Question 1

If roads become so crowded that people have to drive more slowly, the road has become a public good.

Accepted Answer

A) True 
 B)False  False

Question 2

It is common knowledge that many national parks have become overused. One possible solution to this problem is to:

Accepted Answer

A)  increase entrance fees 
B)  conduct a study to determine the carrying capacity of the individual parks 
C)  reduce the national park service budget 
D)  All of the above are possible solutions 
A)  increase entrance fees 
B)  conduct a study to determine the carrying capacity of the individual parks 
C)  reduce the national park service budget 
D)  All of the above are possible solutions A

Question 3

The ocean remains one of the largest unregulated resources because:

Accepted Answer

A)  many countries have access to the ocean 
B)  it is difficult to get international cooperation among countries that hold different values 
C)  the oceans are so vast that enforcing any agreements would be difficult 
D)  all of the above are true 
A)  many countries have access to the ocean 
B)  it is difficult to get international cooperation among countries that hold different values 
C)  the oceans are so vast that enforcing any agreements would be difficult 
D)  all of the above are true D

Question 4

The efficient provision of public goods is difficult because:

Accepted Answer

A)  governments can't directly observe users' willingness to pay for the good 
B)  some users may exaggerate the benefits in a questionnaire 
C)  information on costs is poor because prices aren't directly observed 
D)  all of the above 
A)  governments can't directly observe users' willingness to pay for the good 
B)  some users may exaggerate the benefits in a questionnaire 
C)  information on costs is poor because prices aren't directly observed 
D)  all of the above

Question 5

Many species of animals are common resources and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species, even though there is such a high demand for beef?

Accepted Answer

A)  cows reproduce at a high rate and have adapted well to their environment 
B)  public policies have been implemented to protect cows from predators and diseases 
C)  cows are privately owned and many endangered species are owned by no-one 
D)  there is a natural ecological balance between the birth rate of cows and human consumption 
A)  cows reproduce at a high rate and have adapted well to their environment 
B)  public policies have been implemented to protect cows from predators and diseases 
C)  cows are privately owned and many endangered species are owned by no-one 
D)  there is a natural ecological balance between the birth rate of cows and human consumption

Question 6

The Australian patent system:

Accepted Answer

A)  makes both general and technical knowledge excludable 
B)  makes only technical knowledge excludable 
C)  creates a disincentive to invent 
D)  does all of the above 
A)  makes both general and technical knowledge excludable 
B)  makes only technical knowledge excludable 
C)  creates a disincentive to invent 
D)  does all of the above

Question 7

Clean air and clean water are both public goods.

Accepted Answer

A) True 
 B)False

Question 8

If tuna fish are an oceanic common resource then:

Accepted Answer

A)  preventing over-harvest won't need international cooperation 
B)  fishers will try to limit their catches without government regulations 
C)  enforcing agreements to limit fishing will be difficult 
D)  all of the above 
A)  preventing over-harvest won't need international cooperation 
B)  fishers will try to limit their catches without government regulations 
C)  enforcing agreements to limit fishing will be difficult 
D)  all of the above

Question 9

A New Zealand private nature reserve that holds deers for tourism and hunting, has converted a common resource into a private good.

Accepted Answer

A) True 
 B)False

Question 10

Economists can get some sense about what value people put on their own lives by:

Accepted Answer

A)  evaluating their total asset portfolio 
B)  studying the risk they are willing to take in their investment decisions 
C)  comparing wages in risky and less risky occupations, controlling for other determinants of wages 
D)  None of the above will lead to sensible results 
A)  evaluating their total asset portfolio 
B)  studying the risk they are willing to take in their investment decisions 
C)  comparing wages in risky and less risky occupations, controlling for other determinants of wages 
D)  None of the above will lead to sensible results

Question 11

An ineffective way to reduce congestion on roads is to charge higher tolls when the roads are heavily travelled.

Accepted Answer

A) True 
 B)False

Question 12

Private markets usually fail to provide lighthouses because:

Accepted Answer

A)  lighthouses cost too much to build, relative to their benefits 
B)  government intervention makes it hard for private lighthouse owners to compete in the market 
C)  ship captains have incentives to use lighthouses without paying 
D)  lighthouses are valued very little by ship captains these days 
A)  lighthouses cost too much to build, relative to their benefits 
B)  government intervention makes it hard for private lighthouse owners to compete in the market 
C)  ship captains have incentives to use lighthouses without paying 
D)  lighthouses are valued very little by ship captains these days

Question 13

Many special interest groups assert that the environment should be protected irrespective of the cost. This would imply that the environment is priceless - it has infinite value. If this is true, which of the following policies would be passed by a cost-benefit analysis?

Accepted Answer

A)  banning international transport by sea to protect endangered whales from fatal ship-collisions 
B)  banning fishing to prevent turtles or dolphins being caught as by-catch 
C)  banning wind-power plants to prevent rare birds getting killed in the blades 
D)  all of the above 
A)  banning international transport by sea to protect endangered whales from fatal ship-collisions 
B)  banning fishing to prevent turtles or dolphins being caught as by-catch 
C)  banning wind-power plants to prevent rare birds getting killed in the blades 
D)  all of the above

Question 14

Goods that are non-excludable and rival are:

Accepted Answer

A)  public goods 
B)  private goods 
C)  natural monopolies 
D)  common resources 
A)  public goods 
B)  private goods 
C)  natural monopolies 
D)  common resources

Question 15

Raising the living standards of the poor is a public good if people are not concerned about poverty.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is true?

Accepted Answer

A)  no single individual can eliminate poverty because the problem is so large 
B)  private charities use taxes to escape the free-rider problem 
C)  there would be no poverty problem if it was left up to private charity 
D)  everyone agrees on what role the government should play in fighting poverty 
A)  no single individual can eliminate poverty because the problem is so large 
B)  private charities use taxes to escape the free-rider problem 
C)  there would be no poverty problem if it was left up to private charity 
D)  everyone agrees on what role the government should play in fighting poverty

Question 17

What characteristics do public goods and common resources have in common?

Accepted Answer

A)  both types of good are non-rival 
B)  both types of good are excludable 
C)  both types of good are rival 
D)  both types of good are non-excludable 
A)  both types of good are non-rival 
B)  both types of good are excludable 
C)  both types of good are rival 
D)  both types of good are non-excludable

Question 18

Elephant populations in some African countries have started to rise because:

Accepted Answer

A)  people no longer want to buy ivory 
B)  some African countries allow people to manage elephants on their own land and allow hunting to sustain herd sizes 
C)  poachers no longer want to hunt elephants 
D)  some African countries have shot all their poachers 
A)  people no longer want to buy ivory 
B)  some African countries allow people to manage elephants on their own land and allow hunting to sustain herd sizes 
C)  poachers no longer want to hunt elephants 
D)  some African countries have shot all their poachers

Question 19

What combination of policies has the Singapore Government used to reduce road congestion and pollution? Why wouldn't this reduction in road congestion occur without government intervention?

Accepted Answer

Singapore limits the number of cars on t

Question 20

If an entrepreneur provides a service that people enjoy without paying for but can be excluded from the service, these people are known as free-riders.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

If roads become so crowded that people have to drive more slowly, the road has become a public good.

It is common knowledge that many national parks have become overused. One possible solution to this problem is to:

The ocean remains one of the largest unregulated resources because:

The efficient provision of public goods is difficult because:

Many species of animals are common resources and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species, even though there is such a high demand for beef?

The Australian patent system:

Clean air and clean water are both public goods.

If tuna fish are an oceanic common resource then:

A New Zealand private nature reserve that holds deers for tourism and hunting, has converted a common resource into a private good.

Economists can get some sense about what value people put on their own lives by:

An ineffective way to reduce congestion on roads is to charge higher tolls when the roads are heavily travelled.

Private markets usually fail to provide lighthouses because:

Many special interest groups assert that the environment should be protected irrespective of the cost. This would imply that the environment is priceless - it has infinite value. If this is true, which of the following policies would be passed by a cost-benefit analysis?

Goods that are non-excludable and rival are:

Raising the living standards of the poor is a public good if people are not concerned about poverty.

Which of the following statements is true?

What characteristics do public goods and common resources have in common?

Elephant populations in some African countries have started to rise because:

What combination of policies has the Singapore Government used to reduce road congestion and pollution? Why wouldn't this reduction in road congestion occur without government intervention?

If an entrepreneur provides a service that people enjoy without paying for but can be excluded from the service, these people are known as free-riders.

Ten Lessons From Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand and Government Policies

Consumers, Producers and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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