Question 1

A cable television broadcast of a movie 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 2

Some goods can be classified as either public goods or private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Question 3

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?

Accepted Answer

A)  0.001 
B)  0.01 
C)  0.1 
D)  1.0 
A)  0.001 
B)  0.01 
C)  0.1 
D)  1.0

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Each of the following would be considered a common resource except a

Accepted Answer

A)  water reservoir. 
B)  streetlight. 
C)  a congested road. 
D)  book from a public library. 
A)  water reservoir. 
B)  streetlight. 
C)  a congested road. 
D)  book from a public library.

Question 6

If people can be prevented from using a certain good, then that good is called

Accepted Answer

A)  rival in consumption. 
B)  excludable. 
C)  a common resource. 
D)  a public good. 
A)  rival in consumption. 
B)  excludable. 
C)  a common resource. 
D)  a public good.

Question 7

Which of the following is a disadvantage of government provision of a public good?

Accepted Answer

A)  The government lacks information about what people are willing to pay for the good. 
B)  The government does not provide enough of any public good. 
C)  The private sector can provide all public goods at a lower cost. 
D)  None of the above is a disadvantage. 
A)  The government lacks information about what people are willing to pay for the good. 
B)  The government does not provide enough of any public good. 
C)  The private sector can provide all public goods at a lower cost. 
D)  None of the above is a disadvantage.

Question 8

It would always be a mistake to view

Accepted Answer

A)  many species of animals as common resources. 
B)  a road as a public good. 
C)  national defense as a common resource. 
D)  a fireworks display as a public good. 
A)  many species of animals as common resources. 
B)  a road as a public good. 
C)  national defense as a common resource. 
D)  a fireworks display as a public good.

Question 9

Pay-per-view broadcasts are

Accepted Answer

A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods. 
A)  private goods. 
B)  club goods. 
C)  common resources. 
D)  public goods.

Question 10

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. How many streetlights should the town install to maximize total surplus from the streetlights?

Accepted Answer

A)  1 streetlight 
B)  2 streetlights 
C)  3 streetlights 
D)  4 streetlights 
A)  1 streetlight 
B)  2 streetlights 
C)  3 streetlights 
D)  4 streetlights

Question 11

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

Accepted Answer

A) True 
 B)False

Question 12

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Accepted Answer

A) True 
 B)False

Question 13

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

Accepted Answer

A) True 
 B)False

Question 14

Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near- extinction of the wild rhinoceros. What do these problems have in common?

Accepted Answer

A)  Private markets could easily solve them if governments left the markets alone. 
B)  They would all go away if the government sponsored an intensive public-information campaign. 
C)  They are all the result of a failure to establish clear property rights over something of value. 
D)  They are all the result of a failure of corrective taxes. 
A)  Private markets could easily solve them if governments left the markets alone. 
B)  They would all go away if the government sponsored an intensive public-information campaign. 
C)  They are all the result of a failure to establish clear property rights over something of value. 
D)  They are all the result of a failure of corrective taxes.

Question 15

Fire protection is a

Accepted Answer

A)  club good, because it is excludable but not rival in consumption. 
B)  club good, because it is rival in consumption but not excludable. 
C)  a public good, because it is excludable but not rival in consumption. 
D)  a public good, because it is rival in consumption but not excludable. 
A)  club good, because it is excludable but not rival in consumption. 
B)  club good, because it is rival in consumption but not excludable. 
C)  a public good, because it is excludable but not rival in consumption. 
D)  a public good, because it is rival in consumption but not excludable.

Question 16

Without government intervention, public goods tend to be

Accepted Answer

A)  overproduced and common resources tend to be overconsumed. 
B)  overproduced and common resources tend to be underconsumed. 
C)  underproduced and common resources tend to be overconsumed. 
D)  underproduced and common resources tend to be underconsumed. 
A)  overproduced and common resources tend to be overconsumed. 
B)  overproduced and common resources tend to be underconsumed. 
C)  underproduced and common resources tend to be overconsumed. 
D)  underproduced and common resources tend to be underconsumed.

Question 17

Which of the following goods is both excludable and rival in consumption?

Accepted Answer

A)  a wristwatch 
B)  fire protection in a small town 
C)  fish in the ocean 
D)  efforts to fight poverty 
A)  a wristwatch 
B)  fire protection in a small town 
C)  fish in the ocean 
D)  efforts to fight poverty

Question 18

The provision of public goods gives rise to

Accepted Answer

A)  positive externalities, as does the use of common resources. 
B)  positive externalities, whereas the use of common resources gives rise to negative externalities. 
C)  negative externalities, whereas the use of common resources gives rise to positive externalities. 
D)  negative externalities, as does the use of common resources. 
A)  positive externalities, as does the use of common resources. 
B)  positive externalities, whereas the use of common resources gives rise to negative externalities. 
C)  negative externalities, whereas the use of common resources gives rise to positive externalities. 
D)  negative externalities, as does the use of common resources.

Question 19

What do we mean when we say that a good is rival in consumption?

Accepted Answer

A good is rival in consumption

Question 20

Scenario 11-1
Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late.
-Refer to Scenario 11-1. Due to traffic, Becky expects to be 20 minutes late to pick up her children. How much would she be willing to pay for a variable toll road that would get her to the daycare center on time?

Accepted Answer

A)  any price less than $5 
B)  any price less than $10 
C)  any price less than $20 
D)  Becky would not be willing to pay out of pocket to avoid traffic. 
A)  any price less than $5 
B)  any price less than $10 
C)  any price less than $20 
D)  Becky would not be willing to pay out of pocket to avoid traffic.

Exam 11: Public Goods and Common Resources

A cable television broadcast of a movie is

Some goods can be classified as either public goods or private goods depending on the circumstances.

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

Each of the following would be considered a common resource except a

If people can be prevented from using a certain good, then that good is called

Which of the following is a disadvantage of government provision of a public good?

It would always be a mistake to view

Pay-per-view broadcasts are

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near- extinction of the wild rhinoceros. What do these problems have in common?

Fire protection is a

Without government intervention, public goods tend to be

Which of the following goods is both excludable and rival in consumption?

The provision of public goods gives rise to

What do we mean when we say that a good is rival in consumption?

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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