Exam 11: Public Goods and Common Resources

Table 11-5 A small strip mall contains four retail stores,and crime has recently been on the increase in the neighborhood of the strip mall.The owners of the four stores - Stores A,B,C,and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards.The table represents their willingness to pay,that is,the maximum amount that each store owner is willing to contribute,per day,to hire each security guard. -Refer to Table 11-5.Suppose the cost to hire each individual guard is $70 per day.How many guards should be hired to maximize the total surplus of the four store owners?

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The Occupational Safety and Health Administration (OSHA)has determined that 100 workers are exposed to a hazardous chemical used in the production of diet soft drinks.The cost of imposing a regulation that would ban the chemical is $10 million.OSHA has calculated that each person saved by this regulation has a value equal to $10 million.If the benefits are exactly equal to the costs,what probability is OSHA using to assess the likelihood of a fatality from exposure to this chemical?

Table 11-5 A small strip mall contains four retail stores,and crime has recently been on the increase in the neighborhood of the strip mall.The owners of the four stores - Stores A,B,C,and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards.The table represents their willingness to pay,that is,the maximum amount that each store owner is willing to contribute,per day,to hire each security guard. -Refer to Table 11-5.Suppose the cost to hire each individual guard is $90 per day and the 4 store owners have agreed to split the costs of hiring guards equally.Which of the following statements is correct?

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

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?

Which of the following statements is not correct?

Phil owns 10 acres of beautiful wooded land.When Phil decides to move to be closer to his grandchildren,he donates the land to the state with the understanding that the land will be used as a state park that anyone may use without paying any fees.This state park

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Governments can improve market outcomes for

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

Governments that chose to make endangered elephants private goods have met with more success protecting elephants than governments that chose to make killing elephants illegal.

In which of the following examples are property rights not well established?

Suppose that a small county is considering adding a guard rail to a dangerous curve by a river.The guard rail will cost $70,000.The average damage done to vehicles that slide off the road at the curve is $10,000.It is expected that the guard rail will prevent 5 vehicles from sliding off the road during its usable life.What should the county do?

Because of the free-rider problem,

When Rick uses a common resource and diminishes other people's enjoyment of it,he creates

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

Some goods,such as lighthouses,can switch between being public goods and being private goods depending on the circumstances.

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

Which of the following is not a common resource?