Question 1

When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis

Accepted Answer

A)  are forced to pursue any project in which a single human life is saved. 
B)  are likely to make decisions that optimally allocate society's scarce resources. 
C)  would not pursue any public project that would not save human life. 
D)  would be forced to rely on private markets to provide public goods. 
A)  are forced to pursue any project in which a single human life is saved. 
B)  are likely to make decisions that optimally allocate society's scarce resources. 
C)  would not pursue any public project that would not save human life. 
D)  would be forced to rely on private markets to provide public goods.

Question 2

The U.S. government protects fish, a common resource, by

Accepted Answer

A)  subsidizing the fishing industry. 
B)  heavily taxing competing industries. 
C)  selling fishing licenses and regulating fish lengths. 
D)  None of the above is correct. 
A)  subsidizing the fishing industry. 
B)  heavily taxing competing industries. 
C)  selling fishing licenses and regulating fish lengths. 
D)  None of the above is correct.

Question 3

Most lighthouses are operated by the government because

Accepted Answer

A)  of the free-rider problem. 
B)  lighthouses are no longer valued by society. 
C)  most lighthouses are only tourist attractions in state and national parks. 
D)  shipping companies would not be able to afford maintenance fees for lighthouses. 
A)  of the free-rider problem. 
B)  lighthouses are no longer valued by society. 
C)  most lighthouses are only tourist attractions in state and national parks. 
D)  shipping companies would not be able to afford maintenance fees for lighthouses.

Question 4

It is common knowledge that many U.S. national parks have become overused. One possible solution to this problem is to

Accepted Answer

A)  increase entrance fees. 
B)  decrease camping permit fees. 
C)  require all visitors to register upon entering the park. 
D)  sell the land that the parks currently occupy. 
A)  increase entrance fees. 
B)  decrease camping permit fees. 
C)  require all visitors to register upon entering the park. 
D)  sell the land that the parks currently occupy.

Question 5

In what way do common resources give rise to negative externalities?

Accepted Answer

When one person uses a common

Question 6

Consider a public road that anyone is allowed to drive on. If the road is often congested, the road would be considered a

Accepted Answer

A)  private good. 
B)  club good. 
C)  common resource. 
D)  public good. 
A)  private good. 
B)  club good. 
C)  common resource. 
D)  public good.

Question 7

Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

Accepted Answer

Basic research is ne

Question 8

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Accepted Answer

A) True 
 B)False

Question 9

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

Accepted Answer

A)  allow individual shepherds to choose their own flock sizes. 
B)  internalize the externality by subsidizing the production of sheep's wool. 
C)  auction off a limited number of sheep-grazing permits. 
D)  wait until the market corrects the problem. 
A)  allow individual shepherds to choose their own flock sizes. 
B)  internalize the externality by subsidizing the production of sheep's wool. 
C)  auction off a limited number of sheep-grazing permits. 
D)  wait until the market corrects the problem.

Question 10

In the Tragedy of the Commons, joint action among the individual citizens would be necessary to solve their common resource problem unless the government intervenes.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district?

Accepted Answer

A)  Washington, D.C. 
B)  Sydney 
C)  Tokyo 
D)  London 
A)  Washington, D.C. 
B)  Sydney 
C)  Tokyo 
D)  London

Question 13

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a

Accepted Answer

A)  private good. 
B)  club good. 
C)  common resource. 
D)  public good. 
A)  private good. 
B)  club good. 
C)  common resource. 
D)  public good.

Question 14

Table 11-3
This table describes the police protection demands for three equal sized groups of people in Safetyville. The second, third, and fourth columns show the number of person-hours of police protection per day that a group will demand for a given price (the first column).  
-Refer to Table 11-3. If the marginal cost of police protection is constant at $36 per person-hour, what is the efficient level of police protection to provide?

Accepted Answer

A)  9 units 
B)  39 units 
C)  66 units 
D)  99 units 
A)  9 units 
B)  39 units 
C)  66 units 
D)  99 units

Question 15

Which of the following statements about private goods and public goods is correct?

Accepted Answer

A)  Private goods and public goods are both excludable. 
B)  Private goods and public goods are both rival in consumption. 
C)  Private goods are not excludable and public goods are excludable. 
D)  Private goods are rival in consumption and public goods are not excludable. 
A)  Private goods and public goods are both excludable. 
B)  Private goods and public goods are both rival in consumption. 
C)  Private goods are not excludable and public goods are excludable. 
D)  Private goods are rival in consumption and public goods are not excludable.

Question 16

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is

Accepted Answer

A)  both rival in consumption and excludable. 
B)  neither rival in consumption nor excludable. 
C)  excludable, but not rival in consumption. 
D)  rival in consumption, but not excludable. 
A)  both rival in consumption and excludable. 
B)  neither rival in consumption nor excludable. 
C)  excludable, but not rival in consumption. 
D)  rival in consumption, but not excludable.

Question 17

An internet radio broadcast 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 18

What can the government do to solve the problem of excessive use of common resources?

Accepted Answer

Government can impose regulati

Question 19

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Accepted Answer

A) True 
 B)False

Question 20

In almost all cases of common resources, the same problem arises as in the Tragedy of the .

Accepted Answer

The answer of In almost all cases of common resources,...

Exam 11: Public Goods and Common Resources

When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis

The U.S. government protects fish, a common resource, by

Most lighthouses are operated by the government because

It is common knowledge that many U.S. national parks have become overused. One possible solution to this problem is to

In what way do common resources give rise to negative externalities?

Consider a public road that anyone is allowed to drive on. If the road is often congested, the road would be considered a

Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

In the Tragedy of the Commons, joint action among the individual citizens would be necessary to solve their common resource problem unless the government intervenes.

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 city currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district?

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a

Which of the following statements about private goods and public goods is correct?

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is

An internet radio broadcast is

What can the government do to solve the problem of excessive use of common resources?

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

In almost all cases of common resources, the same problem arises as in the Tragedy of the .

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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