Exam 11: Public Goods and Common Resources

You and your friends eat potato chips in your bedroom. For you and your friends, the potato chips are rival in consumption.

The national defense of the United States is not excludable because

Someone who uses a good without paying for it is called a ?

Suppose that a small county is considering adding a guard rail to a dangerous curve by a river. The guard rail will cost $70,000. The average damage done to vehicles that slide off the road at the curve is $10,000. It is expected that the guard rail will prevent 5 vehicles from sliding off the road during its usable life. What should the county do?

Markets fail to allocate resources efficiently when

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 common resource? Briefly explain.

The U.S. military defends Jacob from foreign attackers. The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it. For this reason, we say that national defense is

Advocates of antipoverty programs claim that fighting poverty is a public good.

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 the streetlights equally. If the families vote to determine the number of streetlights to install, basing their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the greatest number of streetlights for which the majority of families would vote "yes?"

Drivers have to pay a toll to drive on certain roads. In essence, a toll is a corrective tax on the externality of __________.

For most goods in an economy, the primary signal that guides the decisions of buyers and sellers is

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

The town of Isle is on a small island connected to Big City by a single bridge. Most of the residents of Isle work in Big City. As a result, the bridge becomes very congested for 2 hours each day at the typical morning and evening commute times. Which of the following policies considered by the mayor of Isle would likely be most effective in alleviating the congestion?

If a road is congested, then use of that road by an additional person would lead to a

When one person enjoys the benefit of a tornado siren, she reduces the benefit to others.

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

The parable called the Tragedy of the Commons applies to goods such as

Market failure associated with the free-rider problem is a result of

Scenario 11-2 Consider the following goods: -fire-protection services provided by a fire department -a beautiful mural on the outside wall of a fire station -a firefighter's helmet -Refer to Scenario 11-2. Which of these goods is the best example of a public good? Briefly explain.

A variable toll on a road in Washington reached a high during the evening rush hour of $5.75. This toll bought the drivers who paid it a 27 minute time savings. Which of the following is correct?