Question 1

If one thinks that driving privileges should be distributed equally:

Accepted Answer

A)  toll roads could be used as long as each car owner had an equal endowment of money to pay for road tolls 
B)  people with more expensive cars should be charged a higher toll 
C)  there is no solution to the congested road problem 
D)  toll roads would offer no solution to the problem of congested roads 
A)  toll roads could be used as long as each car owner had an equal endowment of money to pay for road tolls 
B)  people with more expensive cars should be charged a higher toll 
C)  there is no solution to the congested road problem 
D)  toll roads would offer no solution to the problem of congested roads

Question 2

One way to eliminate the Tragedy of the Commons is to:

Accepted Answer

A)  increase law enforcement in public areas 
B)  limit access to the commons 
C)  increase access to the commons 
D)  provide more public land for recreation 
A)  increase law enforcement in public areas 
B)  limit access to the commons 
C)  increase access to the commons 
D)  provide more public land for recreation

Question 3

More roads do not solve traffic problems because they encourage people to live farther from work and thus use more road space.

Accepted Answer

A) True 
 B)False

Question 4

Suppose the value of human life is calculated using the economic contribution they make to society. This is measured as their income-earning potential. This would imply:

Accepted Answer

A)  all human life is priceless 
B)  the life of a retired person who works for a charity is worth less than a TV-celebrity 
C)  racing car drivers regard their lives as more valuable than accountants 
D)  everyone is equally valuable 
A)  all human life is priceless 
B)  the life of a retired person who works for a charity is worth less than a TV-celebrity 
C)  racing car drivers regard their lives as more valuable than accountants 
D)  everyone is equally valuable

Question 5

If people choose to buy small cars with less safety features than larger cars, then this shows that these people believe that human life can not be priced.

Accepted Answer

A) True 
 B)False

Question 6

Cost-benefit analysis always fails to include free goods like clean air as benefits.

Accepted Answer

A) True 
 B)False

Question 7

Cost-benefit analysis is important in determining the role of government in our economy because:

Accepted Answer

A)  the government should provide all goods in which benefits exceed costs. 
B)  cost-benefit analysis identifies the possible gains to society from government provision of a particular good 
C)  markets for private goods are not able to effectively assign costs and benefits 
D)  cost-benefit analysis identifies market failure 
A)  the government should provide all goods in which benefits exceed costs. 
B)  cost-benefit analysis identifies the possible gains to society from government provision of a particular good 
C)  markets for private goods are not able to effectively assign costs and benefits 
D)  cost-benefit analysis identifies market failure

Question 8

Once a common resource is available for consumption, policymakers need to be concerned with:

Accepted Answer

A)  making sure everyone gets a fair chance to consume 
B)  how much is consumed 
C)  creating laws that will completely forbid consumption, because the environment is priceless 
D)  none of the above, because common resources are optimally provided in private markets 
A)  making sure everyone gets a fair chance to consume 
B)  how much is consumed 
C)  creating laws that will completely forbid consumption, because the environment is priceless 
D)  none of the above, because common resources are optimally provided in private markets

Question 9

A foot-long cheeseburger, due to its immense size is:

Accepted Answer

A)  non-excludable and rival 
B)  non-excludable and non-rival 
C)  excludable and rival 
D)  excludable and non-rival 
A)  non-excludable and rival 
B)  non-excludable and non-rival 
C)  excludable and rival 
D)  excludable and non-rival

Question 10

If cutting down a native forest causes many rare animals to become extinct, a cost-benefit analysis would still class this as a cost, even if there is no market price for species survival.

Accepted Answer

A) True 
 B)False

Question 11

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Accepted Answer

A)  no other animal has ivory tusks 
B)  elephants are a common resource 
C)  cows are a common resource 
D)  cows are a public good 
A)  no other animal has ivory tusks 
B)  elephants are a common resource 
C)  cows are a common resource 
D)  cows are a public good

Question 12

Residents of Hong Kong are able to find restaurants that advertise a dish that contains grizzly bear paws. Since it is unlikely that grizzly bear paws are purchased from a private producer of animal paws, we can likely conclude that:

Accepted Answer

A)  international laws making it illegal to sell grizzly bear paws are likely to be very effective at eliminating these offerings at Hong Kong restaurants 
B)  penalties for poaching grizzly bears are likely to be very small 
C)  there are likely to be very few grizzly bear poachers 
D)  allowing individuals to own and raise grizzly bears for meat would likely reduce the threat of extinction to grizzly bear populations 
A)  international laws making it illegal to sell grizzly bear paws are likely to be very effective at eliminating these offerings at Hong Kong restaurants 
B)  penalties for poaching grizzly bears are likely to be very small 
C)  there are likely to be very few grizzly bear poachers 
D)  allowing individuals to own and raise grizzly bears for meat would likely reduce the threat of extinction to grizzly bear populations

Question 13

Which of the following suggests that individuals do not place an infinite value on human life?

Accepted Answer

A)  road intersections without stop signs 
B)  cars that are manufactured and purchased without the latest safety features 
C)  skydiving 
D)  all of the above 
A)  road intersections without stop signs 
B)  cars that are manufactured and purchased without the latest safety features 
C)  skydiving 
D)  all of the above

Question 14

A good is excludable if:

Accepted Answer

A)  one person's use of the good diminishes another person's enjoyment of it 
B)  the government regulates its availability 
C)  it is not a normal good 
D)  people can be prevented from using it 
A)  one person's use of the good diminishes another person's enjoyment of it 
B)  the government regulates its availability 
C)  it is not a normal good 
D)  people can be prevented from using it

Question 15

Why do elephants face the threat of extinction while cows do not?

Accepted Answer

A)  cattle are a valuable source of income for many people and elephants have no market value 
B)  there is a high demand for products that come only from the cow 
C)  there are still lots of cattle that roam free, while most elephants are in zoos 
D)  cattle are owned by ranchers, while elephants are owned by no-one 
A)  cattle are a valuable source of income for many people and elephants have no market value 
B)  there is a high demand for products that come only from the cow 
C)  there are still lots of cattle that roam free, while most elephants are in zoos 
D)  cattle are owned by ranchers, while elephants are owned by no-one

Question 16

To reduce the pollution caused by cars in Singapore, the Singapore government:

Accepted Answer

A)  subsidises the price of train tickets 
B)  requires people to buy electric cars 
C)  charges higher tolls on busy inner-city roads 
D)  limits the number of cars by requiring owners to have permits, which are allocated by auctions 
A)  subsidises the price of train tickets 
B)  requires people to buy electric cars 
C)  charges higher tolls on busy inner-city roads 
D)  limits the number of cars by requiring owners to have permits, which are allocated by auctions

Question 17

One of the most pressing concerns associated with the implementation of road congestion pricing policies can be resolved by:

Accepted Answer

A)  only charging tolls to those users who earn above a certain income 
B)  allowing free access to bicyclists and those who use fuel-efficient cars 
C)  employing barcode and debit card technologies to charge users 
D)  only charging tolls to visitors 
A)  only charging tolls to those users who earn above a certain income 
B)  allowing free access to bicyclists and those who use fuel-efficient cars 
C)  employing barcode and debit card technologies to charge users 
D)  only charging tolls to visitors

Question 18

In nearly all cases the government can make everyone better off by raising taxes to pay for certain goods that the market fails to provide.

Accepted Answer

A) True 
 B)False

Question 19

Excessive fishing occurs because:

Accepted Answer

A)  each individual fisherman has little incentive to maintain the species for the next year 
B)  fishermen rely on government managers to worry about fish populations 
C)  fishermen are concerned about the population dynamics of fish biomass, not current harvest rates 
D)  fishermen have other marketable skills and do not fear exploitation of fish reserves 
A)  each individual fisherman has little incentive to maintain the species for the next year 
B)  fishermen rely on government managers to worry about fish populations 
C)  fishermen are concerned about the population dynamics of fish biomass, not current harvest rates 
D)  fishermen have other marketable skills and do not fear exploitation of fish reserves

Question 20

When one person enjoys the benefit of national defence, he reduces the benefit to others.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

If one thinks that driving privileges should be distributed equally:

One way to eliminate the Tragedy of the Commons is to:

More roads do not solve traffic problems because they encourage people to live farther from work and thus use more road space.

Suppose the value of human life is calculated using the economic contribution they make to society. This is measured as their income-earning potential. This would imply:

If people choose to buy small cars with less safety features than larger cars, then this shows that these people believe that human life can not be priced.

Cost-benefit analysis always fails to include free goods like clean air as benefits.

Cost-benefit analysis is important in determining the role of government in our economy because:

Once a common resource is available for consumption, policymakers need to be concerned with:

A foot-long cheeseburger, due to its immense size is:

If cutting down a native forest causes many rare animals to become extinct, a cost-benefit analysis would still class this as a cost, even if there is no market price for species survival.

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Residents of Hong Kong are able to find restaurants that advertise a dish that contains grizzly bear paws. Since it is unlikely that grizzly bear paws are purchased from a private producer of animal paws, we can likely conclude that:

Which of the following suggests that individuals do not place an infinite value on human life?

A good is excludable if:

Why do elephants face the threat of extinction while cows do not?

To reduce the pollution caused by cars in Singapore, the Singapore government:

One of the most pressing concerns associated with the implementation of road congestion pricing policies can be resolved by:

In nearly all cases the government can make everyone better off by raising taxes to pay for certain goods that the market fails to provide.

Excessive fishing occurs because:

When one person enjoys the benefit of national defence, he reduces the benefit to others.

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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