Exam 11: Public Goods and Common Resources

Under which of the following scenarios would a park be considered a club good?

One solution to the "Tragedy of the Commons" is to turn the common resource into a private good.

A free-rider problem exists for any good that is not

When something of value has no price attached to it,

85 Refer to Table 11-4. Suppose the cost to plant each tree is $220 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s) would be in favor of planting at least 3 trees? a. only Benitez b. only Benitez and Chen c. only Benitez, Chen, and Davis d. Adams, Benitez, Chen, and Davis ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging LEARNING OBJECTIVES: ECON.MANK.15.51 - LO: 11-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Public Economics Public Choice KEYWORDS: BLOOM'S: Application -Refer to Table 11-4. Suppose the cost to plant each tree is $340 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s) would be in favor of planting at least 1 tree?

An example of a private good would be

A streetlight is a

Miguel, Maria, and Marcos all would like a place to sit while waiting at their children's bus stop. The neighborhood association is considering installing several park benches at the bus stop. Miguel values the benches at $20, Maria at $30, and Marcos at $40. The park benches and labor for installation cost $100. If Miguel, Maria, and Marcos are the only residents who value the benches, what should the neighborhood association do?

What do we mean when we say that a good is rival in consumption?

It would always be a mistake to view

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time- share condominium in Alta, Utah. Suppose that the lift lines at the ski resort become more congested when the ten additional people start to ski. Which of the following statements is not correct?

Government policy can potentially raise economic well-being

Some goods can be classified as either public goods or private goods depending on the circumstances.

Who among the following is a free rider?

The enclosure movement in England in the 17th century represented an attempt to transform

Figure 11-1 -Refer to Figure 11-1. The box labeled A represents

Examples of goods that are excludable include

Table 11-4 There are four homes along Belmont Circle, which surrounds a small plot of land. The land currently has no trees, and the 4 homeowners -- Adams, Benitez, Chen, and Davis -- are considering the idea of contributing to a pool of money that will be used to plant up to 4 trees. The table represents their willingness to pay, that is, the maximum amount that each homeowner is willing to contribute toward each tree. -Refer to Table 11-4. Suppose the cost to plant each tree is $120 and the 4 homeowners have agreed to split all tree-planting costs equally. How many trees would Adams prefer to plant?

Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. -Refer to Table 11-2. Suppose the cost to install each streetlight is $600 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Brown's like the town to install?

Figure 11-1 -Refer to Figure 11-1. The box labeled C represents