Question 1

Goods that are rival in consumption and excludable would be considered

Accepted Answer

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

Question 2

Each of the following would be considered a common resource except a

Accepted Answer

A)  water reservoir. 
B)  streetlight. 
C)  a congested road. 
D)  book from a public library. 
A)  water reservoir. 
B)  streetlight. 
C)  a congested road. 
D)  book from a public library.

Question 3

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. An overcrowded picnic area is an example of

Accepted Answer

A)  a private good. 
B)  a club good. 
C)  a Tragedy of the Commons. 
D)  public good. 
A)  a private good. 
B)  a club good. 
C)  a Tragedy of the Commons. 
D)  public good.

Question 4

What particular characteristic do private goods and common resources have in common?

Accepted Answer

Private goods and co

Question 5

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000. The walkway is expected to reduce the risk of fatality by 3 percent, and the cost of a human life is estimated at $10 million. The town should

Accepted Answer

A)  install the walkway because the estimated benefit is twice the cost. 
B)  install the walkway because the estimated benefit equals the cost. 
C)  not install the walkway, since the cost is twice the estimated benefit. 
D)  install the walkway, since the cost of even a single life is too great not to take action. 
A)  install the walkway because the estimated benefit is twice the cost. 
B)  install the walkway because the estimated benefit equals the cost. 
C)  not install the walkway, since the cost is twice the estimated benefit. 
D)  install the walkway, since the cost of even a single life is too great not to take action.

Question 6

An example of a private good would be

Accepted Answer

A)  a library book. 
B)  a rose garden. 
C)  an internet radio subscription. 
D)  a sleeping bag. 
A)  a library book. 
B)  a rose garden. 
C)  an internet radio subscription. 
D)  a sleeping bag.

Question 7

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes     No
-Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong?

Accepted Answer

A mathematical theor

Question 8

Are common resources excludable? Are they rival in consumption?

Accepted Answer

No, common resources

Question 9

Both public goods and common resources are

Accepted Answer

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

Question 10

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 11

A tax on gasoline often reduces road congestion because gasoline

Accepted Answer

A)  and driving are complements. 
B)  and driving are substitutes. 
C)  is a normal good, while driving is an inferior good. 
D)  is an inferior good, while driving is a normal good. 
A)  and driving are complements. 
B)  and driving are substitutes. 
C)  is a normal good, while driving is an inferior good. 
D)  is an inferior good, while driving is a normal good.

Question 12

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes     No
-Refer to Figure 11-1. With which of the boxes - A, B, C, or D - do we associate the Tragedy of the Commons?

Accepted Answer

We associate the Tra

Question 13

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Accepted Answer

A) True 
 B)False

Question 14

Neither public goods nor common resources are

Accepted Answer

A)  excludable, but only public goods are not rival in consumption. 
B)  excludable, but only common resources are not rival in consumption. 
C)  rival in consumption, but only public goods are not excludable. 
D)  rival in consumption, but only common resources are not excludable. 
A)  excludable, but only public goods are not rival in consumption. 
B)  excludable, but only common resources are not rival in consumption. 
C)  rival in consumption, but only public goods are not excludable. 
D)  rival in consumption, but only common resources are not excludable.

Question 15

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 $500. How many ferry trips should there be to maximize the total surplus of the four business owners?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 16

Markets do not ensure that the air we breathe is clean because

Accepted Answer

A)  clean air has no value. 
B)  the government prevents markets from doing so. 
C)  property rights are not well established for clean air. 
D)  clean air is impossible to produce . 
A)  clean air has no value. 
B)  the government prevents markets from doing so. 
C)  property rights are not well established for clean air. 
D)  clean air is impossible to produce .

Question 17

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

Accepted Answer

A) True 
 B)False

Question 18

The national defense of the United States is not rival because

Accepted Answer

A)  my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States. 
B)  my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States. 
C)  once the nation is defended, it is impossible to prevent any single person from enjoying the benefit of this defense. 
D)  once the nation is defended, it is possible to prevent any single person from enjoying the benefit of this defense. 
A)  my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States. 
B)  my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States. 
C)  once the nation is defended, it is impossible to prevent any single person from enjoying the benefit of this defense. 
D)  once the nation is defended, it is possible to prevent any single person from enjoying the benefit of this defense.

Question 19

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 20

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 club good? Briefly explain.

Accepted Answer

The exotic fish in the huge aq

Exam 11: Public Goods and Common Resources

Goods that are rival in consumption and excludable would be considered

Each of the following would be considered a common resource except a

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. An overcrowded picnic area is an example of

What particular characteristic do private goods and common resources have in common?

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000. The walkway is expected to reduce the risk of fatality by 3 percent, and the cost of a human life is estimated at $10 million. The town should

An example of a private good would be

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong?

Are common resources excludable? Are they rival in consumption?

Both public goods and common resources are

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

A tax on gasoline often reduces road congestion because gasoline

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. With which of the boxes - A, B, C, or D - do we associate the Tragedy of the Commons?

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Neither public goods nor common resources are

Markets do not ensure that the air we breathe is clean because

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

The national defense of the United States is not rival because

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 club good? Briefly explain.

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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