Question 1

What particular characteristic do public goods and club goods have in common?

Accepted Answer

Public goods and club goods ar

Question 2

Consider a public road that anyone is allowed to drive on. If the road is often congested, the road would be considered a

Accepted Answer

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

Question 3

Which of the following statements is correct?

Accepted Answer

A)  Environmental degradation is an example of a free rider problem.. 
B)  The division between public goods and common resources is clear-cut. 
C)  Some goods, such as lighthouses, may be either private or public goods. 
D)  The free-rider problem prevents governments from supplying public goods. 
A)  Environmental degradation is an example of a free rider problem.. 
B)  The division between public goods and common resources is clear-cut. 
C)  Some goods, such as lighthouses, may be either private or public goods. 
D)  The free-rider problem prevents governments from supplying public goods.

Question 4

Which of the following statements is true of the tax on gasoline?

Accepted Answer

A)  The cost of collecting a gasoline tax outweighs the revenues raised by the tax. 
B)  It is preferred to tolls as the best solution to road congestion. 
C)  It discourages driving on noncongested roads, even though there is no congestion externality for these roads. 
D)  Both b and c are correct. 
A)  The cost of collecting a gasoline tax outweighs the revenues raised by the tax. 
B)  It is preferred to tolls as the best solution to road congestion. 
C)  It discourages driving on noncongested roads, even though there is no congestion externality for these roads. 
D)  Both b and c are correct.

Question 5

Figure 11-1
  
-Refer to Figure 11-1. Which of the following statements is correct?

Accepted Answer

A)  A congested toll road is an example of the type of good represented by Box B. 
B)  An uncongested toll road is an example of the type of good represented by Box D. 
C)  A congested nontoll road is an example of the type of good represented by Box C. 
D)  An uncongested nontoll road is an example of the type of good represented by Box A. 
A)  A congested toll road is an example of the type of good represented by Box B. 
B)  An uncongested toll road is an example of the type of good represented by Box D. 
C)  A congested nontoll road is an example of the type of good represented by Box C. 
D)  An uncongested nontoll road is an example of the type of good represented by Box A.

Question 6

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Accepted Answer

A) True 
 B)False

Question 7

Figure 11-1
Rival in Consumption?
    
-Refer to Figure 11-1. The box labeled B represents what type of good?

Accepted Answer

Box B repr

Question 8

The goal of requiring licenses for hunting and fishing is

Accepted Answer

A)  to reduce the use of a common resource. 
B)  to ensure that the people hunting and fishing are qualified. 
C)  to generate revenue for the government. 
D)  to monitor compliance with federal gun laws. 
A)  to reduce the use of a common resource. 
B)  to ensure that the people hunting and fishing are qualified. 
C)  to generate revenue for the government. 
D)  to monitor compliance with federal gun laws.

Question 9

Stewart is a lobsterman. His traps are

Accepted Answer

A)  private goods and the lobster he catches are common resources. 
B)  private goods and the lobster he catches are public goods. 
C)  rival in consumption and the lobster he catches are not rival in consumption. 
D)  not rival in consumption and the lobster he catches are not rival in consumption. 
A)  private goods and the lobster he catches are common resources. 
B)  private goods and the lobster he catches are public goods. 
C)  rival in consumption and the lobster he catches are not rival in consumption. 
D)  not rival in consumption and the lobster he catches are not rival in consumption.

Question 10

Because public goods are

Accepted Answer

A)  excludable, people have an incentive to be free riders. 
B)  excludable, people do not have an incentive to be free riders. 
C)  not excludable, people have an incentive to be free riders. 
D)  not excludable, people do not have an incentive to be free riders. 
A)  excludable, people have an incentive to be free riders. 
B)  excludable, people do not have an incentive to be free riders. 
C)  not excludable, people have an incentive to be free riders. 
D)  not excludable, people do not have an incentive to be free riders.

Question 11

Under which of the following scenarios would a park be considered a common resource?

Accepted Answer

A)  Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. 
B)  Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. 
C)  Visitors can enter the park free of charge and there are always plenty of empty picnic tables. 
D)  Visitors can enter the park free of charge, but frequently all of the picnic tables are in use. 
A)  Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. 
B)  Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. 
C)  Visitors can enter the park free of charge and there are always plenty of empty picnic tables. 
D)  Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

Question 12

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

Accepted Answer

A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights 
A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights

Question 13

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

Accepted Answer

A)  a wristwatch 
B)  fire protection in a small town 
C)  fish in the ocean 
D)  efforts to fight poverty 
A)  a wristwatch 
B)  fire protection in a small town 
C)  fish in the ocean 
D)  efforts to fight poverty

Question 14

In the Tragedy of the Commons parable, if the medieval townspeople had foreseen the tragedy, then they could have dealt with the problem in much the same way that modern society deals with

Accepted Answer

A)  fire protection. 
B)  poverty. 
C)  pollution. 
D)  national defense. 
A)  fire protection. 
B)  poverty. 
C)  pollution. 
D)  national defense.

Question 15

Figure 11-1
Rival in Consumption?
    
-Refer to Figure 11-1. In which box - A, B, C, or D - does cable TV belong?

Accepted Answer

Cable TV i

Question 16

Economists think that the best way to determine the value of a human life is to

Accepted Answer

A)  evaluate the value of a person's expected earnings in the labor market. 
B)  evaluate the risks people are willing to take and what they would have to be paid to take them. 
C)  determine a person's accumulated wealth at the time of death. 
D)  do nothing; human life is priceless. 
A)  evaluate the value of a person's expected earnings in the labor market. 
B)  evaluate the risks people are willing to take and what they would have to be paid to take them. 
C)  determine a person's accumulated wealth at the time of death. 
D)  do nothing; human life is priceless.

Question 17

Figure 11-1
  
-Refer to Figure 11-1. Which of the following items is not an example of the type of good represented by Box D?

Accepted Answer

A)  a mathematical theorem 
B)  an uncongested toll road 
C)  national defense 
D)  fighting poverty 
A)  a mathematical theorem 
B)  an uncongested toll road 
C)  national defense 
D)  fighting poverty

Question 18

If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a

Accepted Answer

A)  budget analysis. 
B)  project analysis. 
C)  reimbursement analysis. 
D)  cost-benefit analysis. 
A)  budget analysis. 
B)  project analysis. 
C)  reimbursement analysis. 
D)  cost-benefit analysis.

Question 19

In deciding whether a good is a public good, one must determine the

Accepted Answer

A)  incomes of those who benefit from the good. 
B)  value of the external benefits that accrue to resource owners. 
C)  excludability of the good. 
D)  All of the above are correct. 
A)  incomes of those who benefit from the good. 
B)  value of the external benefits that accrue to resource owners. 
C)  excludability of the good. 
D)  All of the above are correct.

Question 20

The Tragedy of the Commons occurs because

Accepted Answer

A)  government property is most heavily used by the wealthy. 
B)  everyone deserves an equal share of government property. 
C)  social and private incentives differ. 
D)  established property rights create competition. 
A)  government property is most heavily used by the wealthy. 
B)  everyone deserves an equal share of government property. 
C)  social and private incentives differ. 
D)  established property rights create competition.

Exam 11: Public Goods and Common Resources

What particular characteristic do public goods and club goods have in common?

Consider a public road that anyone is allowed to drive on. If the road is often congested, the road would be considered a

Which of the following statements is correct?

Which of the following statements is true of the tax on gasoline?

Figure 11-1 -Refer to Figure 11-1. Which of the following statements is correct?

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Figure 11-1 Rival in Consumption? -Refer to Figure 11-1. The box labeled B represents what type of good?

The goal of requiring licenses for hunting and fishing is

Stewart is a lobsterman. His traps are

Because public goods are

Under which of the following scenarios would a park be considered a common resource?

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

In the Tragedy of the Commons parable, if the medieval townspeople had foreseen the tragedy, then they could have dealt with the problem in much the same way that modern society deals with

Figure 11-1 Rival in Consumption? -Refer to Figure 11-1. In which box - A, B, C, or D - does cable TV belong?

Economists think that the best way to determine the value of a human life is to

Figure 11-1 -Refer to Figure 11-1. Which of the following items is not an example of the type of good represented by Box D?

If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a

In deciding whether a good is a public good, one must determine the

The Tragedy of the Commons occurs because

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

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