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Exam 11: Public Goods and Common Resources

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Question 211

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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.

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

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Question 212

Multiple Choice

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Both private goods and club goods are

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

E) B) and D)
F) B) and C)

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Question 213

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What particular characteristic do public goods and common resources have in common?

When Rick uses a common resource and diminishes other people's enjoyment of it, he creates

The Tragedy of the Commons occurs because

On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. An overcrowded picnic area is an example of

Goods that are not rival in consumption include both

Which of the following is an example of government intervention to solve a Tragedy of the Commons problem?

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

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

Scenario 11-2 Consider the following goods: • fire-protection services provided by a fire department • a beautiful mural on the outside wall of a fire station • a firefighter's helmet -Refer to Scenario 11-2. Which of these goods is the best example of a private good? Briefly explain.

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Concerts in arenas are not excludable because it is virtually impossible to prevent someone from seeing the show.

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 $900 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Black's like the town to install?

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

What particular characteristic do private goods and common resources have in common?

The goal of requiring licenses for hunting and fishing is

Too few resources are devoted to the creation of knowledge because profit-seeking firms

Figure 11-1 -Refer to Figure 11-1. For which two boxes is it the case that externalities arise because something of value has no price attached to it?

A good that is excludable but not rival is known as a club good.