Exam 11: Public Goods and Common Resources

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 $1,000 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. How many ferry trips would the owner of Store A prefer to have?

Why do elephants face the threat of extinction while cows do not?

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 $750 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. Which of the following statements is correct?

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

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

Goods that are not rival in consumption include both

Private decisions about consumption of common resources and production of public goods usually lead to an

A textbook is a

Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near- extinction of the wild rhinoceros. What do these problems have in common?

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. How large should the park be to maximize total surplus from the park in Springfield?

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

One way to place a value on human life is to examine the risks that people voluntarily take and how much they must be paid for taking them. What is the approximate value of a human life according to studies that use this approach?

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 $750 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. Which business owner(s) would be opposed to having any ferry trips?

Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?

If good x is available free of charge, then

Which of the following is correct regarding road tolls as a way to reduce traffic?

Which of the following statements is correct?

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 cable TV belong?

When a good does not have a attached to it, private markets fail to ensure that the good is produced and consumed in the proper amounts.

Four roommates share an off-campus house and equally share the cost of rent. Everyone says that she values a clean house, yet the house is usually dirty. To an economist, a clean house in this case represents