Exam 11: Public Goods and Common Resources

A free rider problem arises when

Which of the following statements is not correct?

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach. Seymour wants an efficient way to prevent overcrowding at the beach, so he should require

Before considering any public project, the government should i) compare the total cost and total benefits of the project. Ii) conduct a cost-benefit analysis. Iii) infer that citizens who vote for a project are willing to pay equally for it.

If one person's use of good x diminishes other people's use of it, then good x is one of two types of goods. What are those two types?

A good that is rival in consumption and not excludable is called a

The commercial value of ivory is a threat to the elephant, but the commercial value of beef is a guardian of the cow. This is because

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 $9 per acre and that the residents have agreed to split the cost of building the park equally. If the residents vote to determine the size of park to build, basing their decision solely on their own willingness to pay and trying to maximize their own surplus), what is the largest park size for which the majority of residents would vote "yes?"

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

Figure 11-1 -Refer to Figure 11-1. The box labeled A represents what type of good?

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 Amber receive?

A cost-benefit analysis of a highway is difficult to conduct because analysts

Suppose the cost to erect a tornado siren in a small town is $15,000. In addition, suppose the value of a human life is $10 million. By what percentage would the siren need to reduce the risk of a fatality for the benefits of the siren to exceed the costs of the siren?

National Public Radio would be considered a club good.

Imagine a 2,000-acre park with picnic benches, trees, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking on summer afternoons. Otherwise, it is a great place. An efficient solution to the parking problem would be to

Because the benefits of basic research are obvious and easy to measure, it is likely that the public sector pays for the right amount and the right kinds of basic research.

Which of the following statements is correct?

The Occupational Safety and Health Administration OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of fertilizer is 0.008. The cost of imposing a regulation that would ban the chemical is $32 million. If the value of a human life is equal to $10 million, how many people must the policy affect in order for the benefits to exceed the costs?

If a road is congested, then use of that road by an additional person would lead to a