Deck 11: Public Goods and Common Resources

Question 1

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

A) advertising.
B) quality.
C) reputation.
D) price.

Answer 1

D

Question 2

Goods that are excludable include both

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

Answer 2

D

Question 3

The old lyric "the best things in life are free"

A) is not true for any goods.
B) is even true for some goods that have a price.
C) refers to goods provided by nature or the government.
D) refers to goods provided by the market.

Answer 3

C

Question 4

The provision of public goods gives rise to

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 5

A city street is

A) always a public good, whether or not it is congested.
B) a public good when it is congested, but it is a common resource when it is not congested.
C) a common resource when it is congested, but it is a public good when it is not congested.
D) always a common resource, whether or not it is congested.

Question 6

The provision of a public good generates a

A) positive externality, as does the use of a common resource.
B) positive externality and the use of a common resource generates a negative externality.
C) negative externality, as does the use of a common resource.
D) negative externality and the use of a common resource generates a positive externality.

Question 7

The provision of public goods gives rise to

A) no externalities.
B) positive externalities.
C) negative externalities.
D) rivalries in consumption.

Question 8

If good x is available free of charge, then

A) good x must be provided by nature.
B) good x must be provided by the government.
C) the private market cannot ensure an efficient allocation of resources in the market for good x.
D) government policy is incapable of increasing total surplus in the market for good x.

Question 9

A good is excludable if

A) one person's use of the good diminishes another person's enjoyment of it.
B) the government can regulate its availability.
C) it is not a normal good.
D) people can be prevented from using it.

Question 10

Goods that are not excludable include both

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

Question 11

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

A) efficient allocation of resources and external effects.
B) efficient allocation of resources and no external effects.
C) inefficient allocation of resources and external effects.
D) inefficient allocation of resources and no external effects.

Question 12

Government policy can potentially raise economic well-being

A) in all markets for goods and services.
B) in economic models, but not in reality.
C) when a good does not have a price attached to it.
D) never.

Question 13

The idea that "externalities arise because something of value has no price attached to it" is associated with

A) public goods, but not with common resources.
B) common resources, but not with public goods.
C) both public goods and common resources.
D) neither public goods nor common resources.

Question 14

When a good is excludable,

A) one person's use of the good diminishes another person's ability to use it.
B) people can be prevented from using the good.
C) no more than one person can use the good at the same time.
D) everyone will be excluded from using the good.

Question 15

For private goods allocated in markets,

A) prices guide the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources.
B) prices guide the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources.
C) the government guides the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources.
D) the government guides the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources.

Question 16

Excludability is the property of a good whereby

A) one person's use diminishes other peoples' use.
B) a person can be prevented from using it.
C) the government rations the quantity of a good that is available.
D) the resource is congestible.

Question 17

Resources tend to be allocated inefficiently when goods

A) are private goods.
B) are rival in consumption and excludable.
C) are available free of charge.
D) are available only at very high prices.

Question 18

Governments can improve market outcomes for

A) public goods but not common resources.
B) common resources but not public goods.
C) both public goods and common resources.
D) neither public goods nor common resources.

Question 19

When goods do not have a price, which of the following primarily ensures that the good is produced?

A) buyers
B) sellers
C) government
D) the market

Question 20

If people can be prevented from using a certain good, then that good is called

A) rival in consumption.
B) excludable.
C) a common resource.
D) a public good.

Question 21

When a good is rival in consumption,

A) one person's use of the good diminishes another person's ability to use it.
B) people can be prevented from using the good.
C) an unlimited number of people can use the good at the same time.
D) everyone will be excluded from obtaining the good.

Question 22

Goods that are rival in consumption but not excludable would be considered

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

Question 23

Goods that are not excludable are usually

A) higher priced than excludable goods.
B) higher priced than rival goods.
C) in short supply.
D) free of charge.

Question 24

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

A) negative externality.
B) positive externality.
C) Pigovian externality.
D) free-rider problem with rush hour drivers stuck in traffid.

Question 25

Both private goods and club goods are

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

Question 26

Goods that are rival in consumption and excludable would be considered

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

Question 27

An example of a private good would be

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

Question 28

A view of a spectacular sunset along a private beach is an example of a

A) private good.
B) public good.
C) nonrival but excludable good.
D) rival but nonexcludable good.

Question 29

Most goods in the economy are

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

Question 30

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is

A) both rival in consumption and excludable.
B) neither rival in consumption nor excludable.
C) excludable, but not rival in consumption.
D) rival in consumption, but not excludable.

Question 31

Goods that are not rival in consumption include both

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

Question 32

Which of the following would be considered a private good?

A) a ferry boat ride to an island with open seating
B) a public beach
C) fish in the ocean
D) a swimming suit

Question 33

The value and cost of goods are easiest to determine when the goods are

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

Question 34

Both public goods and common resources are

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

Question 35

Some goods can be either common resources or public goods depending on

A) whether the good is rival in consumption.
B) whether the good is excludable.
C) the marginal cost of the good.
D) None of the above is correct.

Question 36

If one person's use of a good diminishes another person's enjoyment of it, the good is

A) rival in consumption.
B) excludable.
C) normal.
D) exhaustible.

Question 37

Goods that are rival in consumption include both

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

Question 38

When something of value has no price attached to it,

A) externalities will be present.
B) production of the product has no cost.
C) government should not intervene to produce the product.
D) private companies will eventually produce the product, and the good will no longer be free.

Question 39

A television broadcast is an example of a good that is

A) private.
B) not rival in consumption.
C) social.
D) normal.

Question 40

Which of the following would not be considered a private good?

A) a pair of scissors
B) a pair of shoes
C) an SUV
D) cable TV service

Question 41

Under which of the following scenarios would a park be considered a public good?

A) Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables.
B) Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use.
C) Visitors can enter the park free of charge and there are always plenty of empty picnic tables.
D) Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

Question 42

A local park filled with picnickers is

A) excludable and rival in consumption.
B) excludable and not rival in consumption.
C) not excludable and rival in consumption.
D) not excludable and not rival in consumption.

Question 43

Under which of the following scenarios would a park be considered a common resource?

A) Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables.
B) Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use.
C) Visitors can enter the park free of charge and there are always plenty of empty picnic tables.
D) Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

Question 44

Which of the following goods is rival in consumption and excludable?

A) a DVD
B) a movie in an empty theater
C) an outdoor movie shown at a public park
D) a movie shown on cable television.

Question 45

Which of the following goods is rival and excludable?

A) an uncongested toll road
B) an uncongested nontoll road
C) a congested nontoll road
D) a congested toll road

Question 46

Private goods are both

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

Question 47

The Great Lakes are

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

Question 48

A congested side street in your neighborhood is

A) excludable and rival in consumption.
B) excludable and not rival in consumption.
C) not excludable and rival in consumption.
D) not excludable and not rival in consumption.

Question 49

Which of the following goods is nonrival in consumption and excludable?

A) Grand Canyon National Park on a rainy, cool day
B) Disney World on a rainy, cool day
C) a crowded public beach on a sunny, warm day
D) White Mountain ski resort on a sunny, mild day

Question 50

Which of the following goods is rival in consumption and excludable?

A) a fireworks display
B) national defense
C) a box of sparklers
D) a parade

Question 51

A streetlight is a

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

Question 52

A pizza is

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

Question 53

Which of the following goods is both excludable and rival in consumption?

A) a wristwatch
B) fire protection in a small town
C) fish in the ocean
D) efforts to fight poverty

Question 54

Under which of the following scenarios would a park be considered a club good?

A) Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables.
B) Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use.
C) Visitors can enter the park free of charge and there are always plenty of empty picnic tables.
D) Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

Question 55

A vacation home in Malibu is

A) not rival in consumption and excludable.
B) rival in consumption and excludable.
C) not rival in consumption and not excludable.
D) rival in consumption and not excludable.

Question 56

An internet radio broadcast is

A) excludable and rival in consumption.
B) excludable and not rival in consumption.
C) not excludable and rival in consumption.
D) not excludable and not rival in consumption.

Question 57

Pay-per-view broadcasts are

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

Question 58

A cable television broadcast of a movie is

A) excludable and rival in consumption.
B) excludable and not rival in consumption.
C) not excludable and rival in consumption.
D) not excludable and not rival in consumption.

Question 59

Which of the following goods is excludable but not rival in consumption?

A) a congested toll road
B) fire protection in a small town
C) a tornado siren
D) whales in the ocean

Question 60

A mobile phone is a

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

Question 61

Because it is

A) neither excludable nor rival in consumption, a tornado siren is a common resource.
B) neither excludable nor rival in consumption, a tornado siren is a public good.
C) excludable but not rival in consumption, a tornado siren is produced by a natural monopoly.
D) rival in consumption but not excludable, a tornado siren is a common resource.

Question 62

Because it is

A) excludable but not rival in consumption, a sweatshirt is a club good.
B) rival in consumption but not excludable, a sweatshirt is a club good.
C) both excludable and rival in consumption, a sweatshirt is a private good.
D) neither excludable nor rival in consumption, a sweatshirt is a public good.

Question 63

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a

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

Question 64

Figure 11-1

Refer to Figure 11-1. The box labeled C represents

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

Question 65

The Mansfield Public Library has a large number of books that anyone with a library card may borrow. Anyone can obtain a card for free. Because the number of copies of each book is limited, not everyone can have the same book at the same time. What type of good would the library books be classified as in this case?

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

Question 66

Figure 11-1

Refer to Figure 11-1. The box labeled B represents

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

Question 67

Figure 11-1

Refer to Figure 11-1. The box labeled D represents

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

Question 68

A cheeseburger is a

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 69

A good that is rival in consumption and not excludable is called a

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

Question 70

Fire protection is a

A) club good, because it is excludable but not rival in consumption.
B) club good, because it is rival in consumption but not excludable.
C) a public good, because it is excludable but not rival in consumption.
D) a public good, because it is rival in consumption but not excludable.

Question 71

Which of the following statements about private goods and public goods is correct?

A) Private goods and public goods are both excludable.
B) Private goods and public goods are both rival in consumption.
C) Private goods are not excludable and public goods are excludable.
D) Private goods are rival in consumption and public goods are not excludable.

Question 72

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

A) basic research.
B) a congested toll road.
C) spinach.
D) clothing.

Question 73

Examples of goods that are excludable include

A) fireworks displays and fire protection.
B) internet radio subscriptions and knowledge.
C) premium movie channels and streetlights.
D) mobile phones and fire protection.

Question 74

The Pennsylvania Turnpike is a tolled freeway running through the state of Pennsylvania. Motorists must pay tolls at various points along the Turnpike based on the distance they traveled on the freeway. Suppose that despite the tolls, many motorists in the urban areas use the Turnpike causing traffic to slow during peak times. What type of good would the Turnpike be classified as in this case?

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

Question 75

Figure 11-1

Refer to Figure 11-1. The box labeled A represents

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

Question 76

People cannot be prevented from using a good if the good is

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

Question 77

People can be prevented from using a good if the good is

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

Question 78

Consider a public road that anyone is allowed to drive on. If the road is often congested, the road would be considered a

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

Question 79

Which of the following types of goods are rival in consumption?

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

Question 80

At the local park there is a playground that anyone may use. There is rarely anyone using the playground, so children who use the playground receive full enjoyment from its use. The playground is

A) rival in consumption and is excludable.
B) not rival in consumption, but is excludable.
C) rival in consumption, but is not excludable.
D) not rival in consumption nor is it excludable.