Question 1

A cheeseburger is a

Accepted Answer

A)  common resource, because it is rival in consumption but not excludable. 
B)  public good, because it is rival in consumption but not excludable. 
C)  public good, because it is excludable and rival in consumption. 
D)  private good, because it is excludable and rival in consumption. 
A)  common resource, because it is rival in consumption but not excludable. 
B)  public good, because it is rival in consumption but not excludable. 
C)  public good, because it is excludable and rival in consumption. 
D)  private good, because it is excludable and rival in consumption.

Question 2

The pollution market failure is an example of the free rider problem.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a reason why government agencies subsidize basic research?

Accepted Answer

A)  The private market devotes too few resources to basic research. 
B)  The general knowledge developed through basic research can be used without charge. 
C)  The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies. 
D)  The government wants to attract the brightest researchers away from private research firms. 
A)  The private market devotes too few resources to basic research. 
B)  The general knowledge developed through basic research can be used without charge. 
C)  The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies. 
D)  The government wants to attract the brightest researchers away from private research firms.

Question 4

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?

Accepted Answer

A)  By at least 0.015 percentage points. 
B)  By at least 0.15 percentage points. 
C)  By at least 1.5 percentage points. 
D)  By at least 5 percentage points. 
A)  By at least 0.015 percentage points. 
B)  By at least 0.15 percentage points. 
C)  By at least 1.5 percentage points. 
D)  By at least 5 percentage points.

Question 5

By driving onto a congested road for which no toll is charged, a driver

Accepted Answer

A)  contributes to the overuse of a common resource. 
B)  contributes to a negative-externality problem. 
C)  is inflicting additional time cost on all of the other drivers. 
D)  All of the above are correct. 
A)  contributes to the overuse of a common resource. 
B)  contributes to a negative-externality problem. 
C)  is inflicting additional time cost on all of the other drivers. 
D)  All of the above are correct.

Question 6

The provision of public goods gives rise to

Accepted Answer

A)  positive externalities, as does the use of common resources. 
B)  positive externalities, whereas the use of common resources gives rise to negative externalities. 
C)  negative externalities, whereas the use of common resources gives rise to positive externalities. 
D)  negative externalities, as does the use of common resources. 
A)  positive externalities, as does the use of common resources. 
B)  positive externalities, whereas the use of common resources gives rise to negative externalities. 
C)  negative externalities, whereas the use of common resources gives rise to positive externalities. 
D)  negative externalities, as does the use of common resources.

Question 7

Which of the following is not a way for the government to solve the problem of excessive use of common resources?

Accepted Answer

A)  regulation 
B)  taxes 
C)  turning the common resource into a public good 
D)  turning the common resource into a private good 
A)  regulation 
B)  taxes 
C)  turning the common resource into a public good 
D)  turning the common resource into a private good

Question 8

What do we mean when we say that a good is rival in consumption?

Accepted Answer

A good is rival in consumption

Question 9

Which of the following is a disadvantage of government provision of a public good?

Accepted Answer

A)  The government lacks information about what people are willing to pay for the good. 
B)  The government does not provide enough of any public good. 
C)  The private sector can provide all public goods at a lower cost. 
D)  None of the above is a disadvantage. 
A)  The government lacks information about what people are willing to pay for the good. 
B)  The government does not provide enough of any public good. 
C)  The private sector can provide all public goods at a lower cost. 
D)  None of the above is a disadvantage.

Question 10

The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full, the Sunday Service is

Accepted Answer

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

Question 11

Private companies will invest in medical research if

Accepted Answer

A)  they will produce general knowledge. 
B)  they will produce a specific product for which they may receive a patent. 
C)  there is no government intervention in the market for medical products. 
D)  others will benefit from their discoveries. 
A)  they will produce general knowledge. 
B)  they will produce a specific product for which they may receive a patent. 
C)  there is no government intervention in the market for medical products. 
D)  others will benefit from their discoveries.

Question 12

Which of the following goods is the best example of a public good?

Accepted Answer

A)  garbage-collection services that are provided by a municipal government 
B)  music that is broadcast over the airwaves by a privately-owned FM radio station 
C)  electricity that is provided to farmhouses by a rural electric cooperative 
D)  cable TV services that are provided by a privately-owned firm that is regulated by the government of the city in which it operates 
A)  garbage-collection services that are provided by a municipal government 
B)  music that is broadcast over the airwaves by a privately-owned FM radio station 
C)  electricity that is provided to farmhouses by a rural electric cooperative 
D)  cable TV services that are provided by a privately-owned firm that is regulated by the government of the city in which it operates

Question 13

What particular characteristic do public goods and club goods have in common?

Accepted Answer

Public goods and club goods ar

Question 14

Figure 11-1
Rival in Consumption?
Yes No
Excludable? S1U1P1YesS1S1P0     No
-Refer to Figure 11-1. Which of the following items is not a clear-cut example of the type of good represented by Box A?

Accepted Answer

A)  a mobile phone 
B)  a garden of blooming flowers 
C)  a candy bar 
D)  a stapler 
A)  a mobile phone 
B)  a garden of blooming flowers 
C)  a candy bar 
D)  a stapler

Question 15

Which of the following is an example of government intervention to solve a Tragedy of the Commons problem?

Accepted Answer

A)  subsidizing basic research 
B)  building lighthouses 
C)  toll charges on congested roads 
D)  cost-benefit analysis 
A)  subsidizing basic research 
B)  building lighthouses 
C)  toll charges on congested roads 
D)  cost-benefit analysis

Question 16

A free rider is a person who

Accepted Answer

A)  will only purchase a product on sale. 
B)  receives the benefit of a good but avoids paying for it. 
C)  can produce a good at no cost. 
D)  rides public transit regularly. 
A)  will only purchase a product on sale. 
B)  receives the benefit of a good but avoids paying for it. 
C)  can produce a good at no cost. 
D)  rides public transit regularly.

Question 17

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes     No
-Refer to Figure 11-1. The box labeled A represents what type of good?

Accepted Answer

Box A repr

Question 18

Highway engineers want to improve a dangerous stretch of highway. They expect that it will reduce the risk of someone dying in an accident from 5.3 percent to 2.1 percent over the life of the highway. If a human life is worth $10 million, then the project is worth doing as long as it does not cost more than

Accepted Answer

A)  $53,000. 
B)  $210,000. 
C)  $320,000. 
D)  $2.1 million. 
A)  $53,000. 
B)  $210,000. 
C)  $320,000. 
D)  $2.1 million.

Question 19

Figure 11-1
Rival in Consumption?
Yes No
Excludable? S1U1P1YesS1S1P0     No
-Refer to Figure 11-1. The box labeled A represents

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 20

Markets may fail to allocate resources efficiently when property rights are not well established.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

A cheeseburger is a

The pollution market failure is an example of the free rider problem.

Which of the following is not a reason why government agencies subsidize basic research?

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?

By driving onto a congested road for which no toll is charged, a driver

The provision of public goods gives rise to

Which of the following is not a way for the government to solve the problem of excessive use of common resources?

What do we mean when we say that a good is rival in consumption?

Which of the following is a disadvantage of government provision of a public good?

The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full, the Sunday Service is

Private companies will invest in medical research if

Which of the following goods is the best example of a public good?

What particular characteristic do public goods and club goods have in common?

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. Which of the following items is not a clear-cut example of the type of good represented by Box A?

Which of the following is an example of government intervention to solve a Tragedy of the Commons problem?

A free rider is a person who

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. The box labeled A represents what type of good?

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. The box labeled A represents

Markets may fail to allocate resources efficiently when property rights are not well established.

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

Filters

Figure 11-1 Rival in Consumption? Yes No Excludable? ^Yes No -Refer to Figure 11-1. Which of the following items is not a clear-cut example of the type of good represented by Box A?

Figure 11-1 Rival in Consumption? Yes No Excludable? ^Yes No -Refer to Figure 11-1. The box labeled A represents