises ________.

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 12

Public goods create a free-rider problem because

Accepted Answer

A) only people who pay for the good or service can enjoy the good or service. 
B) people do not want to consume public goods. 
C) the good or service is rival in nature. 
D) the good or service is excludable. 
E) people can enjoy the good or service no matter whether or not they pay for it. 
A) only people who pay for the good or service can enjoy the good or service. 
B) people do not want to consume public goods. 
C) the good or service is rival in nature. 
D) the good or service is excludable. 
E) people can enjoy the good or service no matter whether or not they pay for it.

Question 13

In politics, the principle of minimum differentiation is the tendency toward

Accepted Answer

A) identical policies to appeal to a minimum number of people. 
B) different policies to appeal to a maximum number of people. 
C) identical policies to appeal to a maximum number of people. 
D) different policies to appeal to a minimum number of people. 
E) a minimum number of policies in order to appeal to a maximum number of people. 
A) identical policies to appeal to a minimum number of people. 
B) different policies to appeal to a maximum number of people. 
C) identical policies to appeal to a maximum number of people. 
D) different policies to appeal to a minimum number of people. 
E) a minimum number of policies in order to appeal to a maximum number of people.

Question 14

The concept of rational ignorance is defined as

Accepted Answer

A) the decision not to acquire knowledge because of high marginal cost. 
B) the deceit by bureaucrats who fool politicians in order to maximize their budgets. 
C) politicians not telling the voters the real truth to stay in office. 
D) voters being kept from knowing the facts by bureaucrats. 
E) bureaucrats not knowing the size of their budget. 
A) the decision not to acquire knowledge because of high marginal cost. 
B) the deceit by bureaucrats who fool politicians in order to maximize their budgets. 
C) politicians not telling the voters the real truth to stay in office. 
D) voters being kept from knowing the facts by bureaucrats. 
E) bureaucrats not knowing the size of their budget.

Question 15

As more of a public good is produced, the marginal benefit of each additional unit ________ and as more of a private good is produced, the marginal benefit of each additional unit ________.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change

Question 16

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 17

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

Accepted Answer

A) 0 tons per week 
B) 200 tons per week 
C) 400 tons per week 
D) 300 tons per week 
E) 500 tons per week 
A) 0 tons per week 
B) 200 tons per week 
C) 400 tons per week 
D) 300 tons per week 
E) 500 tons per week

Question 18

The marginal benefit of a public good ________ as more of the good is produced.

Accepted Answer

A) increases 
B) decreases 
C) stays the same 
D) None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether the marginal cost increases, decreases, or does not change as more is produced. 
E) None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether more, fewer, or the same number of people consume the good as more is produced. 
A) increases 
B) decreases 
C) stays the same 
D) None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether the marginal cost increases, decreases, or does not change as more is produced. 
E) None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether more, fewer, or the same number of people consume the good as more is produced.

Question 19

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference, why is there a difference? If there is not a difference, why is there not a difference?

Accepted Answer

The marginal social cost curve of a comm

Question 20

-The table above shows Anita and Steve's marginal benefits for the annual 4ᵗʰ of July fireworks show at City Park.If Anita and Steve are the only two people in the economy, what is the economy's marginal benefit from the 18ᵗʰ minute of fireworks?

Accepted Answer

A) $38 
B) $33 
C) $30 
D) $162 
E) $129 
A) $38 
B) $33 
C) $30 
D) $162 
E) $129

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Protection of rivers in Idaho is a public good.If the marginal cost of protecting rivers in Idaho exceeds the marginal benefit of river protection, is there more than, less than, or the efficient amount of river protection taking place?

Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?

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

An office in the Empire State Building is

Marginal cost curves for public goods are usually

A government policy that can lead to the efficient use of a common resource is

A natural monopoly, such as the Internet, is

You are studying with a friend and your friend says, "private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?

Competition in the political marketplace can result in the efficient provision of a public good 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.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture, the farmer raises ________.

Public goods create a free-rider problem because

In politics, the principle of minimum differentiation is the tendency toward

The concept of rational ignorance is defined as

As more of a public good is produced, the marginal benefit of each additional unit and as more of a private good is produced, the marginal benefit of each additional unit .

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 above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

The marginal benefit of a public good ________ as more of the good is produced.

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference, why is there a difference? If there is not a difference, why is there not a difference?

-The table above shows Anita and Steve's marginal benefits for the annual 4ᵗʰ of July fireworks show at City Park.If Anita and Steve are the only two people in the economy, what is the economy's marginal benefit from the 18ᵗʰ minute of fireworks?

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

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Protection of rivers in Idaho is a public good.If the marginal cost of protecting rivers in Idaho exceeds the marginal benefit of river protection, is there more than, less than, or the efficient amount of river protection taking place?

Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?

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

An office in the Empire State Building is

Marginal cost curves for public goods are usually

A government policy that can lead to the efficient use of a common resource is

A natural monopoly, such as the Internet, is

You are studying with a friend and your friend says, "private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?

Competition in the political marketplace can result in the efficient provision of a public good 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.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture, the farmer raises ________.

Public goods create a free-rider problem because

In politics, the principle of minimum differentiation is the tendency toward

The concept of rational ignorance is defined as

As more of a public good is produced, the marginal benefit of each additional unit ________ and as more of a private good is produced, the marginal benefit of each additional unit ________.

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 above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

The marginal benefit of a public good ________ as more of the good is produced.

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference, why is there a difference? If there is not a difference, why is there not a difference?

-The table above shows Anita and Steve's marginal benefits for the annual 4ᵗʰ of July fireworks show at City Park.If Anita and Steve are the only two people in the economy, what is the economy's marginal benefit from the 18ᵗʰ minute of fireworks?

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

As more of a public good is produced, the marginal benefit of each additional unit and as more of a private good is produced, the marginal benefit of each additional unit .