Question 1

In what sense is it meaningful to say that fighting poverty is a public good?

Accepted Answer

The argument that fighting poverty is a

Question 2

Pete is a non-union employee at The Electric Co. The majority of the employees at The Electric Co. are unionized. The union at The Electric Co. has negotiated very good benefits. Even though he is not a union member and he does not have to pay union dues, Pete receives all the benefits that the union has negotiated. Pete's behavior is an example of

Accepted Answer

A)  rivalry. 
B)  a barrier to entry. 
C)  free riding. 
D)  Taft-Hartley opposition. 
A)  rivalry. 
B)  a barrier to entry. 
C)  free riding. 
D)  Taft-Hartley opposition.

Question 3

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

Accepted Answer

A)  The benefits are usually easier to measure than the costs. 
B)  Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs. 
C)  Estimating the value of a human life is difficult but necessary to evaluate the proposal. 
D)  Both a and b are correct. 
A)  The benefits are usually easier to measure than the costs. 
B)  Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs. 
C)  Estimating the value of a human life is difficult but necessary to evaluate the proposal. 
D)  Both a and b are correct.

Question 4

A pizza is

Accepted Answer

A)  excludable and rival in consumption. 
B)  excludable and nonrival in consumption. 
C)  nonexcludable and rival in consumption. 
D)  nonexcludable and nonrival in consumption. 
A)  excludable and rival in consumption. 
B)  excludable and nonrival in consumption. 
C)  nonexcludable and rival in consumption. 
D)  nonexcludable and nonrival in consumption.

Question 5

When a good is rival in consumption,

Accepted Answer

A)  one person's use of the good diminishes another person's ability to use it. 
B)  people can be prevented from using the good. 
C)  an unlimited number of people can use the good at the same time. 
D)  everyone will be excluded from obtaining the good. 
A)  one person's use of the good diminishes another person's ability to use it. 
B)  people can be prevented from using the good. 
C)  an unlimited number of people can use the good at the same time. 
D)  everyone will be excluded from obtaining the good.

Question 6

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

Accepted Answer

A)  Without prices, it is difficult to be sure how much people really value a good. 
B)  Analysts can't be sure that the respondents to surveys are telling the truth. 
C)  Analysis must include not only the cost of building the project but also the cost of maintenance, if any. 
D)  People value goods differently if they are publicly provided rather than privately provided. 
A)  Without prices, it is difficult to be sure how much people really value a good. 
B)  Analysts can't be sure that the respondents to surveys are telling the truth. 
C)  Analysis must include not only the cost of building the project but also the cost of maintenance, if any. 
D)  People value goods differently if they are publicly provided rather than privately provided.

Question 7

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes     No
-Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Accepted Answer

Clean air is a commo

Question 8

Which of the following goods is nonrival in consumption and excludable?

Accepted Answer

A)  Grand Canyon National Park on a rainy, cool day 
B)  Disney World on a rainy, cool day 
C)  a crowded public beach on a sunny, warm day 
D)  White Mountain ski resort on a sunny, mild day 
A)  Grand Canyon National Park on a rainy, cool day 
B)  Disney World on a rainy, cool day 
C)  a crowded public beach on a sunny, warm day 
D)  White Mountain ski resort on a sunny, mild day

Question 9

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Accepted Answer

A)  Elephants live in Africa, whereas cows live in the United States. 
B)  Elephants are a common resource. 
C)  Cows are a common resource. 
D)  Cows are a public good. 
A)  Elephants live in Africa, whereas cows live in the United States. 
B)  Elephants are a common resource. 
C)  Cows are a common resource. 
D)  Cows are a public good.

Question 10

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Accepted Answer

A)  basic research. 
B)  a congested toll road. 
C)  spinach. 
D)  clothing. 
A)  basic research. 
B)  a congested toll road. 
C)  spinach. 
D)  clothing.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

The Great Lakes 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 13

The idea of requiring motorists to pay to use the busiest streets in a city

Accepted Answer

A)  has been proposed by many public officials, but to date the idea never has been tried in a major city anywhere in the world. 
B)  was tried in New York City in the 1990s, but the result was more - not less - congestion on busy streets, and the experiment was short-lived. 
C)  reflects the fact that a congested road is a public good. 
D)  reflects the fact that a congested road is a common resource. 
A)  has been proposed by many public officials, but to date the idea never has been tried in a major city anywhere in the world. 
B)  was tried in New York City in the 1990s, but the result was more - not less - congestion on busy streets, and the experiment was short-lived. 
C)  reflects the fact that a congested road is a public good. 
D)  reflects the fact that a congested road is a common resource.

Question 14

Many species of animals are common resources, and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species even though there is such a high demand for beef?

Accepted Answer

A)  Cows reproduce at a high rate and have adapted well to their environment. 
B)  Public policies protect cows from predators and diseases. 
C)  Cows are privately owned, whereas many endangered species are owned by no one. 
D)  There is a natural ecological balance between the birth rate of cows and human consumption. 
A)  Cows reproduce at a high rate and have adapted well to their environment. 
B)  Public policies protect cows from predators and diseases. 
C)  Cows are privately owned, whereas many endangered species are owned by no one. 
D)  There is a natural ecological balance between the birth rate of cows and human consumption.

Question 15

The Tragedy of the Commons occurs because

Accepted Answer

A)  common resources are rival in consumption. 
B)  government does not efficiently allocate society's scarce resources. 
C)  people consider the value of resources in the future more than in the present. 
D)  markets do not account for the presence of property rights. 
A)  common resources are rival in consumption. 
B)  government does not efficiently allocate society's scarce resources. 
C)  people consider the value of resources in the future more than in the present. 
D)  markets do not account for the presence of property rights.

Question 16

It would always be a mistake to view

Accepted Answer

A)  a streetlight as a common resource. 
B)  a nontoll road as a public good. 
C)  the environment as a common resource. 
D)  a lighthouse as a public good. 
A)  a streetlight as a common resource. 
B)  a nontoll road as a public good. 
C)  the environment as a common resource. 
D)  a lighthouse as a public good.

Question 17

Which two types of goods are excludable?

Accepted Answer

Private go

Question 18

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 $360 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Greene's like the town to install?

Accepted Answer

A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights 
A)  0 streetlights 
B)  1 streetlight 
C)  2 streetlights 
D)  3 streetlights

Question 19

Goods that are rival in consumption 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 20

Because of the free-rider problem,

Accepted Answer

A)  private markets tend to undersupply public goods. 
B)  the federal government spends too many resources on national defense and not enough resources on medical research. 
C)  fireworks displays have become increasingly dangerous. 
D)  poverty has increased. 
A)  private markets tend to undersupply public goods. 
B)  the federal government spends too many resources on national defense and not enough resources on medical research. 
C)  fireworks displays have become increasingly dangerous. 
D)  poverty has increased.

Exam 11: Public Goods and Common Resources

In what sense is it meaningful to say that fighting poverty is a public good?

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

A pizza is

When a good is rival in consumption,

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

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Which of the following goods is nonrival in consumption and excludable?

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

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

The Great Lakes are

The idea of requiring motorists to pay to use the busiest streets in a city

Many species of animals are common resources, and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species even though there is such a high demand for beef?

The Tragedy of the Commons occurs because

It would always be a mistake to view

Which two types of goods are excludable?

Goods that are rival in consumption include both

Because of the free-rider problem,

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 Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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