Question 1

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Goods that are rival in consumption include both

Accepted Answer

A)  club goods and public goods.
B)  public goods and common resources.
C)  common resources and private goods.
D)  private goods and club goods.E) All of the above
F) A) and B)

Question 4

When a good does not have a __________ attached to it, private markets fail to ensure that the good is produced and consumed in the proper amounts.

Accepted Answer

The answer of When a good does not have a...

Question 5

Who among the following is a free rider?

Accepted Answer

A)  Mike listens to National Public Radio, but does not contribute to any fundraising efforts.
B)  Greg takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day.
C)  Peter sends his five children to a private school rather than to the public school in his neighborhood.
D)  Bobby goes to Marsha's house to watch a basketball game on the local commercial television channel.E) A) and B)
F) B) and C)

Question 6

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.

Accepted Answer

A firefighter's helmet is the ...

Question 7

The U.S. military defends Ngoc from foreign conflict. The fact that Ngoc enjoys this protection does not detract from other Americans' enjoyment of it. For this reason, we say that national defense is

Accepted Answer

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

Question 8

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?

Accepted Answer

A)  Box A and Box B
B)  Box A and Box C
C)  Box B and Box D
D)  Box C and Box DE) All of the above
F) A) and C)

Question 9

Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?

Accepted Answer

Other people, besides the pers...

Question 10

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 11

Private companies are most likely to invest in medical research if

Accepted Answer

A)  they will produce general knowledge.
B)  they will produce a specific product for which they may receive a patent.
C)  there is no government intervention in the market for medical products.
D)  others will benefit from their discoveries.E) B) and C)
F) A) and B)

Question 12

What causes the Tragedy of the Commons?

Accepted Answer

A)  Social and private incentives are the same.
B)  Social and private incentives differ, and common resources are not rival in consumption and are not excludable.
C)  Common resources are not rival in consumption and are not excludable.
D)  Social and private incentives differ, and common resources are not excludable but are rival in consumption.E) A) and B)
F) B) and C)

Question 13

Which of the following goods is rival and excludable?

Accepted Answer

A)  An uncongested toll road
B)  An uncongested nontoll road
C)  A congested nontoll road
D)  A congested toll roadE) B) and D)
F) B) and C)

Question 14

You and your friends eat potato chips in your bedroom. For you and your friends, the potato chips are rival in consumption.

Accepted Answer

A) True 
 B)False

Question 15

Scenario 11-3
Consider the following goods:
• a fish fillet served at a restaurant
• fish in the ocean
• exotic fish in a huge aquarium in a privately-owned building
-Refer to Scenario 11-3. Which of these goods is the best example of a club good? Briefly explain.

Accepted Answer

The exotic fish in the huge aq...

Question 16

When free riders are present in a market, the market generally fails to provide the efficient outcome.

Accepted Answer

A) True 
 B)False

Question 17

What do we mean when we say that a good is rival in consumption?

Accepted Answer

A good is rival in consumption...

Question 18

A toll on a congested road is in essence

Accepted Answer

A)  an interstate highway subsidy.
B)  a hidden tax.
C)  a gasoline tax.
D)  a corrective tax.E) A) and D)
F) A) and C)

Question 19

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Accepted Answer

A) True 
 B)False

Question 20

Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

Accepted Answer

No one owns the wild salmon, while priva...

Exam 11: Public Goods and Common Resources

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

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

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Correct AnswerverifiedShow Answer

Scenario 11-3 Consider the following goods: • a fish fillet served at a restaurant • fish in the ocean • exotic fish in a huge aquarium in a privately-owned building -Refer to Scenario 11-3. Which of these goods is the best example of a club good? Briefly explain.

Correct AnswerverifiedThe exotic fish in the huge aq...View AnswerShow Answer

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.

Correct AnswerverifiedA firefighter's helmet is the ...View AnswerShow Answer

What causes the Tragedy of the Commons?

Correct AnswerverifiedShow Answer

The U.S. military defends Ngoc from foreign conflict. The fact that Ngoc enjoys this protection does not detract from other Americans' enjoyment of it. For this reason, we say that national defense is

Correct AnswerverifiedShow Answer

When a good does not have a __________ attached to it, private markets fail to ensure that the good is produced and consumed in the proper amounts.

Correct AnswerverifiedShow Answer

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

Correct AnswerverifiedShow Answer

When free riders are present in a market, the market generally fails to provide the efficient outcome.

Correct AnswerverifiedShow Answer

Who among the following is a free rider?

Correct AnswerverifiedShow Answer

Goods that are rival in consumption include both

Correct AnswerverifiedShow Answer

Private companies are most likely to invest in medical research if

Correct AnswerverifiedShow Answer

Which of the following goods is rival and excludable?

Correct AnswerverifiedShow Answer

Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

Correct AnswerverifiedNo one owns the wild salmon, while priva...View AnswerShow Answer

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?

Correct AnswerverifiedShow Answer

You and your friends eat potato chips in your bedroom. For you and your friends, the potato chips are rival in consumption.

Correct AnswerverifiedShow Answer

Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?

Correct AnswerverifiedOther people, besides the pers...View AnswerShow Answer

What do we mean when we say that a good is rival in consumption?

Correct AnswerverifiedA good is rival in consumption...View AnswerShow Answer

A toll on a congested road is in essence

Correct AnswerverifiedShow Answer

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

Correct Answer
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Correct Answer
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The exotic fish in the huge aq...
View Answer

Correct Answer
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A firefighter's helmet is the ...
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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No one owns the wild salmon, while priva...
View Answer

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?

Correct Answer
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Correct Answer
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Correct Answer
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Other people, besides the pers...
View Answer

Correct Answer
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A good is rival in consumption...
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Correct Answer
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