Exam 11: Public Goods and Common Resources

For a common resource such as fish, the marginal private benefit ________ the marginal social benefit and the marginal private cost ________ the marginal social cost.

Which of the following is true? I∙A common resource is a resource that is nonrival and nonexcludable. Ii∙Issuing individual transferable quotas (ITQ)means that for users of common resources, the marginal cost plus the price of the ITQ equals the marginal social cost. Iii∙In an unregulated market, a common resource is used to the point at which marginal private benefit equals marginal cost.

-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.The market equilibrium with no government intervention is raising ________.

We determine the economy's marginal benefit curve for a public good or service by

A good or resource is excludable if

A common resource is

Rational ignorance is the decision NOT to

A mother notices that when she divides brownies equally between her two children and gives each child her share on a separate plate, the brownies last a long time.But when she gives her children a plate to share, the brownies are gone pretty quickly.The mother concludes from this that brownies given on a single plate are

What is an individual transferable quota (ITQ)?

How is the efficient quantity of public goods determined?

-Ten homeowners live around Lake Alice.Unfortunately, the lake is contaminated with various chemicals and the level of contamination is currently 20 parts per million.All the homeowners benefit equally if the level of contamination is reduced.The table above gives the marginal cost and marginal benefit for removing the contaminants from the lake. a∙What will be the parts per million if the homeowners alone are in charge of reducing the contaminants? b∙What is the efficient amount of contamination?

Which of the following is the best example of a private good?

The figure above shows the marginal benefit curve (MB)and marginal cost curve (MC)of surveillance satellites that provide national defense services. -Suppose that satellites are publicly provided.The voters are rationally ignorant, while the Defense Ministry is well informed.Using the figure above, which of the following quantities of satellites is most likely to be provided?

The tragedy of the commons arises because ________ exceeds ________ when the resource is used.

-The figure above shows the marginal cost and marginal benefit of police protection in the city of Hugo, Oklahoma.Police protection is a public good.The efficient number of officers that should be hired by the city of Hugo is

Fish in the ocean are an example of ________ because they are ________.

-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.If the government sets a production quota, the profit on the last ton of fish caught is ________ per ton.

A common resource is

Which of the following represents an efficient quantity of a public good? The quantity at which the

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of