Question 1

When a good is both rivalrous and nonexcludable the:

Accepted Answer

A)  free rider problem may arise. 
B)  tragedy of the commons may arise. 
C)  good is likely a private good. 
D)  good is likely an artificially scarce good. 
A)  free rider problem may arise. 
B)  tragedy of the commons may arise. 
C)  good is likely a private good. 
D)  good is likely an artificially scarce good.

Question 2

An example of a good that is not excludable is:

Accepted Answer

A)  fish in the ocean. 
B)  wireless connection to the Internet. 
C)  a movie in a theater. 
D)  a candy bar. 
A)  fish in the ocean. 
B)  wireless connection to the Internet. 
C)  a movie in a theater. 
D)  a candy bar.

Question 3

An example of a public good that is difficult to make excludable is:

Accepted Answer

A)  sewer systems. 
B)  fire protection. 
C)  national defense. 
D)  All of these are nonexcludable public goods. 
A)  sewer systems. 
B)  fire protection. 
C)  national defense. 
D)  All of these are nonexcludable public goods.

Question 4

Which of the following is likely to cause a market failure and be over consumed?

Accepted Answer

A)  Cable TV 
B)  Grazing pastureland 
C)  Public health 
D)  Education 
A)  Cable TV 
B)  Grazing pastureland 
C)  Public health 
D)  Education

Question 5

One "design principle" that makes informal,community-based solutions to public goods and common resource problems more effective is:

Accepted Answer

A)  the government setting clear rules for use. 
B)  individual pledges to self-monitor their actions. 
C)  clear distinctions between who is and is not allowed to access the resource. 
D)  All of these are important to the effectiveness of community-based solutions. 
A)  the government setting clear rules for use. 
B)  individual pledges to self-monitor their actions. 
C)  clear distinctions between who is and is not allowed to access the resource. 
D)  All of these are important to the effectiveness of community-based solutions.

Question 6

Government intervention can be productive and efficiency enhancing:

Accepted Answer

A)  whenever it regulates a market. 
B)  in markets for public goods and common resources. 
C)  because the government always acts with altruistic motives. 
D)  except in markets for public goods. 
A)  whenever it regulates a market. 
B)  in markets for public goods and common resources. 
C)  because the government always acts with altruistic motives. 
D)  except in markets for public goods.

Question 7

Social disapproval carries a higher cost in all of the following cases except when you:

Accepted Answer

A)  know the people around you. 
B)  care about the opinions of people around you. 
C)  expect to interact with the people around you again in the future. 
D)  have very loose interactions with community members. 
A)  know the people around you. 
B)  care about the opinions of people around you. 
C)  expect to interact with the people around you again in the future. 
D)  have very loose interactions with community members.

Question 8

One of the difficulties of the government privatizing a common resource is:

Accepted Answer

A)  figuring out who owns what when many are using the resource. 
B)  deciding which individuals will have to decrease their consumption. 
C)  compounded the more users there are. 
D)  All of these statements are true. 
A)  figuring out who owns what when many are using the resource. 
B)  deciding which individuals will have to decrease their consumption. 
C)  compounded the more users there are. 
D)  All of these statements are true.

Question 9

When a good is excludable:

Accepted Answer

A)  one person's consumption prevents or decreases others' ability to consume it. 
B)  it is possible for sellers to prevent its use by those who have not paid for it. 
C)  consumers have a perception of scarcity of that good. 
D)  the government has specific import policies limiting its supply. 
A)  one person's consumption prevents or decreases others' ability to consume it. 
B)  it is possible for sellers to prevent its use by those who have not paid for it. 
C)  consumers have a perception of scarcity of that good. 
D)  the government has specific import policies limiting its supply.

Question 10

If the punishment is _________,or the likelihood of getting caught is _________,the cost associated with breaking a ban may not be high enough to change the trade-off that consumers face.

Accepted Answer

A)  not severe; low 
B)  severe; high 
C)  severe; low 
D)  not severe; high 
A)  not severe; low 
B)  severe; high 
C)  severe; low 
D)  not severe; high

Question 11

The tragedy of the commons is the:

Accepted Answer

A)  undersupply of a public good due to people not wanting to pay for a publicly common good. 
B)  disappearance of certain markets due to the lack of willingness to pay by individuals, leading to collective misfortune. 
C)  depletion of a common resource due to individually rational but collectively inefficient overconsumption. 
D)  notion that common resources are generally under consumed and therefore not produced by suppliers due to artificially low demand. 
A)  undersupply of a public good due to people not wanting to pay for a publicly common good. 
B)  disappearance of certain markets due to the lack of willingness to pay by individuals, leading to collective misfortune. 
C)  depletion of a common resource due to individually rational but collectively inefficient overconsumption. 
D)  notion that common resources are generally under consumed and therefore not produced by suppliers due to artificially low demand.

Question 12

The depletion of a common resource due to individually rational but collectively inefficient overconsumption is called:

Accepted Answer

A)  the free rider problem. 
B)  the tragedy of the commons. 
C)  rival in consumption. 
D)  excludability. 
A)  the free rider problem. 
B)  the tragedy of the commons. 
C)  rival in consumption. 
D)  excludability.

Question 13

The combination of inefficiently high demand and dwindling quantity leads to what is called:

Accepted Answer

A)  the free rider problem. 
B)  nonexcludable consumption. 
C)  rival in consumption. 
D)  the tragedy of the commons. 
A)  the free rider problem. 
B)  nonexcludable consumption. 
C)  rival in consumption. 
D)  the tragedy of the commons.

Question 14

An artificially scarce good is:

Accepted Answer

A)  rival in consumption and excludable. 
B)  not rival in consumption, but excludable. 
C)  rival in consumption, but not excludable. 
D)  not rival in consumption and not excludable. 
A)  rival in consumption and excludable. 
B)  not rival in consumption, but excludable. 
C)  rival in consumption, but not excludable. 
D)  not rival in consumption and not excludable.

Question 15

When we consider solving a free rider problem through changing social norms,it is helpful to remember:

Accepted Answer

A)  all costs aren't financial. 
B)  social disapproval can be considered a cost. 
C)  conflict with those in your community can be considered a cost. 
D)  All of these statements are true. 
A)  all costs aren't financial. 
B)  social disapproval can be considered a cost. 
C)  conflict with those in your community can be considered a cost. 
D)  All of these statements are true.

Question 16

An example of a good that is not rival in consumption is:

Accepted Answer

A)  a sports car. 
B)  a paper clip. 
C)  bottled water. 
D)  electricity. 
A)  a sports car. 
B)  a paper clip. 
C)  bottled water. 
D)  electricity.

Question 17

The free rider problem is triggered when a good is ______________,and the tragedy of the commons arises when a good is ________________

Accepted Answer

A)  nonexcludable; both rivalrous and nonexcludable. 
B)  rivalrous; both rivalrous and nonexcludable. 
C)  both rivalrous and nonexcludable; rivalrous. 
D)  both rivalrous and nonexcludable; excludable. 
A)  nonexcludable; both rivalrous and nonexcludable. 
B)  rivalrous; both rivalrous and nonexcludable. 
C)  both rivalrous and nonexcludable; rivalrous. 
D)  both rivalrous and nonexcludable; excludable.

Question 18

When choosing the right amount of a public good to supply,the government often:

Accepted Answer

A)  guesses, because people have an incentive to overstate a good's value. 
B)  provides too much, because people have an incentive to understate a good's value. 
C)  provides too little, because people have an incentive to overstate a good's value. 
D)  fails to provide it, because people have an incentive to understate a good's value. 
A)  guesses, because people have an incentive to overstate a good's value. 
B)  provides too much, because people have an incentive to understate a good's value. 
C)  provides too little, because people have an incentive to overstate a good's value. 
D)  fails to provide it, because people have an incentive to understate a good's value.

Question 19

When a good ends up over consumed and depleted,we can assume it is a:

Accepted Answer

A)  common resource. 
B)  private good. 
C)  public good. 
D)  scarce good. 
A)  common resource. 
B)  private good. 
C)  public good. 
D)  scarce good.

Question 20

Elinor Ostrom won the 2009 Nobel Prize in economics for her research showing:

Accepted Answer

A)  social norms can sometimes be powerful enough for commonly held property to be managed extremely well. 
B)  social norms are not an effective solution for the management of commonly held property. 
C)  that privatization of public goods is the most effective solution to market failure associated with commonly held property. 
D)  government provision of public goods is the most efficient solution to the tragedy of the commons problem. 
A)  social norms can sometimes be powerful enough for commonly held property to be managed extremely well. 
B)  social norms are not an effective solution for the management of commonly held property. 
C)  that privatization of public goods is the most effective solution to market failure associated with commonly held property. 
D)  government provision of public goods is the most efficient solution to the tragedy of the commons problem.

Exam 19: Public Goods and Common Resources

When a good is both rivalrous and nonexcludable the:

An example of a good that is not excludable is:

An example of a public good that is difficult to make excludable is:

Which of the following is likely to cause a market failure and be over consumed?

One "design principle" that makes informal,community-based solutions to public goods and common resource problems more effective is:

Government intervention can be productive and efficiency enhancing:

Social disapproval carries a higher cost in all of the following cases except when you:

One of the difficulties of the government privatizing a common resource is:

When a good is excludable:

If the punishment is _________,or the likelihood of getting caught is _________,the cost associated with breaking a ban may not be high enough to change the trade-off that consumers face.

The tragedy of the commons is the:

The depletion of a common resource due to individually rational but collectively inefficient overconsumption is called:

The combination of inefficiently high demand and dwindling quantity leads to what is called:

An artificially scarce good is:

When we consider solving a free rider problem through changing social norms,it is helpful to remember:

An example of a good that is not rival in consumption is:

The free rider problem is triggered when a good is ______________,and the tragedy of the commons arises when a good is ________________

When choosing the right amount of a public good to supply,the government often:

When a good ends up over consumed and depleted,we can assume it is a:

Elinor Ostrom won the 2009 Nobel Prize in economics for her research showing:

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention Microeconomics

Consumer Behavior

Behavioral Economics: A Closer Look at Decision Making

Game Theory and Strategic Thinking

Information

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Factors of Production

International Trade

Externalities

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

Filters

If the punishment is _,or the likelihood of getting caught is _,the cost associated with breaking a ban may not be high enough to change the trade-off that consumers face.

The free rider problem is triggered when a good is ,and the tragedy of the commons arises when a good is __