Exam 11: Public Goods and Common Resources

When one person enjoys the benefit of a tornado siren, she reduces the benefit to others.

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

Pollution is a negative externality, but it is not appropriate to view the problem of pollution as a common-resource problem.

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?

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

A streetlight is a

In what way do public goods give rise to positive externalities?

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 $900 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?"

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

Are public goods excludable? Are they rival in consumption?

Which of the following statements is not correct?

The Tragedy of the Commons occurs because

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

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

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 $300. How many trees should be planted to maximize the total surplus of the four homeowners?

Figure 11-1 -Refer to Figure 11-1. To which of the boxes - A, B, C, or D - does the phenomenon of free riding most clearly apply?

Table 11-1 Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. 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 $24 per acre and that the residents have agreed to split the cost of building the park equally. If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park, how much total surplus will Sophia receive?

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?

Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. The cost to build the swimming pool is $1,000,000. Which of the following is the most efficient option?

Which of the following is not a common resource?