Question 1

It would always be a mistake to view

Accepted Answer

A)   many species of animals as common resources.
B)   a road as a public good.
C)   national defense as a common resource.
D)   a fireworks display as a public good.E) None of the above
F) B) and D)

Question 2

Which of the following statements is true of the tax on gasoline?

Accepted Answer

A)   The cost of collecting a gasoline tax outweighs the revenues raised by the tax.
B)   It is preferred to tolls as the best solution to road congestion.
C)   It discourages driving on noncongested roads,even though there is no congestion externality for these roads.
D)   Both b and c are correct.E) A) and B)
F) A) and C)

Question 3

The difference between specific knowledge and general knowledge is that

Accepted Answer

A)   the creation of general knowledge is usually more profitable for the creator.
B)   specific knowledge is excludable,while general knowledge is not excludable.
C)   general knowledge is excludable,while specific knowledge is not excludable.
D)   general knowledge is rival in consumption,while specific knowledge is not rival in consumption.E) B) and C)
F) None of the above

Question 4

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

Accepted Answer

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.E) A) and B)
F) None of the above

Question 5

Before considering any public project,the government should (i) 
Compare the total cost and total benefits of the project.
(ii) 
Conduct a cost-benefit analysis.
(iii) 
Infer that citizens who vote for a project are willing to pay equally for it.

Accepted Answer

A)   (i) only
B)   (ii) only
C)   (i) and (ii) only
D)   (i) , (ii) ,and (iii) E) All of the above
F) None of the above

Question 6

Roads can be considered either public goods or common resources,depending on how congested they are.

Accepted Answer

A) True 
 B)False

Question 7

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?

Accepted Answer

A)   private goods
B)   club goods
C)   common resources
D)   public goodsE) A) and B)
F) None of the above

Question 8

Elephant populations in some African countries have started to rise because

Accepted Answer

A)   poachers and environmentalists are working together to save the elephants.
B)   new laws make killing elephants and selling their ivory illegal.
C)   some elephants have been made a private good,and people are allowed to kill elephants on their own property.
D)   high ivory taxes make it hard to earn a decent return on elephant tusks.E) C) and D)
F) All of the above

Question 9

Which of the following is an example of the free-rider problem?

Accepted Answer

A)   Both Zoe and Zach receive low-cost dental care at the local dental school,so neither of them pays the full cost of the care.
B)   Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income.Yet his next door neighbor,Alice,is not eligible for the free lunch.
C)   Bruce owns Buster,a large dog who barks whenever anyone walks near his house.Betty lives next to Bruce,and Buster's barking can be heard whenever anyone walks near her house,too.Thus,Betty receives free protection from burglars because of Buster's barking.
D)   Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one,get one free sale.E) C) and D)
F) A) and C)

Question 10

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Accepted Answer

A) True 
 B)False

Question 11

Table 11-1
Three wealthy families - the Johnsons,the Lincolns,and the Washingtons -are the only residents of a certain neighborhood in which the lawns are large and the streets are wide.The three families are considering the placement of one,two,or three elegant statues at entrances to the neighborhood.The table represents the individual families' willingness to pay,that is,the maximum amount that each family is willing to contribute to purchase and erect each statue.
 
-Refer to Table 11-1.Suppose the cost of each statue is $24,000.How many statues should be erected to maximize the total surplus of the three families?

Accepted Answer

A)   0
B)   1
C)   2
D)   3E) A) and D)
F) A) and C)

Question 12

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

Accepted Answer

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.E) A) and B)
F) C) and D)

Question 13

Which of the following statements is not correct?

Accepted Answer

A)   Medical research can be an example of a public good.
B)   The private market will tend to undersupply public goods.
C)   The free-rider problem occurs when a good is nonexcludable.
D)   All goods provided by the government are public goods.E) A) and D)
F) A) and C)

Question 14

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

Accepted Answer

The answer of Drivers have to pay a toll to...

Question 15

The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full,the Sunday Service is

Accepted Answer

A)   a private good.
B)   a public good.
C)   a club good.
D)   a common resource.E) C) and D)
F) A) and B)

Question 16

To achieve the optimal provision of public goods,the

Accepted Answer

A)   market should be allowed to arrive at an equilibrium without government intervention.
B)   government must limit the provision of the goods.
C)   government must tax producers of the goods.
D)   government must either provide the goods or subsidize their production.E) B) and D)
F) C) and D)

Question 17

Table 11-2
Consider a small town with only three families,the Johnson family,the Marshall family,and the Walker 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 $450 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?"

Accepted Answer

A)   1 streetlight
B)   2 streetlights
C)   3 streetlights
D)   4 streetlightsE) B) and D)
F) B) and C)

Question 18

In what sense is it meaningful to say that fighting poverty is a public good?

Accepted Answer

The argument that fighting poverty is a ...

Question 19

A town engineer comes to the city council with a proposal to install a traffic light at a certain intersection that currently has a stop sign.The benefit of the traffic light is increased safety because the light will reduce the incidence of fatal traffic accidents by 50 percent per year.Which of the following statements is correct?

Accepted Answer

A)   The city council should vote to install the traffic light because the benefits will outweigh the costs.
B)   The city council should carefully evaluate the benefits of reduced fatalities against only the explicit costs of the light.
C)   The city council should carefully evaluate the benefits of reduced fatalities against the costs of the light and of the extra time that drivers will spend waiting for a green light.
D)   The costs will invariably outweigh the benefits.E) A) and B)
F) A) and C)

Question 20

In which of the following examples are property rights not well established?

Accepted Answer

A)   Jim chooses to ride his bike to work rather than drive his car.
B)   Groups of students play loud music in the open area between the dorms.
C)   Aniella reads a book on her patio.
D)   Executives discuss corporate strategy in the company boardroom.E) B) and D)
F) All of the above

Exam 11: Public Goods and Common Resources

In which of the following examples are property rights not well established?

Correct Answer
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Correct Answer
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The difference between specific knowledge and general knowledge is that

Correct Answer
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To achieve the optimal provision of public goods,the

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Which of the following statements is true of the tax on gasoline?

Correct Answer
verified

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Correct Answer
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Correct Answer
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Before considering any public project,the government should (i) Compare the total cost and total benefits of the project. (ii) Conduct a cost-benefit analysis. (iii) Infer that citizens who vote for a project are willing to pay equally for it.

Correct Answer
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Which of the following is an example of the free-rider problem?

Correct Answer
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It would always be a mistake to view

Correct Answer
verified

Elephant populations in some African countries have started to rise because

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Roads can be considered either public goods or common resources,depending on how congested they are.

Correct Answer
verified

In what sense is it meaningful to say that fighting poverty is a public good?

Correct Answer
verified
The argument that fighting poverty is a ...
View Answer

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full,the Sunday Service is

Correct Answer
verified

Exam 11: Public Goods and Common Resources

In which of the following examples are property rights not well established?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The difference between specific knowledge and general knowledge is that

Correct AnswerverifiedShow Answer

To achieve the optimal provision of public goods,the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is true of the tax on gasoline?

Correct AnswerverifiedShow Answer

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Before considering any public project,the government should (i) Compare the total cost and total benefits of the project. (ii) Conduct a cost-benefit analysis. (iii) Infer that citizens who vote for a project are willing to pay equally for it.

Correct AnswerverifiedShow Answer

Which of the following is an example of the free-rider problem?

Correct AnswerverifiedShow Answer

It would always be a mistake to view

Correct AnswerverifiedShow Answer

Elephant populations in some African countries have started to rise because

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Roads can be considered either public goods or common resources,depending on how congested they are.

Correct AnswerverifiedShow Answer

In what sense is it meaningful to say that fighting poverty is a public good?

Correct AnswerverifiedThe argument that fighting poverty is a ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full,the Sunday Service is

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The argument that fighting poverty is a ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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