Question 1

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

Accepted Answer

A) True 
 B)False

Question 2

In the Tragedy of the Commons parable, if the medieval townspeople had foreseen the tragedy, then they could have dealt with the problem in much the same way that modern society deals with

Accepted Answer

A)   fire protection.
B)   poverty.
C)   pollution.
D)   national defense.E) A) and B)
F) C) and D)

Question 3

Goods that are not excludable include both

Accepted Answer

A)   private goods and public goods.
B)   club goods and common resources.
C)   common resources and public goods.
D)   private goods and club goods.E) B) and C)
F) A) and C)

Question 4

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 5

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

Question 6

The Tragedy of the Commons results when a good is

Accepted Answer

A)   rival in consumption and not excludable.
B)   excludable and not rival in consumption.
C)   both rival in consumption and excludable.
D)   neither rival in consumption nor excludable.E) B) and C)
F) B) and D)

Question 7

Excessive fishing occurs because

Accepted Answer

A)   each individual fisherman has little incentive to maintain the species for the next year.
B)   fishermen rely on government managers to worry about fish populations.
C)   fishermen are unionized, so they are not concerned with externalities.
D)   fishermen have other marketable skills and do not fear exploitation of fish reserves.E) A) and D)
F) C) and D)

Question 8

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

Accepted Answer

A)   The lack of a fireworks display in Yankeeville arises because of an externality.
B)   The lack of a fireworks display in Yankeeville is a case of market failure.
C)   In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient.
D)   All of the above are correct.E) A) and C)
F) All of the above

Question 9

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is not excludable and not rival in consumption?

Accepted Answer

A)   tablet computer, gym membership at a gym that always has plenty of open equipment and classes
B)   tablet computer, national defense
C)   congested nontoll road, national defense
D)   online music subscription, streetlightE) None of the above
F) All of the above

Question 10

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

Accepted Answer

A) True 
 B)False

Question 11

The government often intervenes when private markets fail to provide an optimal level of certain goods and services.
For example, the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another. Why might the private market not reach the socially optimal level of traffic without the help of government?

Accepted Answer

It is possible that everyone can agree t...

Question 12

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

Question 13

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Accepted Answer

A) True 
 B)False

Question 14

If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a

Accepted Answer

A)   budget analysis.
B)   project analysis.
C)   reimbursement analysis.
D)   cost-benefit analysis.E) B) and D)
F) A) and B)

Question 15

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?

Accepted Answer

A)   Lobsters are rival but not excludable.
B)   The lobster population is an example of the tragedy of the commons.
C)   Reducing the quota on the number of lobsters any fisher can catch would have a protective effect on the lobster population.
D)   If left unregulated, the lobster population will likely increase.E) None of the above
F) B) and D)

Question 16

Scenario 11-1
Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late.
-Refer to Scenario 11-1. Suppose Becky lives in a city with an optional toll lane that assures a drive at the posted speed limit. She leaves her office at 5:00 for her usual 30 minute commute but hears on the radio that if she drives in the non-toll lanes, her commute will take 1 hour due to an accident. Becky should

Accepted Answer

A)   call the daycare and tell them to expect her at 6:00.
B)   choose to drive in the free-flowing toll lane as long as the toll is less than $10.
C)   choose to drive in the free-flowing toll lane as long as the toll is less than $30.
D)   choose to drive an alternate route to try to avoid some of the traffic.E) B) and C)
F) A) and B)

Question 17

A good is excludable if

Accepted Answer

A)   one person's use of the good diminishes another person's enjoyment of it.
B)   the government can regulate its availability.
C)   it is not a normal good.
D)   people can be prevented from using it.E) C) and D)
F) B) and C)

Question 18

Private goods are both

Accepted Answer

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

Question 19

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

Accepted Answer

A)   Without prices, it is difficult to be sure how much people really value a good.
B)   Analysts can't be sure that the respondents to surveys are telling the truth.
C)   Analysis must include not only the cost of building the project but also the cost of maintenance, if any.
D)   People value goods differently if they are publicly provided rather than privately provided.E) All of the above
F) A) and C)

Question 20

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Accepted Answer

A)   drive at times other than rush hour.
B)   use public transit rather than driving.
C)   drive more fuel-efficient cars.
D)   car-pool.E) None of the above
F) B) and C)

Exam 11: Public Goods and Common Resources

The Tragedy of the Commons results when a good is

Correct Answer
verified

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Correct Answer
verified

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
verified

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Correct Answer
verified

For private goods allocated in markets,

Correct Answer
verified

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

Correct Answer
verified

In the Tragedy of the Commons parable, if the medieval townspeople had foreseen the tragedy, then they could have dealt with the problem in much the same way that modern society deals with

Correct Answer
verified

Goods that are not excludable include both

Correct Answer
verified

Excessive fishing occurs because

Correct Answer
verified

A good is excludable if

Correct Answer
verified

Correct Answer
verified

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

Correct Answer
verified

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

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

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is not excludable and not rival in consumption?

Correct Answer
verified

If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a

Correct Answer
verified

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?

Correct Answer
verified

Private goods are both

Correct Answer
verified

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

Correct Answer
verified

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

Correct Answer
verified

Correct Answer
verified
It is possible that everyone can agree t...
View Answer

Exam 11: Public Goods and Common Resources

The Tragedy of the Commons results when a good is

Correct AnswerverifiedShow Answer

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Correct AnswerverifiedShow 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

All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable.

Correct AnswerverifiedShow Answer

For private goods allocated in markets,

Correct AnswerverifiedShow Answer

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

In the Tragedy of the Commons parable, if the medieval townspeople had foreseen the tragedy, then they could have dealt with the problem in much the same way that modern society deals with

Correct AnswerverifiedShow Answer

Goods that are not excludable include both

Correct AnswerverifiedShow Answer

Excessive fishing occurs because

Correct AnswerverifiedShow Answer

A good is excludable if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

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

Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is not excludable and not rival in consumption?

Correct AnswerverifiedShow Answer

If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a

Correct AnswerverifiedShow Answer

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Private goods are both

Correct AnswerverifiedShow Answer

You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption.

Correct AnswerverifiedShow Answer

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIt is possible that everyone can agree t...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
It is possible that everyone can agree t...
View Answer