Question 1

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

Accepted Answer

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

Question 2

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

Accepted Answer

A)  fire protection and cable TV.
B)  tornado sirens and basic research.
C)  clean air and clean water.
D)  antipoverty programs and national defense.E) A) and B)
F) A) and C)

Question 3

The Occupational Safety and Health Administration (OSHA)  has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of fertilizer is 0.008. The cost of imposing a regulation that would ban the chemical is $32 million. If the value of a human life is equal to $10 million, how many people must the policy affect in order for the benefits to exceed the costs?

Accepted Answer

A)  256
B)  401
C)  3201
D)  4001E) None of the above
F) All of the above

Question 4

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) B) and C)
F) A) and B)

Question 5

What do we mean when we say that a good is excludable?

Accepted Answer

A good is excludable...

Question 6

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Accepted Answer

Eliminating poverty is not a good that t...

Question 7

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. How many streetlights should the town install to maximize total surplus from the streetlights?

Accepted Answer

A)  1 streetlight
B)  2 streetlights
C)  3 streetlights
D)  4 streetlightsE) None of the above
F) B) and C)

Question 8

Figure 11-1 
-Refer to Figure 11-1. A bottle of soda is an example of the type of good represented by Box

Accepted Answer

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

Question 9

A traffic light at an intersection is

Accepted Answer

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

Question 10

If the use of a common resource is not regulated,

Accepted Answer

A)  no one can enjoy it.
B)  it will tend to be underused.
C)  property rights will be clearly defined.
D)  it will be overused.E) None of the above
F) All of the above

Question 11

Table 11-4
There are four homes along Belmont Circle, which surrounds a small plot of land. The land currently has no trees, and the 4 homeowners -- Adams, Benitez, Chen, and Davis -- are considering the idea of contributing to a pool of money that will be used to plant up to 4 trees. The table represents their willingness to pay, that is, the maximum amount that each homeowner is willing to contribute toward each tree. 
-Refer to Table 11-4. Suppose the cost to plant each tree is $220 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s)  would be in favor of planting at least 3 trees?

Accepted Answer

A)  only Benitez
B)  only Benitez and Chen
C)  only Benitez, Chen, and Davis
D)  Adams, Benitez, Chen, and DavisE) A) and D)
F) A) and C)

Question 12

The Tragedy of the Commons

Accepted Answer

A)  occurs most often with public goods.
B)  is only applicable to shared grazing rights among sheep herders.
C)  is eliminated when property rights are assigned to individuals.
D)  occurs when social incentives are in line with private incentives.E) All of the above
F) B) and C)

Question 13

Which two types of goods are rival in consumption?

Accepted Answer

Private goods and co...

Question 14

A rather large city has only one fire station, two fire trucks, and four firefighters. Is fire protection in this city characterized by rivalry in consumption?

Accepted Answer

Fire protection in this city is somewher...

Question 15

A common theme among examples of market failure is

Accepted Answer

A)  the good being provided harms society in some systematic way.
B)  some item of value does not have an owner with the legal authority to control it.
C)  cost-benefit analysis will show that private markets should provide the goods and services.
D)  government intervention decreases the social benefits.E) A) and B)
F) C) and D)

Question 16

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Accepted Answer

A) True 
 B)False

Question 17

Recall the four types of goods. Are national defense and basic research the same type of good? Briefly explain.

Accepted Answer

Yes. Both national d...

Question 18

A stairwell in a certain office building is always congested at 12:00 p.m. and 1:00 p.m. The congestion is so bad that people have been complaining to the building's owner. Which of the following methods would be the most efficient way of reducing congestion?

Accepted Answer

A)  Assign each person in the building a time when they are allowed to use the stairwell.
B)  Encourage people to voluntarily keep off the stairwell during peak times.
C)  Charge everyone who uses the stairwell when it is congested the same fee. People who value the use of the stairs the most will be the ones who use the stairwell at peak times.
D)  Hold a lottery to determine who wins the right to use the stairwell at peak times.E) C) and D)
F) All of the above

Question 19

Figure 11-1 
-Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Accepted Answer

A)  Box A, which represents private goods.
B)  Box B, which represents common resources.
C)  Box C, which represents common resources.
D)  Box D, which represents public goods.E) A) and D)
F) A) and C)

Question 20

For private goods allocated in markets,

Accepted Answer

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

Exam 11: Public Goods and Common Resources

Which two types of goods are rival in consumption?

Correct Answer
verified
Private goods and co...
View Answer

Recall the four types of goods. Are national defense and basic research the same type of good? Briefly explain.

Correct Answer
verified
Yes. Both national d...
View Answer

Figure 11-1 -Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Correct Answer
verified

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1. A bottle of soda is an example of the type of good represented by Box

Correct Answer
verified

Correct Answer
verified

If the use of a common resource is not regulated,

Correct Answer
verified

A stairwell in a certain office building is always congested at 12:00 p.m. and 1:00 p.m. The congestion is so bad that people have been complaining to the building's owner. Which of the following methods would be the most efficient way of reducing congestion?

Correct Answer
verified

A common theme among examples of market failure is

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

For private goods allocated in markets,

Correct Answer
verified

Correct Answer
verified

A rather large city has only one fire station, two fire trucks, and four firefighters. Is fire protection in this city characterized by rivalry in consumption?

Correct Answer
verified
Fire protection in this city is somewher...
View Answer

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Correct Answer
verified
Eliminating poverty is not a good that t...
View Answer

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

Correct Answer
verified

A traffic light at an intersection is

Correct Answer
verified

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

Correct Answer
verified

What do we mean when we say that a good is excludable?

Correct Answer
verified
A good is excludable...
View Answer

The Tragedy of the Commons

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Which two types of goods are rival in consumption?

Correct AnswerverifiedPrivate goods and co...View AnswerShow Answer

Recall the four types of goods. Are national defense and basic research the same type of good? Briefly explain.

Correct AnswerverifiedYes. Both national d...View AnswerShow Answer

Figure 11-1 -Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Correct AnswerverifiedShow Answer

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1. A bottle of soda is an example of the type of good represented by Box

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the use of a common resource is not regulated,

Correct AnswerverifiedShow Answer

A stairwell in a certain office building is always congested at 12:00 p.m. and 1:00 p.m. The congestion is so bad that people have been complaining to the building's owner. Which of the following methods would be the most efficient way of reducing congestion?

Correct AnswerverifiedShow Answer

A common theme among examples of market failure is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For private goods allocated in markets,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A rather large city has only one fire station, two fire trucks, and four firefighters. Is fire protection in this city characterized by rivalry in consumption?

Correct AnswerverifiedFire protection in this city is somewher...View AnswerShow Answer

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Correct AnswerverifiedEliminating poverty is not a good that t...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

A traffic light at an intersection is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What do we mean when we say that a good is excludable?

Correct AnswerverifiedA good is excludable...View AnswerShow Answer

The Tragedy of the Commons

Correct AnswerverifiedShow Answer

Correct Answer
verified
Private goods and co...
View Answer

Correct Answer
verified
Yes. Both national d...
View 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
verified
Fire protection in this city is somewher...
View Answer

Correct Answer
verified
Eliminating poverty is not a good that t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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A good is excludable...
View Answer

Correct Answer
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