Question 1

Tolls are not effective in altering people's incentives to drive during rush hour.

Accepted Answer

A) True 
 B)False

Question 2

At the local park there is a playground for children to use.While anyone is allowed to use the playground,it is often very busy,reducing the enjoyment of many of the children who use it.The playground is 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

A local park filled with picnickers is

Accepted Answer

A)  excludable and rival in consumption. 
B)  excludable and not rival in consumption. 
C)  not excludable and rival in consumption. 
D)  not excludable and not rival in consumption. 
A)  excludable and rival in consumption. 
B)  excludable and not rival in consumption. 
C)  not excludable and rival in consumption. 
D)  not excludable and not rival in consumption.

Question 4

Figure 11-1
  
-Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

Accepted Answer

A)  a pair of pants 
B)  a lighthouse 
C)  a bicycle 
D)  a cattle ranch 
A)  a pair of pants 
B)  a lighthouse 
C)  a bicycle 
D)  a cattle ranch

Question 5

Roads can be considered either public goods or common resources,depending on how congested they are.

Accepted Answer

A) True 
 B)False

Question 6

Under which of the following scenarios would a park be considered a public good?

Accepted Answer

A)  Visitors to the park must pay an admittance fee,but there are always plenty of empty picnic tables. 
B)  Vistors 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)  Vistors 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 7

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except

Accepted Answer

A)  assigning land property rights. 
B)  auctioning off sheep-grazing permits. 
C)  taxing sheep flocks. 
D)  subsidizing sheep flocks. 
A)  assigning land property rights. 
B)  auctioning off sheep-grazing permits. 
C)  taxing sheep flocks. 
D)  subsidizing sheep flocks.

Question 8

One way to eliminate the Tragedy of the Commons is to

Accepted Answer

A)  increase law enforcement in public areas. 
B)  limit access to the commons. 
C)  increase access to the commons. 
D)  decrease taxes. 
A)  increase law enforcement in public areas. 
B)  limit access to the commons. 
C)  increase access to the commons. 
D)  decrease taxes.

Question 9

One of the least regulated common resources today is

Accepted Answer

A)  state parks. 
B)  the ocean. 
C)  forest preserves. 
D)  the Great Lakes. 
A)  state parks. 
B)  the ocean. 
C)  forest preserves. 
D)  the Great Lakes.

Question 10

In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates).In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

Accepted Answer

A)  On the questionnaire,some residents are likely to exaggerate the value they associate with the park. 
B)  On the questionnaire,some residents are likely to exaggerate the costs they associate with the park. 
C)  The use of such a questionnaire in cost-benefit analysis is likely to produce only rough approximations of residents' perceptions of the costs and benefits of a park. 
D)  All of the above are correct. 
A)  On the questionnaire,some residents are likely to exaggerate the value they associate with the park. 
B)  On the questionnaire,some residents are likely to exaggerate the costs they associate with the park. 
C)  The use of such a questionnaire in cost-benefit analysis is likely to produce only rough approximations of residents' perceptions of the costs and benefits of a park. 
D)  All of the above are correct.

Question 11

The old lyric "the best things in life are free"

Accepted Answer

A)  is not true for any goods. 
B)  is even true for some goods that have a price. 
C)  refers to goods provided by nature or the government. 
D)  refers to goods provided by the market. 
A)  is not true for any goods. 
B)  is even true for some goods that have a price. 
C)  refers to goods provided by nature or the government. 
D)  refers to goods provided by the market.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Private decisions about consumption of common resources and production of public goods usually lead to an

Accepted Answer

A)  efficient allocation of resources and external effects. 
B)  efficient allocation of resources and no external effects. 
C)  inefficient allocation of resources and external effects. 
D)  inefficient allocation of resources and no external effects. 
A)  efficient allocation of resources and external effects. 
B)  efficient allocation of resources and no external effects. 
C)  inefficient allocation of resources and external effects. 
D)  inefficient allocation of resources and no external effects.

Question 14

Markets fail to allocate resources efficiently when

Accepted Answer

A)  prices fluctuate. 
B)  people who have property rights abuse their privileges. 
C)  property rights are not well established. 
D)  the government refuses to intervene in private markets. 
A)  prices fluctuate. 
B)  people who have property rights abuse their privileges. 
C)  property rights are not well established. 
D)  the government refuses to intervene in private markets.

Question 15

It would always be a mistake to view

Accepted Answer

A)  a tornado siren as a public good. 
B)  a congested road as a common resource. 
C)  cable TV as a common resource. 
D)  a mathematical theorem as a public good. 
A)  a tornado siren as a public good. 
B)  a congested road as a common resource. 
C)  cable TV as a common resource. 
D)  a mathematical theorem as a public good.

Question 16

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Accepted Answer

A) True 
 B)False

Question 17

When the absence of property rights causes a market failure,the government can potentially solve the problem

Accepted Answer

A)  by clearly defining property rights. 
B)  through regulation. 
C)  by supplying the good itself. 
D)  All of the above are correct. 
A)  by clearly defining property rights. 
B)  through regulation. 
C)  by supplying the good itself. 
D)  All of the above are correct.

Question 18

Which of the following is an example of the free-rider problem?

Accepted Answer

A)  Both Zoe and Zach receive low-cost dental care at the local dental school,so neither of them pays the full cost of the care. 
B)  Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income.Yet his next door neighbor,Alice,is not eligible for the free lunch. 
C)  Bruce owns Buster,a large dog who barks whenever anyone walks near his house.Betty lives next to Bruce,and Buster's barking can be heard whenever anyone walks near her house,too.Thus,Betty receives free protection from burglars because of Buster's barking. 
D)  Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one,get one free sale. 
A)  Both Zoe and Zach receive low-cost dental care at the local dental school,so neither of them pays the full cost of the care. 
B)  Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income.Yet his next door neighbor,Alice,is not eligible for the free lunch. 
C)  Bruce owns Buster,a large dog who barks whenever anyone walks near his house.Betty lives next to Bruce,and Buster's barking can be heard whenever anyone walks near her house,too.Thus,Betty receives free protection from burglars because of Buster's barking. 
D)  Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one,get one free sale.

Question 19

Market failure associated with the free-rider problem is a result of

Accepted Answer

A)  a problem associated with pollution. 
B)  benefits that accrue to those who don't pay. 
C)  losses that accrue to providers of the product. 
D)  market power. 
A)  a problem associated with pollution. 
B)  benefits that accrue to those who don't pay. 
C)  losses that accrue to providers of the product. 
D)  market power.

Question 20

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 $380 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s)would be opposed to planting any trees?

Accepted Answer

A)  only Davis 
B)  only Adams and Davis 
C)  only Adams,Benitez,and Davis 
D)  Adams,Benitez,Chen,and Davis 
A)  only Davis 
B)  only Adams and Davis 
C)  only Adams,Benitez,and Davis 
D)  Adams,Benitez,Chen,and Davis

Exam 11: Public Goods and Common Resources

Tolls are not effective in altering people's incentives to drive during rush hour.

At the local park there is a playground for children to use.While anyone is allowed to use the playground,it is often very busy,reducing the enjoyment of many of the children who use it.The playground is a

A local park filled with picnickers is

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

Roads can be considered either public goods or common resources,depending on how congested they are.

Under which of the following scenarios would a park be considered a public good?

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except

One way to eliminate the Tragedy of the Commons is to

One of the least regulated common resources today is

In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates).In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

The old lyric "the best things in life are free"

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

Private decisions about consumption of common resources and production of public goods usually lead to an

Markets fail to allocate resources efficiently when

It would always be a mistake to view

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

When the absence of property rights causes a market failure,the government can potentially solve the problem

Which of the following is an example of the free-rider problem?

Market failure associated with the free-rider problem is a result of

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 Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving,investment,and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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