Exam 11: Public Goods and Common Resources

The provision of public goods gives rise to

A lighthouse might be considered a private good if

Table 11-3 This table describes the defense demands for three equal sized groups of people in Nirvanaville.The second,third,and fourth column shows the quantity that a group will demand for a given price (the first column). -Refer to Table 11-3.If the marginal cost of national defense is constant at $24 per unit,what is the efficient level of national defense to provide?

Highway engineers want to improve a dangerous stretch of highway.They expect that it will reduce the risk of someone dying in an accident from 4.1 percent to 1.5 percent over the life of the highway.If a human life is worth $4.2 million,then the project is worth doing as long as it does not cost more than

One benefit of the patent system is that it encourages the production of technical knowledge.

Knowledge is an example of a

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

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 $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?

A lighthouse is typically considered to be a public good because

A sidewalk runs across Milton's front yard near the street.By law,anyone has the right to use the sidewalk.When Milton shovels the sidewalk after a heavy snow,he is providing a

Each of the following explains why cost-benefit analysis is difficult except

Table 11-2 Consider a small town with only three families,the Johnson family,the Marshall family,and the Walker 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 $450 and the families have agreed to split the cost of the streetlights equally.If the families vote to determine the number of streetlights to install,basing their decision solely on their own willingness to pay (and trying to maximize their own surplus),what is the greatest number of streetlights for which the majority of families would vote "yes?"

An example of a private good would be

Suppose the cost to erect a tornado siren in a small town is $20,000.In addition,suppose the value of a human life is $10 million.By what percentage would the siren need to reduce the risk of a fatality for the benefits of the siren to exceed the costs of the siren?

Before considering any public project,the government should (i)compare the total cost and total benefits of the project. (ii)conduct a cost-benefit analysis. (iii)infer that citizens who vote for a project are willing to pay equally for it.

Which of the following is not an advantage of road tolls as a way to reduce traffic?

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

The commercial value of ivory is a threat to the elephant,but the commercial value of beef is a guardian of the cow.This is because

The Tragedy of the Commons can be corrected by

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