Exam 11: Public Goods and Common Resources

Four friends decide to meet at a Chinese restaurant for dinner.They decide that each person will order an item off the menu,and they will share all dishes.They will split the cost of the final bill evenly among each of the people at the table.A Tragedy of the Commons problem is likely for each of the following reasons except

In a cost-benefit analysis,the value of a human life is sometimes calculated on the basis of

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 $90.How many trees should be planted to maximize the total surplus of the four homeowners?

Goods that are rival in consumption but not excludable would be considered

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 $300 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Marshall's like the town to install?

National Public Radio would be considered a club good.

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

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 $100 per day.How many guards should be hired to maximize the total surplus of the four store owners?

Advocates of antipoverty programs claim that fighting poverty is a public good.

A view of a spectacular sunset along a private beach is an example of a

All goods that are excludable are also rival in consumption,but not all goods that are rival in consumption are excludable.

Aristotle writes,"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." In this statement,Aristotle is referring to the free-rider problem that occurs when a person receives the benefit of a good without paying for it.

Most goods in our economy are allocated in markets,where buyers pay for what they receive and sellers are paid for what they provide.

Excludability is the property of a good whereby

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 $75 per day.Then total surplus for the 4 store owners is

Table 11-1 Consider the town of Anywhere with only three residents,Mary,Bill,and Tricia.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 $16 per acre.How large should the park be to maximize total surplus from the park in Anywhere?

A textbook is a

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway.Which of the following statements is correct?

The Tragedy of the Commons

Figure 11-1 -Refer to Figure 11-1.Once good x is provided,policymakers need to be concerned about how much of it is used.Good x is an example of the type of good represented by Box