Question 1

Which of the following quotations illustrates the Tragedy of the Commons?

Accepted Answer

A)  "A bird in the hand is worth two in the bush." 
B)  "The only difference between the rich and other people is that the rich have more money." 
C)  "What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." 
D)  "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head." 
A)  "A bird in the hand is worth two in the bush." 
B)  "The only difference between the rich and other people is that the rich have more money." 
C)  "What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." 
D)  "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head."

Question 2

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?

Accepted Answer

A)  Lobsters are rival but not excludable. 
B)  The lobster population is an example of the tragedy of the commons. 
C)  Reducing the quota on the number of lobsters any fisher can catch would have a protective effect on the lobster population. 
D)  If left unregulated, the lobster population will likely increase. 
A)  Lobsters are rival but not excludable. 
B)  The lobster population is an example of the tragedy of the commons. 
C)  Reducing the quota on the number of lobsters any fisher can catch would have a protective effect on the lobster population. 
D)  If left unregulated, the lobster population will likely increase.

Question 3

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Accepted Answer

A) True 
 B)False

Question 4

A study that compares the costs and benefits to society of providing a public good is called externality analysis.

Accepted Answer

A) True 
 B)False

Question 5

Which two types of goods are rival in consumption?

Accepted Answer

Private goods and co

Question 6

A television broadcast is an example of a good that is

Accepted Answer

A)  private. 
B)  not rival in consumption. 
C)  social. 
D)  normal. 
A)  private. 
B)  not rival in consumption. 
C)  social. 
D)  normal.

Question 7

Scenario 11-1
Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late.
-Refer to Scenario 11-1. Suppose Becky lives in a city with an optional toll lane that assures a drive at the posted speed limit. She leaves her office at 5:00 for her usual 30 minute commute but hears on the radio that if she drives in the non-toll lanes, her commute will take 1 hour due to an accident. Becky should

Accepted Answer

A)  call the daycare and tell them to expect her at 6:00. 
B)  choose to drive in the free-flowing toll lane as long as the toll is less than $10. 
C)  choose to drive in the free-flowing toll lane as long as the toll is less than $30. 
D)  choose to drive an alternate route to try to avoid some of the traffid. 
A)  call the daycare and tell them to expect her at 6:00. 
B)  choose to drive in the free-flowing toll lane as long as the toll is less than $10. 
C)  choose to drive in the free-flowing toll lane as long as the toll is less than $30. 
D)  choose to drive an alternate route to try to avoid some of the traffid.

Question 8

Why has the value of ivory threatened the extinction of the elephant, whereas the value of beef has enhanced the survival of the cow?

Accepted Answer

A)  Cows are a common resource, whereas elephants are owned by governments. 
B)  Elephants are larger than cows, requiring more economic resources. 
C)  Elephants live in Africa, where economic resources are scarce. 
D)  Elephants are a common resource, whereas cows are privately owned. 
A)  Cows are a common resource, whereas elephants are owned by governments. 
B)  Elephants are larger than cows, requiring more economic resources. 
C)  Elephants live in Africa, where economic resources are scarce. 
D)  Elephants are a common resource, whereas cows are privately owned.

Question 9

Which of the following is an approach used by economists to calculate the value of a human life?

Accepted Answer

A)  comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights 
B)  comparing the wages of more risky occupations to less risky occupations 
C)  comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features 
D)  All of the above are correct. 
A)  comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights 
B)  comparing the wages of more risky occupations to less risky occupations 
C)  comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features 
D)  All of the above are correct.

Question 10

When property rights are not well established,

Accepted Answer

A)  private goods become public goods. 
B)  markets fail to allocate resources efficiently. 
C)  the distribution of private goods is unfair. 
D)  government resources are used inefficiently. 
A)  private goods become public goods. 
B)  markets fail to allocate resources efficiently. 
C)  the distribution of private goods is unfair. 
D)  government resources are used inefficiently.

Question 11

Knowledge is an example of a

Accepted Answer

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

Question 12

A cheeseburger is a

Accepted Answer

A)  common resource, because it is rival in consumption but not excludable. 
B)  public good, because it is rival in consumption but not excludable. 
C)  public good, because it is excludable and rival in consumption. 
D)  private good, because it is excludable and rival in consumption. 
A)  common resource, because it is rival in consumption but not excludable. 
B)  public good, because it is rival in consumption but not excludable. 
C)  public good, because it is excludable and rival in consumption. 
D)  private good, because it is excludable and rival in consumption.

Question 13

Is national defense excludable? Is it rival in consumption? How do we classify national defense in terms of the four types of goods?

Accepted Answer

National defense is

Question 14

A pizza is

Accepted Answer

A)  excludable and rival in consumption. 
B)  excludable and nonrival in consumption. 
C)  nonexcludable and rival in consumption. 
D)  nonexcludable and nonrival in consumption. 
A)  excludable and rival in consumption. 
B)  excludable and nonrival in consumption. 
C)  nonexcludable and rival in consumption. 
D)  nonexcludable and nonrival in consumption.

Question 15

Although national defense is currently a public good, economists who advocate small government generally agree that the U.S. should privatize national defense to increase the efficiency of the good.

Accepted Answer

A) True 
 B)False

Question 16

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

Accepted Answer

A)  allow individual shepherds to choose their own flock sizes. 
B)  internalize the externality by subsidizing the production of sheep's wool. 
C)  auction off a limited number of sheep-grazing permits. 
D)  wait until the market corrects the problem. 
A)  allow individual shepherds to choose their own flock sizes. 
B)  internalize the externality by subsidizing the production of sheep's wool. 
C)  auction off a limited number of sheep-grazing permits. 
D)  wait until the market corrects the problem.

Question 17

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 $24 per acre and that the residents have agreed to split the cost of building the park equally. If the residents vote to determine the size of park to build, basing their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the largest park size for which the majority of residents would vote "yes?"

Accepted Answer

A)  0 acres 
B)  1 acre 
C)  2 acres 
D)  3 acres 
A)  0 acres 
B)  1 acre 
C)  2 acres 
D)  3 acres

Question 18

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

Accepted Answer

A)  The lack of a fireworks display in Yankeeville arises because of an externality. 
B)  The lack of a fireworks display in Yankeeville is a case of market failure. 
C)  In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient. 
D)  All of the above are correct. 
A)  The lack of a fireworks display in Yankeeville arises because of an externality. 
B)  The lack of a fireworks display in Yankeeville is a case of market failure. 
C)  In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient. 
D)  All of the above are correct.

Question 19

A textbook is a

Accepted Answer

A)  private good and the knowledge that one gains from reading the book is a common resource. 
B)  private good and the knowledge that one gains from reading the book is a public good. 
C)  common resource and the knowledge that one gains from reading the book is a public good. 
D)  common resource and the knowledge that one gains from reading the book is a private good. 
A)  private good and the knowledge that one gains from reading the book is a common resource. 
B)  private good and the knowledge that one gains from reading the book is a public good. 
C)  common resource and the knowledge that one gains from reading the book is a public good. 
D)  common resource and the knowledge that one gains from reading the book is a private good.

Question 20

The town of Isle is on a small island connected to Big City by a single bridge. Most of the residents of Isle work in Big City. As a result, the bridge becomes very congested for 2 hours each day at the typical morning and evening commute times. Which of the following policies considered by the mayor of Isle would likely be most effective in alleviating the congestion?

Accepted Answer

A)  A fixed toll for the bridge payable by every vehicle crossing the bridge at all days and times. 
B)  A variable toll for the bridge payable only by vehicles crossing the bridge during the congested commute times. 
C)  Any vehicle crossing the bridge at any time must have a sticker paid for with a one-time fee of $25. 
D)  A press conference in which the mayor requests that people try to cross the bridge earlier or later than the typical commute times. 
A)  A fixed toll for the bridge payable by every vehicle crossing the bridge at all days and times. 
B)  A variable toll for the bridge payable only by vehicles crossing the bridge during the congested commute times. 
C)  Any vehicle crossing the bridge at any time must have a sticker paid for with a one-time fee of $25. 
D)  A press conference in which the mayor requests that people try to cross the bridge earlier or later than the typical commute times.

Which of the following quotations illustrates the Tragedy of the Commons?

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

A study that compares the costs and benefits to society of providing a public good is called externality analysis.

Which two types of goods are rival in consumption?

A television broadcast is an example of a good that is

Why has the value of ivory threatened the extinction of the elephant, whereas the value of beef has enhanced the survival of the cow?

Which of the following is an approach used by economists to calculate the value of a human life?

When property rights are not well established,

Knowledge is an example of a

A cheeseburger is a

Is national defense excludable? Is it rival in consumption? How do we classify national defense in terms of the four types of goods?

A pizza is

Although national defense is currently a public good, economists who advocate small government generally agree that the U.S. should privatize national defense to increase the efficiency of the good.

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

A textbook is a

Ten Principles of 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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Exam 11: Public Goods and Common Resources

Which of the following quotations illustrates the Tragedy of the Commons?

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

A study that compares the costs and benefits to society of providing a public good is called externality analysis.

Which two types of goods are rival in consumption?

A television broadcast is an example of a good that is

Why has the value of ivory threatened the extinction of the elephant, whereas the value of beef has enhanced the survival of the cow?

Which of the following is an approach used by economists to calculate the value of a human life?

When property rights are not well established,

Knowledge is an example of a

A cheeseburger is a

Is national defense excludable? Is it rival in consumption? How do we classify national defense in terms of the four types of goods?

A pizza is

Although national defense is currently a public good, economists who advocate small government generally agree that the U.S. should privatize national defense to increase the efficiency of the good.

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

A textbook is a

Ten Principles of 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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters