Filters
Question type
Study Flashcards

Governments that chose to make endangered elephants private goods have met with more success protecting elephants than governments that chose to make killing elephants illegal.

A) True
B) False

Correct Answer

verifed

verified

Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket. Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers. Which of the following statements is not correct?


A) Use of the beach by the nine new beachgoers will yield a negative externality.
B) The town can reduce the congestion externality by raising the fee to access the beach.
C) An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion.
D) Each of the nine friends would have been better off staying at home.

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

Correct Answer

verifed

verified

When a good is rival in consumption,


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

Correct Answer

verifed

verified

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 private good? Briefly explain.

Correct Answer

verifed

verified

The fish fillet served by the ...

View Answer

When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis


A) are forced to pursue any project in which a single human life is saved.
B) are likely to make decisions that optimally allocate society's scarce resources.
C) would not pursue any public project that would not save human life.
D) would be forced to rely on private markets to provide public goods.

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

Correct Answer

verifed

verified

Both public goods and common resources are


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

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

Figure 11-1 Rival in Consumption? Figure 11-1 Rival in Consumption? -Refer to Figure 11-1. To which of the boxes - A, B, C, or D - does the phenomenon of free riding most clearly apply? Figure 11-1 Rival in Consumption? -Refer to Figure 11-1. To which of the boxes - A, B, C, or D - does the phenomenon of free riding most clearly apply? -Refer to Figure 11-1. To which of the boxes - A, B, C, or D - does the phenomenon of free riding most clearly apply?

Correct Answer

verifed

verified

The phenomenon of fr...

View Answer

What is the main difficulty facing cost-benefit analysts when they attempt to evaluate the worthiness of proposed public projects?

Correct Answer

verifed

verified

The main difficulty is that co...

View Answer

Suppose that you want to build a community garden for your neighborhood, which has 500 residents. The cost of the garden is $2,000, and each person values the garden at $3. After a month, you have only received 75 donations at $3 each. The result is that


A) the local government should build the garden, but you should not.
B) you should still build the garden, but the local government should not.
C) neither you nor the local government should build the garden.
D) either you or the local government should build the garden.

E) All of the above
F) C) and D)

Correct Answer

verifed

verified

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

A) True
B) False

Correct Answer

verifed

verified

An economics professor, upset about the rising cost of textbooks, proposed that his department purchase 50 copies of a statistics book so the students in the statistics class would not have to purchase their own books but rather could borrow a book for the semester and then return it for the next class to use. Which of the following strategies would not prevent a common resource problem with the textbooks?


A) Students will be required to pay a deposit for the textbook, which is refundable at the end of the semester when the book is returned in good condition.
B) The textbooks are placed in a common area of the department so students can borrow and return them as needed.
C) Students must sign a form agreeing to return the book or pay a fine equal to the replacement cost of the book.
D) The textbooks are placed in the professor's office and will only be given to students who are registered members of the class. These students will not receive their final course grades until the books are returned.

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

Correct Answer

verifed

verified

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?


A) reduced travel time during peak hours
B) reduced need for public transportation
C) improved environmental quality
D) improved valuation of a common resource

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

Correct Answer

verifed

verified

Which of the following is not a characteristic of a public good?


A) It is not excludable.
B) It is not diminished or depreciated as additional people consume the good.
C) Its benefits cannot be withheld from anyone.
D) Because it is a free good, there is no opportunity cost.

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

Is a congested nontoll road excludable? Is it rival in consumption? How do we classify a congested nontoll road in terms of the four types of goods?

Correct Answer

verifed

verified

A congested nontoll road is no...

View Answer

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because


A) basic research is not a public good.
B) the benefits of basic research are hard to measure.
C) members of Congress usually have little expertise in science.
D) Both b and c are correct.

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

Correct Answer

verifed

verified

It would always be a mistake to view


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

Correct Answer

verifed

verified

Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. The cost to build the swimming pool is $1,000,000. Which of the following is the most efficient option?


A) The pool should be built and paid for with donations collected from residents, as these donations should more than cover the cost of the pool.
B) The pool should be built and paid for by the town government and paid for with a tax on the residents because all residents would benefit from it but some residents would not donate if they were asked.
C) The pool should be built and paid for by the wealthiest ten percent of the residents.
D) The pool should not be built because the social value does not exceed the cost.

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

Table 11-5 A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip. Table 11-5 A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip. -Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $1,000 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. Which of the following statements is correct? A) The owner of Restaurant 1 would prefer to have 2 ferry trips. B) The owner of Restaurant 2 would prefer to have 1 ferry trip. C) The owners of Stores A and B would prefer to have 0 trips. D) All of the above are correct. -Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $1,000 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. Which of the following statements is correct?


A) The owner of Restaurant 1 would prefer to have 2 ferry trips.
B) The owner of Restaurant 2 would prefer to have 1 ferry trip.
C) The owners of Stores A and B would prefer to have 0 trips.
D) All of the above are correct.

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

The failure of markets to adequately protect the environment can viewed either as a problem of


A) externalities or as a problem of common resources.
B) externalities or as a problem of private goods.
C) the overprovision of public goods or as a problem of the underprovision of private goods.
D) club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity.

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

Goods that are rival in consumption include both


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

Correct Answer

verifed

verified

Showing 321 - 340 of 433

Related Exams

Exam 1

Ten Principles of Economics

439 Questions

Exam 2

Thinking Like an Economist

617 Questions

Exam 3

Interdependence and the Gains From Trade

527 Questions

Exam 4

The Market Forces of Supply and Demand

698 Questions

Exam 5

Elasticity and Its Application

595 Questions

Exam 6

Supply, Demand, and Government Policies

644 Questions

Exam 7

Consumers, Producers, and the Efficiency of Markets

549 Questions

Exam 8

Application: The Costs of Taxation

511 Questions

Exam 9

Application: International Trade

493 Questions

Exam 10

Externalities

524 Questions

Exam 12

The Design of the Tax System

551 Questions

Exam 13

The Costs of Production

420 Questions

Exam 14

Firms in Competitive Markets

543 Questions

Exam 15

Monopoly

637 Questions

Exam 16

Monopolistic Competition

587 Questions

Exam 17

Oligopoly

496 Questions

Exam 18

The Markets for the Factors of Production

564 Questions

Exam 19

Earnings and Discrimination

490 Questions

Exam 20

Income Inequality and Poverty

457 Questions

Exam 21

The Theory of Consumer Choice

440 Questions

Exam 22

Frontiers of Microeconomics

441 Questions

Show Answer