Question 1

National defense is a ________ because ________.

Accepted Answer

A)  public good; it can be an overused resource 
B)  public good; it is nonrival and nonexcludable 
C)  common resource; no one has the incentive to pay for his or her share 
D)  private good; no one has an incentive to conserve the good 
E)  common resource; it suffers from the tragedy of the commons 
A)  public good; it can be an overused resource 
B)  public good; it is nonrival and nonexcludable 
C)  common resource; no one has the incentive to pay for his or her share 
D)  private good; no one has an incentive to conserve the good 
E)  common resource; it suffers from the tragedy of the commons

Question 2

Which of the following can be rival and excludable?
i.a good
ii.a service
iii.a resource

Accepted Answer

A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  i, ii and iii 
E)  only i 
A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  i, ii and iii 
E)  only i

Question 3

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

Accepted Answer

A)  the free-rider problem. 
B)  the principle of minimum differentiation. 
C)  the public provision of a good. 
D)  a public good. 
E)  rational ignorance on the part of Burger King. 
A)  the free-rider problem. 
B)  the principle of minimum differentiation. 
C)  the public provision of a good. 
D)  a public good. 
E)  rational ignorance on the part of Burger King.

Question 4

When someone enjoys the benefit of a good or service but does not pay for it,that person

Accepted Answer

A)  is a free range consumer. 
B)  is a free rider. 
C)  receives no marginal benefit from the good. 
D)  must be consuming an excludable good. 
E)  is contributing to the tragedy of the commons. 
A)  is a free range consumer. 
B)  is a free rider. 
C)  receives no marginal benefit from the good. 
D)  must be consuming an excludable good. 
E)  is contributing to the tragedy of the commons.

Question 5

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

Accepted Answer

A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  300 tons per week 
E)  500 tons per week 
A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  300 tons per week 
E)  500 tons per week

Question 6

One reason the size of the government is large is because

Accepted Answer

A)  people's demand for private goods grows faster than their demand for public goods. 
B)  politicians do not support spending on things such as education and public health. 
C)  voters' incomes grow, thereby causing an increased demand for private goods. 
D)  budget maximization by bureaucrats and rational ignorance by voters lead to overproduction. 
E)  rational ignorance by politicians who follow the principle of minimum differentiation. 
A)  people's demand for private goods grows faster than their demand for public goods. 
B)  politicians do not support spending on things such as education and public health. 
C)  voters' incomes grow, thereby causing an increased demand for private goods. 
D)  budget maximization by bureaucrats and rational ignorance by voters lead to overproduction. 
E)  rational ignorance by politicians who follow the principle of minimum differentiation.

Question 7

If a good or resource is rival,it could be a

Accepted Answer

A)  public good. 
B)  private good. 
C)  common resource. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct. 
A)  public good. 
B)  private good. 
C)  common resource. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct.

Question 8

The principle of minimum differentiation describes a tendency of competitors to

Accepted Answer

A)  lower price. 
B)  offer similar products or policies. 
C)  decrease the quantity of goods available. 
D)  offer public goods for sale. 
E)  free ride. 
A)  lower price. 
B)  offer similar products or policies. 
C)  decrease the quantity of goods available. 
D)  offer public goods for sale. 
E)  free ride.

Question 9

Marginal cost curves for public goods are usually

Accepted Answer

A)  downward sloping. 
B)  upward sloping. 
C)  horizontal. 
D)  vertical. 
E)  U-shaped. 
A)  downward sloping. 
B)  upward sloping. 
C)  horizontal. 
D)  vertical. 
E)  U-shaped.

Question 10

Suppose a public good is provided in an economy with only two consumers,Popeye and Captain Hook.If Popeye values the public good at $4,000 per year,and Captain Hook values it at $3,000 per year,the economy's marginal benefit of the public good per year is

Accepted Answer

A)  $7,000. 
B)  $4,000. 
C)  $3,000. 
D)  $1,000. 
E)  $12,000. 
A)  $7,000. 
B)  $4,000. 
C)  $3,000. 
D)  $1,000. 
E)  $12,000.

Question 11

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The market equilibrium with no government intervention is ________.

Accepted Answer

A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  500 tons per week 
E)  None of the above answers is correct. 
A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  500 tons per week 
E)  None of the above answers is correct.

Question 12

Why are fish in the ocean an example of a resource that suffers from the tragedy of the commons but cattle grazing in a farmer's pasture do not suffer from the tragedy of the commons?

Accepted Answer

Fish in the ocean are a common resource

Question 13

A private,competitive market

Accepted Answer

A)  provides the efficient quantity of a public good. 
B)  allocates too few resources for a public good. 
C)  allocates too many resources for a public good. 
D)  can be relied upon to allocate resources efficiently both for private and public goods. 
E)  will allocate too many resources for a public good only if free riding occurs. 
A)  provides the efficient quantity of a public good. 
B)  allocates too few resources for a public good. 
C)  allocates too many resources for a public good. 
D)  can be relied upon to allocate resources efficiently both for private and public goods. 
E)  will allocate too many resources for a public good only if free riding occurs.

Question 14

One way to overcome the tragedy of the commons is to

Accepted Answer

A)  assign property rights so that someone owns the resource. 
B)  take away property rights so that no one owns the resource. 
C)  leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. 
D)  educate people in order to overcome the problem of rational ignorance. 
E)  None of the above answers is correct. 
A)  assign property rights so that someone owns the resource. 
B)  take away property rights so that no one owns the resource. 
C)  leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. 
D)  educate people in order to overcome the problem of rational ignorance. 
E)  None of the above answers is correct.

Question 15

The free-rider problem is associated with

Accepted Answer

A)  public goods. 
B)  private goods. 
C)  common resources. 
D)  any type of good. 
E)  natural monopolies. 
A)  public goods. 
B)  private goods. 
C)  common resources. 
D)  any type of good. 
E)  natural monopolies.

Question 16

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

Accepted Answer

A)  rational exuberance. 
B)  irrational exuberance. 
C)  irrational intelligence. 
D)  rational ignorance. 
E)  the principle of minimum ignorance. 
A)  rational exuberance. 
B)  irrational exuberance. 
C)  irrational intelligence. 
D)  rational ignorance. 
E)  the principle of minimum ignorance.

Question 17

A few years back,The Wall Street Journal reported that the government of Thailand "plans to launch a chain of more than 3,000 Thai restaurants world-wide over the next five years,with the largest number,more than 1,000,slated for the United States." The Thai government will have a 30 percent minority stake in the restaurants and the rest will be given to Thai owners.The country's deputy commerce minister explains that the government will play an active role in drawing up menus,making sure that genuine Thai food is served and ensuring that 70 percent of supplies for the restaurants are imported from Thailand.Because the Thai government will be part owner of these restaurants,are these restaurants public goods?

Accepted Answer

Although the government of Thailand has

Question 18

To determine the efficient quantity of a public good to supply,

Accepted Answer

A)  the private firms that will produce the good each produce the exact same quantity. 
B)  marginal benefit and marginal cost are equated, the same as is done to determine the efficient quantity of a private good. 
C)  total benefit is equated to total cost, the same as is done to determine the efficient quantity of a private good. 
D)  politicians use the principle of maximum differentiation. 
E)  marginal benefit must exceed marginal cost by as much as possible. 
A)  the private firms that will produce the good each produce the exact same quantity. 
B)  marginal benefit and marginal cost are equated, the same as is done to determine the efficient quantity of a private good. 
C)  total benefit is equated to total cost, the same as is done to determine the efficient quantity of a private good. 
D)  politicians use the principle of maximum differentiation. 
E)  marginal benefit must exceed marginal cost by as much as possible.

Question 19

If the government assigns private property rights to a common resource,then the

Accepted Answer

A)  resource is under-utilized. 
B)  marginal private cost becomes equal to the marginal social cost. 
C)  government needs to set a quota to achieve efficiency. 
D)  resource becomes subject to the free riding problem. 
E)  resource cannot be utilized. 
A)  resource is under-utilized. 
B)  marginal private cost becomes equal to the marginal social cost. 
C)  government needs to set a quota to achieve efficiency. 
D)  resource becomes subject to the free riding problem. 
E)  resource cannot be utilized.

Question 20

A private good is

Accepted Answer

A)  nonexcludable and nonrival. 
B)  excludable and rival. 
C)  excludable and nonrival. 
D)  nonrival and excludable. 
E)  subject to the free-riding problem. 
A)  nonexcludable and nonrival. 
B)  excludable and rival. 
C)  excludable and nonrival. 
D)  nonrival and excludable. 
E)  subject to the free-riding problem.

National defense is a because .

Which of the following can be rival and excludable? i.a good ii.a service iii.a resource

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

When someone enjoys the benefit of a good or service but does not pay for it,that person

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

One reason the size of the government is large is because

If a good or resource is rival,it could be a

The principle of minimum differentiation describes a tendency of competitors to

Marginal cost curves for public goods are usually

Suppose a public good is provided in an economy with only two consumers,Popeye and Captain Hook.If Popeye values the public good at $4,000 per year,and Captain Hook values it at $3,000 per year,the economy's marginal benefit of the public good per year is

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The market equilibrium with no government intervention is ________.

Why are fish in the ocean an example of a resource that suffers from the tragedy of the commons but cattle grazing in a farmer's pasture do not suffer from the tragedy of the commons?

A private,competitive market

One way to overcome the tragedy of the commons is to

The free-rider problem is associated with

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

To determine the efficient quantity of a public good to supply,

If the government assigns private property rights to a common resource,then the

A private good is

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Public Goods and Common Resources

National defense is a ________ because ________.

Which of the following can be rival and excludable? i.a good ii.a service iii.a resource

Suppose Burger King builds a new store across the street from a McDonald's.This is an example of

When someone enjoys the benefit of a good or service but does not pay for it,that person

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota to prevent the overuse of the cod sets the catch equal to ________.

One reason the size of the government is large is because

If a good or resource is rival,it could be a

The principle of minimum differentiation describes a tendency of competitors to

Marginal cost curves for public goods are usually

Suppose a public good is provided in an economy with only two consumers,Popeye and Captain Hook.If Popeye values the public good at $4,000 per year,and Captain Hook values it at $3,000 per year,the economy's marginal benefit of the public good per year is

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The market equilibrium with no government intervention is ________.

Why are fish in the ocean an example of a resource that suffers from the tragedy of the commons but cattle grazing in a farmer's pasture do not suffer from the tragedy of the commons?

A private,competitive market

One way to overcome the tragedy of the commons is to

The free-rider problem is associated with

When Jean makes a decision NOT to obtain information about an issue that doesn't have a perceptible effect on her,Jean's choice is referred to as

To determine the efficient quantity of a public good to supply,

If the government assigns private property rights to a common resource,then the

A private good is

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

National defense is a because .