Exam 11: Public Goods and Common Resources

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

The Tragedy of the Commons results when a good is

For private goods allocated in markets,

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is not excludable and not rival in consumption?

In the Tragedy of the Commons parable, if the medieval townspeople had foreseen the tragedy, then they could have dealt with the problem in much the same way that modern society deals with

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

Figure 11-1 -Refer to Figure 11-1. For which two boxes is it the case that externalities arise because something of value has no price attached to it?

If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

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. Suppose Becky lives in a city with an optional toll lane that assures a drive at the posted speed limit. She leaves her office at 5:00 for her usual 30 minute commute but hears on the radio that if she drives in the non-toll lanes, her commute will take 1 hour due to an accident. Becky should

The government often intervenes when private markets fail to provide an optimal level of certain goods and services. For example, the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another. Why might the private market not reach the socially optimal level of traffic without the help of government?

Goods that are not excludable include both

Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?

Excessive fishing occurs because

Private goods are both

A good is excludable if