Deck 17: Public Goods and Common Resources

Question 1

A good is MOST likely to be artificially scarce if:

A) it is nonexcludable and nonrival.
B) the seller is a monopolist.
C) it is nonexcludable but rival.
D) it is excludable but nonrival.

Answer 1

it is excludable but nonrival.

Question 2

The BEST example of a private good is:

A) an automobile.
B) public education.
C) national defence.
D) law enforcement.

Answer 2

an automobile.

Question 3

A(n)_____ is nonexcludable and nonrival in consumption.

A) private good
B) artificially scarce good
C) public good
D) common resource

Answer 3

public good

Question 4

A common resource is a good or service for which exclusion is _____ and that is _____ in consumption.

A) possible;rival
B) possible;nonrival
C) not possible;rival
D) not possible;nonrival

Question 5

An artificially scarce good is a good or service for which exclusion is _____ and that is _____ in consumption.

A) possible;rival
B) possible;nonrival
C) not possible;rival
D) not possible;nonrival

Question 6

A public good is a good or service for which exclusion is _____ and that is _____ in consumption.

A) possible;rival
B) possible;nonrival
C) not possible;rival
D) not possible;nonrival

Question 7

Clean water in a river is nonexcludable because:

A) it is not possible to prevent consumption by people who do not pay for it.
B) more than one person can consume the same unit of the good at the same time.
C) individuals ignore the effect their use has on the amount of the resource remaining for others.
D) consumption is inefficiently low.

Question 8

Which good is MOST likely a public good?

A) the Internet
B) an amusement park
C) a pair of pants
D) fire protection from the fire department in a town

Question 9

Which good BEST fits the characteristics of a private good?

A) national defence
B) clean water
C) a pizza
D) police protection

Question 10

The BEST example of a public good is:

A) a court of law.
B) clothing.
C) food.
D) a pizza.

Question 11

Which example BEST fits the characteristics of a private good?

A) a professor giving a lecture in a large classroom
B) an ice-cream cone
C) fire protection
D) disease prevention

Question 12

A(n)_____ is excludable and rival in consumption.

A) private good
B) artificially scarce good
C) public good
D) common resource

Question 13

When Joe watches a movie on Netflix,his viewing is _____ in consumption because other people _____ able to watch the movie at the same time as Joe does.

A) nonrival;are
B) rival;are
C) rival;are not
D) nonrival;are not

Question 14

Which good is MOST likely a common resource?

A) the Grey Cup
B) a public park
C) a pair of pants
D) the fire department

Question 15

A private good is _____ in consumption.

A) excludable and rival
B) nonexcludable and nonrival
C) excludable and nonrival
D) nonexcludable and rival

Question 16

Television programmes are nonrival because:

A) the supplier cannot prevent consumption by people who do not pay for it.
B) more than one person can consume the same unit of the good at the same time.
C) individuals ignore the effect of their use on the amount of the resource remaining for others.
D) the market suffers from inefficiently low consumption.

Question 17

Which example is considered a nonexcludable good?

A) health care
B) national defence
C) education
D) ice cream

Question 18

Which good is MOST likely an artificially scarce good?

A) a ticket to a boxing match
B) pay per view of a boxing match
C) health care
D) the police department

Question 19

Whether or not they pay for them,people cannot be excluded from receiving the benefits of _____,but they can be excluded from the benefits of _____.

A) private goods;public goods and common resources
B) public goods;private goods and common resources
C) common resources;public goods and private goods
D) either public goods or common resources;private goods

Question 20

A private good is a good or service for which exclusion is _____ and that is _____ in consumption.

A) possible;rival
B) possible;nonrival
C) not possible;rival
D) not possible;nonrival

Question 21

The BEST example of a public good is:

A) legal services.
B) national defence.
C) a municipal library.
D) cable television programming.

Question 22

Although most citizens have access to police protection,they also take measures,such as putting locks on their doors,to protect themselves.For most citizens,police protection is a(n)_____ good,while self-protection is a(n)_____ good.

A) public;private
B) public;artificially scarce
C) private;private
D) artificially scarce;common resource

Question 23

DeVonda owns a music store.One night,vandals broke her store's front window.DeVonda called the police,and the police investigated the crime.The police services that DeVonda used are BEST described as a(n):

A) private good.
B) public good.
C) artificially scarce good.
D) common resource.

Question 24

As a big music fan,you want to attend a weekend blues festival in your town.The purchase of a wristband gives you and thousands of other fans access to the very large outdoor concert pavilion,where you all fit comfortably.The blues festival is a good that has the characteristics of being:

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

Question 25

Public goods differ from common resources in that,while both are _____,public goods are _____,while common resources are _____.

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

Question 26

Bluefin tuna travel in schools throughout the world's oceans.Fishing boats from many nations harvest bluefin tuna as the schools migrate through their national waters.The schools of bluefin tuna are BEST described as a(n):

A) private good.
B) public good.
C) artificially scarce resource.
D) common resource.

Question 27

An electronic book is an artificially scarce good because the private market _____ prevent consumption by people who do not pay for it.Further,the same e-book _____ be consumed by more than one person at the same time.

A) can;can
B) cannot;cannot
C) can;cannot
D) cannot;can

Question 28

The BEST example of an artificially scarce good is:

A) legal services.
B) national defence.
C) a municipal library.
D) cable television programming.

Question 29

National defence and e-books are similar in that both are _____,but they differ in that national defence is _____,while e-books are _____.

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

Question 30

Which example is considered a private good?

A) traffic lights
B) mountain bike trails in a provincial park
C) a fast-food cheeseburger
D) cell phone service

Question 31

The BEST example of common resources is:

A) public education.
B) a football match.
C) fish to catch in a local public lake.
D) cable television programming.

Question 32

Fish in a public lake are common resources because the private market _____ prevent consumption by people who do not pay for access to fish.Further,the same fish _____ be consumed more than once.

A) can;can
B) cannot;cannot
C) can;cannot
D) cannot;can

Question 33

If the market produces an efficient level of a good,then we know that the good must be _____ and _____ in consumption.

A) nonexcludable;nonrival
B) nonexcludable;rival
C) excludable;nonrival
D) excludable;rival

Question 34

National defence and clean air are similar in that both are _____,but they differ in that clean air is _____,while national defence is not.

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

Question 35

If a good has a marginal cost of production of zero and an inefficiently low level of consumption,the good must be a(n):

A) private good.
B) public good.
C) common resource.
D) artificially scarce good.

Question 36

Stephanie stops at a gas station to fill up the tank of her car.The unleaded gasoline in her tank is BEST described as a(n):

A) private good.
B) public good.
C) artificially scarce good.
D) common resource.

Question 37

The BEST example of a good that is excludable in consumption is:

A) a park.
B) an ocean.
C) a bicycle.
D) national defence.

Question 38

When comparing the characteristics of common resources and artificially scarce goods,we find that:

A) they are both nonrival in consumption.
B) they are both excludable.
C) artificially scarce goods are rival in consumption (while common resources are not)and common resources are excludable (while artificially scarce goods are not).
D) common resources are rival in consumption (while artificially scarce goods are not)and artificially scarce goods are excludable (while common resources are not).

Question 39

An artificially scarce good is similar to a public good in that it is _____,but it is also similar to a private good in that it is _____.

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

Question 40

Josh has an iPhone,and he frequently downloads songs from iTunes.He pays a small price for each download,but downloading a song does not remove it from the iTunes inventory,which is available for other buyers.The iTunes service is BEST described as a(n):

A) private good.
B) public good.
C) artificially scarce good.
D) common resource.

Question 41

For nonrival goods like pay-per-view television programmes,the private market will lead to _____ from a social perspective.

A) production of too much of the good
B) consumption of too much of the good
C) consumption of too little of the good
D) outsourcing its production

Question 42

The tendency of people or firms to consume a public good without paying for it is called the free-_____ problem.

A) cost
B) rider
C) goods
D) market

Question 43

When the market does NOT result in an efficient allocation of scarce resources,economists say that there has been:

A) market dropout.
B) normative economics.
C) market disincentives.
D) market failure.

Question 44

For a good to be efficiently provided by the private market,it must be:

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

Question 45

Most neighbourhood streets are illuminated at night by streetlights.The streetlights are _____ and _____.Therefore,they are likely to be _____ by the competitive market.

A) nonrival;nonexcludable;underprovided
B) nonrival;nonexcludable;overprovided
C) rival;excludable;efficiently provided
D) nonrival;excludable;underprovided

Question 46

A software programme is similar to an apple in that it is _____,but it is also similar to public safety in that it is _____.

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

Question 47

The tendency of people to avoid paying for a good's benefits when the benefits can be obtained for free is called the free-_____ problem.

A) cost
B) rider
C) goods
D) market

Question 48

If left to the private market,the amount of police protection provided in a city would be _____ than it is now,and free riders would pay _____ for police protection.

A) more;more
B) more;nothing
C) less;nothing
D) less;a higher price

Question 49

If a good is subject to the free-rider problem and an inefficiently high level of consumption,the good must be a(n):

A) private good.
B) public good.
C) common resource.
D) artificially scarce good.

Question 50

You work in an office and one of your co-workers has announced his retirement.You have offered to purchase the retirement gift,so you place a collection jar in the lunch room for anonymous donations to help pay for the gift.After a week,you find very little money in the jar,so you end up paying for a large share of the retirement gift.You are the victim of the _____ problem.

A) common resource
B) private good
C) overuse of a common resource
D) free-rider

Question 51

For a nonexcludable good like national defence,the private market will lead to _____ of the good.

A) too much production
B) too much consumption
C) too little production
D) the efficient level of consumption

Question 52

An inefficient allocation of resources will occur when:

A) decision makers are faced with the full costs and benefits of their actions.
B) there are clearly defined property rights.
C) no alternative would increase the welfare of society.
D) decision makers are not faced with the full benefits and costs of their choices.

Question 53

When the allocation of resources in a free market environment is such that a different allocation would increase society's welfare,economists say that:

A) market failure has occurred.
B) the efficiency condition is met.
C) decision makers have faced the full marginal benefits and marginal costs of their decisions.
D) producers have maximized total cost.

Question 54

An e-book is similar to a published book in that it is _____,but it is also similar to national defence in that it is _____.

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

Question 55

If a good is subject to the free-rider problem and an inefficiently low level of production when left to the private market,the good must be a(n):

A) private good.
B) public good.
C) illegal good.
D) artificially scarce good.

Question 56

The free-rider problem refers to:

A) the situation in the Old West when land was largely unfenced and riders had unfettered access to private range land.
B) qualifications,or riders,that clients do not request,but which lawyers tend to include in contracts anyway.
C) a variation on the saying "There's no such thing as a free lunch," which is replaced by "There's no such thing as a free ride."
D) lack of incentive for consumers to pay for a nonexcludable good.

Question 57

The free-rider problem is a direct result of:

A) the inability to exclude nonpayers.
B) marginal-cost pricing.
C) full-cost pricing.
D) horizontally summed supply curves.

Question 58

An individual is MOST likely to be a free rider when a good is:

A) private.
B) nonexcludable.
C) nonrival.
D) artificially scarce.

Question 59

A public good is _____ and _____ in consumption.

A) excludable;rival
B) nonexcludable;nonrival
C) excludable;nonrival
D) nonexcludable;rival

Question 60

A key feature of a public good is:

A) overproduction in the private market.
B) rival consumption.
C) payment through charitable contributions.
D) nonexclusion.

Question 61

A public good is a good:

A) whose consumption is nonexcludable and nonrival.
B) for which the marginal cost of adding another consumer is high.
C) that the market will usually provide efficiently.
D) whose consumption is rival.

Question 62

No individual is willing to pay to provide the efficient level of a public good since the:

A) marginal cost of production is zero.
B) good will be nonrival and thus underconsumed.
C) individual's marginal benefit is less than the marginal social benefit.
D) marginal benefit of allowing one more individual to consume the good is zero.

Question 63

Use the following to answer questions :
Figure: Traffic Lights in Tweed,Ontario
(Figure: Traffic Lights in Tweed)Use Figure: Traffic Lights in Tweed.Tweed has 1 000 residents.Each of the residents has the same individual marginal benefit per traffic light.Without government intervention,the town will have _____ traffic lights.

A) 0
B) 4
C) 8
D) 12

Question 64

A characteristic of public goods is that:

A) people pay for them in proportion to the benefits received.
B) the costs of producing them are less than if they were private goods.
C) their benefits cannot be withheld from anyone,regardless of whether a person pays for them.
D) they are produced only by the private sector,not by the public sector.

Question 65

Use the following to answer questions : $$\begin{array}{l}\text { Table: Total Cost and Total Individual Benefit }\\\begin{array} { l c c } \begin{array} { l } \text { Quantity of Animal } \\\text { Control Officers }\end{array} & \text { Total Cost } & \begin{array} { c } \text { Total Individual } \\\text { Benefit }\end{array} \\\hline 0 & \$ 0 & \$ 0 \\1 & 20000 & 40 \\2 & 40000 & 70 \\3 & 60000 & 90 \\4 & 80000 & 100 \\5 & 100000 & 105 \\\hline\end{array}\end{array}$$

-(Table: Total Cost and Total Individual Benefit)Use Table: Total Cost and Total Individual Benefit.Assume that there are 1 000 residents and they all have the same total individual benefit,as shown in the table.If the residents acted together,how many officers would they hire?

A) 0
B) 1
C) 3
D) 5

Question 66

Volunteer fire departments are good examples of the _____ provision of _____.

A) private;private goods
B) public;common resources
C) private;public goods
D) public;artificially scarce goods

Question 67

Some public goods would not be provided without government intervention because the marginal cost of the good:

A) exceeds an individual's marginal benefit.
B) is less than an individual's marginal benefit.
C) would equal an individual's marginal benefit.
D) would need to be maximized.

Question 68

For which type of goods is the marginal social benefit necessarily greater than the marginal private benefit?

A) public goods
B) common resources
C) artificially scarce goods
D) private goods

Question 69

Use the following to answer questions : $$\begin{array}{l}\text { Table: Total Cost and Total Individual Benefit }\\\begin{array} { l c c } \begin{array} { l } \text { Quantity of Animal } \\\text { Control Officers }\end{array} & \text { Total Cost } & \begin{array} { c } \text { Total Individual } \\\text { Benefit }\end{array} \\\hline 0 & \$ 0 & \$ 0 \\1 & 20000 & 40 \\2 & 40000 & 70 \\3 & 60000 & 90 \\4 & 80000 & 100 \\5 & 100000 & 105 \\\hline\end{array}\end{array}$$

-(Table: Total Cost and Total Individual Benefit)Use Table: Total Cost and Total Individual Benefit.If an individual resident were to decide about hiring and paying for animal control officers on his or her own,how many officers would that resident hire?

A) 0
B) 1
C) 3
D) 5

Question 70

Use the following to answer questions : $$\begin{array}{l}\text { Table: Total Cost and Total Individual Benefit }\\\begin{array} { l c c } \begin{array} { l } \text { Quantity of Animal } \\\text { Control Officers }\end{array} & \text { Total Cost } & \begin{array} { c } \text { Total Individual } \\\text { Benefit }\end{array} \\\hline 0 & \$ 0 & \$ 0 \\1 & 20000 & 40 \\2 & 40000 & 70 \\3 & 60000 & 90 \\4 & 80000 & 100 \\5 & 100000 & 105 \\\hline\end{array}\end{array}$$

-(Table: Total Cost and Total Individual Benefit)Use Table: Total Cost and Total Individual Benefit.If there are 1 000 residents and they all have the same total individual benefit,as shown in the table,what is the total social benefit of three animal control officers?

A) $10
B) $9 000
C) $10 000
D) $90 000

Question 71

In the United Kingdom,most public television programming is paid for by a yearly licence fee assessed on every household.Television detection vans go through neighbourhoods to detect unlicensed households and keep them from viewing without paying.This is a good example of the _____ provision of _____.

A) public;private goods
B) public;goods that are made artificially excludable in consumption
C) public;common resources
D) private;artificially scarce goods

Question 72

For a public good,nonpayers _____ excluded from obtaining the benefits of the good.

A) can be
B) are automatically
C) usually are
D) cannot be

Question 73

Suppose that the town of Falls Valley has a mosquito problem.After a bad summer,the town accountants explain that the marginal cost of providing one more treatment for mosquito control is $100 000.The town should provide the additional mosquito control only if the marginal:

A) benefit for any individual citizen is at least $100 000.
B) benefits for all individual citizens add up to at least $100 000.
C) social cost of mosquito control is more than $100 000.
D) social cost of mosquito control is less than $100 000.

Question 74

Use the following to answer questions : $$\begin{array}{l}\text { Table: Total Cost and Total Individual Benefit }\\\begin{array} { l c c } \begin{array} { l } \text { Quantity of Animal } \\\text { Control Officers }\end{array} & \text { Total Cost } & \begin{array} { c } \text { Total Individual } \\\text { Benefit }\end{array} \\\hline 0 & \$ 0 & \$ 0 \\1 & 20000 & 40 \\2 & 40000 & 70 \\3 & 60000 & 90 \\4 & 80000 & 100 \\5 & 100000 & 105 \\\hline\end{array}\end{array}$$

-(Table: Total Cost and Total Individual Benefit)Use Table: Total Cost and Total Individual Benefit.If there are 1 000 residents and they all have the same total individual benefit,as shown in the table,what is the marginal social benefit of the fourth animal control officer?

A) $10
B) $9 000
C) $10 000
D) $90 000

Question 75

The best example of a good whose consumption is NOT excludable is:

A) a yard.
B) a house.
C) a bicycle.
D) national defence.

Question 76

Public goods are NOT sold in efficient quantities in the private marketplace because:

A) once supplied to a buyer,they can be made available at no cost to someone else.
B) the more one person has,the less another person has.
C) they are usually so costly that only the wealthy can afford them.
D) they are usually very poor-quality goods.

Question 77

Public goods should be produced up to the point at which the marginal cost of production equals:

A) the maximum price any individual is willing to pay for that unit.
B) the sum of the individual marginal benefits from all consumers of that unit.
C) zero,which is the marginal cost of allowing another individual to consume the good.
D) the highest marginal benefit from any individual consumer of the good.

Question 78

Which example best illustrates a good whose consumption is NOT excludable?

A) clothing
B) ice cream
C) a taco
D) clean air

Question 79

Since the public safety that a police force provides is _____ in consumption,the efficient price _____.

A) rival;is zero
B) nonrival;is zero
C) rival;equals marginal social benefit
D) nonrival;equals marginal social benefit

Question 80

Which example is considered a public good?

A) school attendance
B) national defence
C) cigarettes
D) a flu shot