Question 1

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 D)
F) A) and C)

Question 2

In deciding whether a good is a public good,one must determine the

Accepted Answer

A)   incomes of those who benefit from the good.
B)   value of the external benefits that accrue to resource owners.
C)   excludability of the good.
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 3

Labor is a

Accepted Answer

A)   private good.
B)   club good.
C)   common resource.
D)   public good.E) None of the above
F) A) and C)

Question 4

The Great Lakes are

Accepted Answer

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

Question 5

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

Accepted Answer

A)   Both the American drivers and the Soviet shoppers are consuming products at prices that do not represent the full costs of the products.
B)   Both the American drivers and the Soviet shoppers can purchase as much as they want at the market price.
C)   Both the American drivers and the Soviet shoppers could avoid waiting if the prices were lowered.
D)   American drivers and Soviet shoppers have nothing in common.E) A) and B)
F) B) and C)

Question 6

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Accepted Answer

A)   prohibit parking in the vicinity of the park.
B)   charge higher prices for parking at busy times.
C)   police the parking area and ticket cars that are parked illegally.
D)   do nothing.E) All of the above
F) A) and C)

Question 7

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Accepted Answer

The government assigns and protects the ...

Question 8

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource.To correct for this problem,the town could

Accepted Answer

A)   allow individual shepherds to chose their own flock sizes.
B)   internalize the externality by subsidizing the production of sheep's wool.
C)   auction off a limited number of sheep-grazing permits.
D)   wait until the market corrects the problem.E) A) and D)
F) A) and C)

Question 9

When a good is rival in consumption,

Accepted Answer

A)   one person's use of the good diminishes another person's ability to use it.
B)   people can be prevented from using the good.
C)   an unlimited number of people can use the good at the same time.
D)   everyone will be excluded from obtaining the good.E) All of the above
F) C) and D)

Question 10

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

Accepted Answer

A)   install the walkway because the estimated benefit is twice the cost.
B)   install the walkway because the estimated benefit equals the cost.
C)   not install the walkway, since the cost is twice the estimated benefit.
D)   install the walkway, since the cost of even a single life is too great not to take action.E) All of the above
F) C) and D)

Question 11

Figure 11-1
 
-Refer to Figure 11-1.A tornado siren in a small town 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 12

The idea of requiring motorists to pay to use the busiest streets in a city

Accepted Answer

A)   has been proposed by many public officials, but to date the idea never has been tried in a major city anywhere in the world.
B)   was tried in New York City in the 1990s, but the result was more - not less - congestion on busy streets, and the experiment was short-lived.
C)   reflects the fact that a congested road is a public good.
D)   reflects the fact that a congested road is a common resource.E) A) and D)
F) B) and D)

Question 13

The value and cost of goods are easiest to determine when the goods are

Accepted Answer

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

Question 14

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Accepted Answer

A)   those who stand to gain have an incentive to tell the truth.
B)   those who stand to lose have an incentive to exaggerate their true costs.
C)   answers to the survey questions will always be downwardly biased.
D)   not everyone asked will be using the highway.E) None of the above
F) All of the above

Question 15

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Accepted Answer

A)   taxing the use of the common resource
B)   turning the common resource into a club good
C)   turning the common resource into a private good
D)   regulating the use of the common resourceE) A) and B)
F) A) and C)

Question 16

Which of the following is a disadvantage of government provision of a public good?

Accepted Answer

A)   The government lacks information about what people are willing to pay for the good.
B)   The government does not provide enough of any public good.
C)   The private sector can provide all public goods at a lower cost.
D)   None of the above is a disadvantage.E) C) and D)
F) None of the above

Question 17

Mitch hunts deer.His shotgun is

Accepted Answer

A)   a private good and the deer he hunts are common resources.
B)   a private good and the deer he hunts are public goods.
C)   rival in consumption and the deer he hunts are not rival in consumption.
D)   not rival in consumption and the deer he hunts are not rival in consumption.E) B) and C)
F) C) and D)

Question 18

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 $380 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s) would be opposed to planting any trees?

Accepted Answer

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

Question 19

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 $180 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Johnson's like the town to install?

Accepted Answer

A)   0 streetlights
B)   1 streetlight
C)   2 streetlights
D)   3 streetlightsE) C) and D)
F) All of the above

Question 20

A vacation home in Malibu is

Accepted Answer

A)   not rival in consumption and excludable.
B)   rival in consumption and excludable.
C)   not rival in consumption and not excludable.
D)   rival in consumption and not excludable.E) A) and B)
F) All of the above

Exam 11: Public Goods and Common Resources.

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Correct Answer
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The idea of requiring motorists to pay to use the busiest streets in a city

Correct Answer
verified

Correct Answer
verified

Labor is a

Correct Answer
verified

When a good is rival in consumption,

Correct Answer
verified

Mitch hunts deer.His shotgun is

Correct Answer
verified

In deciding whether a good is a public good,one must determine the

Correct Answer
verified

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource.To correct for this problem,the town could

Correct Answer
verified

Correct Answer
verified

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Correct Answer
verified
The government assigns and protects the ...
View Answer

The value and cost of goods are easiest to determine when the goods are

Correct Answer
verified

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

Correct Answer
verified

The Great Lakes are

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1.A tornado siren in a small town is an example of the type of good represented by Box

Correct Answer
verified

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Correct Answer
verified

A vacation home in Malibu is

Correct Answer
verified

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

Correct Answer
verified

The difference between specific knowledge and general knowledge is that

Correct Answer
verified

Which of the following is a disadvantage of government provision of a public good?

Correct Answer
verified

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Correct Answer
verified

Exam 11: Public Goods and Common Resources.

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Correct AnswerverifiedShow Answer

The idea of requiring motorists to pay to use the busiest streets in a city

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Labor is a

Correct AnswerverifiedShow Answer

When a good is rival in consumption,

Correct AnswerverifiedShow Answer

Mitch hunts deer.His shotgun is

Correct AnswerverifiedShow Answer

In deciding whether a good is a public good,one must determine the

Correct AnswerverifiedShow Answer

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource.To correct for this problem,the town could

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Correct AnswerverifiedThe government assigns and protects the ...View AnswerShow Answer

The value and cost of goods are easiest to determine when the goods are

Correct AnswerverifiedShow Answer

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

Correct AnswerverifiedShow Answer

The Great Lakes are

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1.A tornado siren in a small town is an example of the type of good represented by Box

Correct AnswerverifiedShow Answer

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Correct AnswerverifiedShow Answer

A vacation home in Malibu is

Correct AnswerverifiedShow Answer

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

Correct AnswerverifiedShow Answer

The difference between specific knowledge and general knowledge is that

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of government provision of a public good?

Correct AnswerverifiedShow Answer

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Correct AnswerverifiedShow Answer

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Correct Answer
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The government assigns and protects the ...
View Answer

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