Question 1

Which of the following is not a characteristic of a public good?

Accepted Answer

A)  It is not excludable. 
B)  It is not diminished or depreciated as additional people consume the good. 
C)  Its benefits cannot be withheld from anyone. 
D)  Because it is a free good, there is no opportunity cost. 
A)  It is not excludable. 
B)  It is not diminished or depreciated as additional people consume the good. 
C)  Its benefits cannot be withheld from anyone. 
D)  Because it is a free good, there is no opportunity cost.

Question 2

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?

Accepted Answer

A)  reduced travel time during peak hours 
B)  reduced need for public transportation 
C)  improved environmental quality 
D)  improved valuation of a common resource 
A)  reduced travel time during peak hours 
B)  reduced need for public transportation 
C)  improved environmental quality 
D)  improved valuation of a common resource

Question 3

When something of value has no price attached to it,

Accepted Answer

A)  externalities will be present. 
B)  production of the product has no cost. 
C)  government should not intervene to produce the product. 
D)  private companies will eventually produce the product, and the good will no longer be free. 
A)  externalities will be present. 
B)  production of the product has no cost. 
C)  government should not intervene to produce the product. 
D)  private companies will eventually produce the product, and the good will no longer be free.

Question 4

Table 11-5
A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip.
  
-Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $750. Then total surplus for the 4 business owners is

Accepted Answer

A)  $750 if there is 1 ferry trip. 
B)  $40 if there are 2 ferry trips. 
C)  $150 if there are 3 ferry trips. 
D)  -$400 if there are 4 ferry trips. 
A)  $750 if there is 1 ferry trip. 
B)  $40 if there are 2 ferry trips. 
C)  $150 if there are 3 ferry trips. 
D)  -$400 if there are 4 ferry trips.

Question 5

Scenario 11-3
Consider the following goods:
• a fish fillet served at a restaurant
• fish in the ocean
• exotic fish in a huge aquarium in a privately-owned building
-Refer to Scenario 11-3. Which of these goods is the best example of a private good? Briefly explain.

Accepted Answer

The fish fillet served by the

Question 6

A stairwell in a certain office building is always congested at 12:00 p.m. and 1:00 p.m. The congestion is so bad that people have been complaining to the building's owner. Which of the following methods would be the most efficient way of reducing congestion?

Accepted Answer

A)  Assign each person in the building a time when they are allowed to use the stairwell. 
B)  Encourage people to voluntarily keep off the stairwell during peak times. 
C)  Charge everyone who uses the stairwell when it is congested the same fee. People who value the use of the stairs the most will be the ones who use the stairwell at peak times. 
D)  Hold a lottery to determine who wins the right to use the stairwell at peak times. 
A)  Assign each person in the building a time when they are allowed to use the stairwell. 
B)  Encourage people to voluntarily keep off the stairwell during peak times. 
C)  Charge everyone who uses the stairwell when it is congested the same fee. People who value the use of the stairs the most will be the ones who use the stairwell at peak times. 
D)  Hold a lottery to determine who wins the right to use the stairwell at peak times.

Question 7

Which of the following would be considered a private good?

Accepted Answer

A)  a ferry boat ride to an island with open seating 
B)  a public beach 
C)  fish in the ocean 
D)  a swimming suit 
A)  a ferry boat ride to an island with open seating 
B)  a public beach 
C)  fish in the ocean 
D)  a swimming suit

Question 8

Because elephants roam freely in many countries in Africa, each individual African elephant poacher has

Accepted Answer

A)  a strong incentive to kill as many elephants as he can find. 
B)  a strong incentive to protect the elephants. 
C)  the ability to save the elephants. 
D)  None of the above is correct. 
A)  a strong incentive to kill as many elephants as he can find. 
B)  a strong incentive to protect the elephants. 
C)  the ability to save the elephants. 
D)  None of the above is correct.

Question 9

The failure of markets to adequately protect the environment can viewed either as a problem of

Accepted Answer

A)  externalities or as a problem of common resources. 
B)  externalities or as a problem of private goods. 
C)  the overprovision of public goods or as a problem of the underprovision of private goods. 
D)  club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity. 
A)  externalities or as a problem of common resources. 
B)  externalities or as a problem of private goods. 
C)  the overprovision of public goods or as a problem of the underprovision of private goods. 
D)  club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity.

Question 10

Goods that are excludable include both

Accepted Answer

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

Question 11

Because it is

Accepted Answer

A)  neither excludable nor rival in consumption, a tornado siren is a common resource. 
B)  neither excludable nor rival in consumption, a tornado siren is a public good. 
C)  excludable but not rival in consumption, a tornado siren is produced by a natural monopoly. 
D)  rival in consumption but not excludable, a tornado siren is a common resource. 
A)  neither excludable nor rival in consumption, a tornado siren is a common resource. 
B)  neither excludable nor rival in consumption, a tornado siren is a public good. 
C)  excludable but not rival in consumption, a tornado siren is produced by a natural monopoly. 
D)  rival in consumption but not excludable, a tornado siren is a common resource.

Question 12

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 13

Elephants are endangered, but cows are not because

Accepted Answer

A)  cows are not as valuable as elephants. 
B)  elephants are a common resource, while cows are private goods. 
C)  cows are a common resource, while elephants are private goods. 
D)  it is legal to kill cows but not elephants. 
A)  cows are not as valuable as elephants. 
B)  elephants are a common resource, while cows are private goods. 
C)  cows are a common resource, while elephants are private goods. 
D)  it is legal to kill cows but not elephants.

Question 14

Variable tolls on roads

Accepted Answer

A)  are politically unpopular because people do not like the idea of paying for a good that they used to consume without paying for it directly. 
B)  rise when traffic volume increases to ensure the speed on the road is kept high. 
C)  are an effective way of correcting the common resource problem on roads. 
D)  All of the above are correct. 
A)  are politically unpopular because people do not like the idea of paying for a good that they used to consume without paying for it directly. 
B)  rise when traffic volume increases to ensure the speed on the road is kept high. 
C)  are an effective way of correcting the common resource problem on roads. 
D)  All of the above are correct.

Question 15

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Accepted Answer

A) True 
 B)False

Question 16

An overcrowded beach is an example of

Accepted Answer

A)  a positive externality. 
B)  a Tragedy of the Commons. 
C)  an environmentally inefficient allocation of resources. 
D)  an economically unfair allocation of resources. 
A)  a positive externality. 
B)  a Tragedy of the Commons. 
C)  an environmentally inefficient allocation of resources. 
D)  an economically unfair allocation of resources.

Question 17

A good that is excludable is one that someone can be prevented from using if she did not pay for it.

Accepted Answer

A) True 
 B)False

Question 18

On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. Suppose that the Minnesota State Park Service institutes a variable fee structure. On weekdays when the picnic areas get little use, the fee is zero. On normal weekends, the fee is $8 per person. On holiday weekends, the fee is $14 per person. The fee system corrects a problem known as the

Accepted Answer

A)  Coase theorem. 
B)  free rider problem. 
C)  Tragedy of the Commons. 
D)  public goods problem. 
A)  Coase theorem. 
B)  free rider problem. 
C)  Tragedy of the Commons. 
D)  public goods problem.

Question 19

When goods do not have a price, which of the following primarily ensures that the good is produced?

Accepted Answer

A)  buyers 
B)  sellers 
C)  government 
D)  the market 
A)  buyers 
B)  sellers 
C)  government 
D)  the market

Question 20

Which of the following is not a public good?

Accepted Answer

A)  national defense 
B)  patented technological knowledge 
C)  general knowledge 
D)  the elimination of poverty 
A)  national defense 
B)  patented technological knowledge 
C)  general knowledge 
D)  the elimination of poverty

Exam 11: Public Goods and Common Resources

Which of the following is not a characteristic of a public good?

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?

When something of value has no price attached to it,

Scenario 11-3 Consider the following goods: • a fish fillet served at a restaurant • fish in the ocean • exotic fish in a huge aquarium in a privately-owned building -Refer to Scenario 11-3. Which of these goods is the best example of a private good? Briefly explain.

A stairwell in a certain office building is always congested at 12:00 p.m. and 1:00 p.m. The congestion is so bad that people have been complaining to the building's owner. Which of the following methods would be the most efficient way of reducing congestion?

Which of the following would be considered a private good?

Because elephants roam freely in many countries in Africa, each individual African elephant poacher has

The failure of markets to adequately protect the environment can viewed either as a problem of

Goods that are excludable include both

Because it is

One of the least regulated common resources today is

Elephants are endangered, but cows are not because

Variable tolls on roads

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

An overcrowded beach is an example of

A good that is excludable is one that someone can be prevented from using if she did not pay for it.

When goods do not have a price, which of the following primarily ensures that the good is produced?

Which of the following is not a public good?

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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