Exam 11: Public Goods and Common Resources

-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.If the city of Hugo hires 25 officers, then

Which of the following is NOT a potential solution to the tragedy of the commons?

Which of the following applies to the tragedy of the commons and a common resource? I∙In the absence of government action, there are no incentives to prevent the overuse of the common resource. Ii∙When consumers take account of the marginal social benefit and marginal cost, overuse of the common resource occurs. Iii∙Even with government action, it is impossible to achieve the efficient level of use of a common resource.

-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 efficient outcome is raising ________.

What is rational ignorance?

For a common resource, it is the case that

-The table above provides information about the marginal cost and marginal benefit of streetlights, which are a public good. a∙What quantity would a private company provide? Why? b∙What is the efficient quantity?

Which of the following describes the principle of minimum differentiation?

How does the government determine the quota amount that will produce an efficient use of a common resource?

Because national defense is potentially subject to free riding, a private sector market for national defense would lead to

To hunters, deer in the woods are an example of a

If a good or resource is rival, it could be a

For any individual consumer, free-riding is

If the two political parties propose similar or identical policies, they are following the principle of

For a common resource, efficiency requires that the ________ equals the ________.

To achieve the efficient amount of use of a common resource, the use should be such that ________ equals ________.

Which of the following goods is excludable and nonrival?

What is the free-rider problem and with what is it associated?

The efficient quantity of a public good can't be produced by private firms because

Suppose the government is producing a public good.If the marginal benefit of the last unit of a public good produced is greater than the marginal cost of that unit, to achieve the efficient amount of production, what should be done?