Exam 11: Public Goods and Common Resources

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The idea that "externalities arise because something of value has no price attached to it" is associated with

The idea of requiring motorists to pay to use the busiest streets in a city

The ocean remains one of the largest unregulated resources for each of the following reasons except

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 $900 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Black's like the town to install?

The government often intervenes when private markets fail to provide an optimal level of certain goods and services. For example, the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another. Why might the private market not reach the socially optimal level of traffic without the help of government?

A lighthouse is typically considered to be a public good because

Which of the following statements is not correct?

Markets may fail to allocate resources efficiently when property rights are not well established.

Figure 11-1 -Refer to Figure 11-1. A tornado siren in a small town is an example of the type of good represented by Box

Because of the free-rider problem,

Table 11-1 Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident's willingness to pay for each acre of the park. -Refer to Table 11-1. Suppose the cost to build the park is $9 per acre. How large should the park be to maximize total surplus from the park in Springfield?

One way to eliminate the Tragedy of the Commons is to

For private goods allocated in markets,

Some goods can be either common resources or public goods depending on

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 $360. How many streetlights should the town install to maximize total surplus from the streetlights?

Scenario 11-2 Consider the following goods: -fire-protection services provided by a fire department -a beautiful mural on the outside wall of a fire station -a firefighter's helmet -Refer to Scenario 11-2. Which of these goods is the best example of a club good? Briefly explain.

Which of the following is not a way for the government to solve the problem of excessive use of common resources?

One of the least regulated common resources today is

Which of the following goods is rival in consumption and excludable?