Question 1

A pair of jeans is rival but non-excludable.

Accepted Answer

A) True 
 B)False

Question 2

In determining whether and how much of a public good to provide, cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Accepted Answer

A) True 
 B)False

Question 3

Advocates of antipoverty programs believe that fighting poverty

Accepted Answer

A)   can make everyone better off.
B)   is most successfully accomplished by charities.
C)   is most efficiently accomplished by the market.
D)   reduces the well-being of tax payers.E) None of the above
F) A) and B)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 B)
F) C) and D)

Question 6

What do clean air in New York City and elephants in Africa have in common?

Accepted Answer

A)   They are both common resources.
B)   They are both public goods.
C)   They are both club goods.
D)   Both are excludable.E) All of the above
F) A) and D)

Question 7

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

Question 8

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?

Accepted Answer

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) A) and B)

Question 9

Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?

Accepted Answer

A tornado siren is n...

Question 10

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

Question 11

Pollution is a negative externality, but it is not appropriate to view the problem of pollution as a common-resource problem.

Accepted Answer

A) True 
 B)False

Question 12

The greatest difficulty with cost-benefit analysis of a public project is determining

Accepted Answer

A)   whether government revenue is sufficient to cover the cost of the project.
B)   which contractor should be awarded the project.
C)   the cost of the project.
D)   the value or benefit of the project.E) A) and D)
F) A) and C)

Question 13

When goods do not have a price, which of the following primarily ensures that the good is produced?

Accepted Answer

A)   buyers
B)   sellers
C)   government
D)   the marketE) A) and D)
F) None of the above

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) C) and D)

Question 15

Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach. Seymour wants an efficient way to prevent overcrowding at the beach, so he should require

Accepted Answer

A)   that all beach visitors pay the same entry fee regardless of the day of the week or time of the year.
B)   that the beach limit the number of visitors to 500 per day, without an entry fee.
C)   an entry fee be charged on summer weekend days when many people tend to visit the beach.
D)   that only local residents be admitted to the beach.E) B) and D)
F) B) and C)

Question 16

The free-rider problem

Accepted Answer

A)   forces the supply of a public good to exceed its demand.
B)   results in common resources becoming club goods.
C)   explains why many local governments supply public goods.
D)   results in public goods becoming private goods.E) None of the above
F) A) and B)

Question 17

Which of the following statements is not correct?

Accepted Answer

A)   Common resources are rival in consumption but are not excludable.
B)   Uncongested toll roads are examples of club goods.
C)   When African elephants were privatized, the survival of the species deteriorated.
D)   National defense is not rival in consumption, nor is it excludable.E) B) and D)
F) C) and D)

Question 18

Table 11-3
This table describes the police protection demands for three equal sized groups of people in Safetyville. The second, third, and fourth columns show the number of person-hours of police protection per day that a group will demand for a given price (the first column) . 
-Refer to Table 11-3. What is the value of the 39th unit of police protection in Safetyville?

Accepted Answer

A)   $24
B)   $42
C)   $54
D)   $72E) None of the above
F) B) and C)

Question 19

Which of the following is an example of the free-rider problem?

Accepted Answer

A)   Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care.
B)   Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch.
C)   Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking.
D)   Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale.E) None of the above
F) A) and D)

Question 20

Three business people meet for lunch at an Indian restaurant. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. When the food is delivered to the table, each person faces incentives similar to the

Accepted Answer

A)   consumption of a common resource good.
B)   production of a public good.
C)   consumption of a club good.
D)   production of a private good.E) All of the above
F) A) and D)

Exam 11: Public Goods and Common Resources

In determining whether and how much of a public good to provide, cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Correct Answer
verified

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

Correct Answer
verified

The greatest difficulty with cost-benefit analysis of a public project is determining

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

Which of the following statements is not correct?

Correct Answer
verified

Correct Answer
verified

Which of the following is an example of the free-rider problem?

Correct Answer
verified

Correct Answer
verified

When goods do not have a price, which of the following primarily ensures that the good is produced?

Correct Answer
verified

A pair of jeans is rival but non-excludable.

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

Advocates of antipoverty programs believe that fighting poverty

Correct Answer
verified

Pollution is a negative externality, but it is not appropriate to view the problem of pollution as a common-resource problem.

Correct Answer
verified

Correct Answer
verified

Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach. Seymour wants an efficient way to prevent overcrowding at the beach, so he should require

Correct Answer
verified

The free-rider problem

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

Correct Answer
verified

Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?

Correct Answer
verified
A tornado siren is n...
View Answer

What do clean air in New York City and elephants in Africa have in common?

Correct Answer
verified

Exam 11: Public Goods and Common Resources

In determining whether and how much of a public good to provide, cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The greatest difficulty with cost-benefit analysis of a public project is determining

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

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of the free-rider problem?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When goods do not have a price, which of the following primarily ensures that the good is produced?

Correct AnswerverifiedShow Answer

A pair of jeans is rival but non-excludable.

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

Advocates of antipoverty programs believe that fighting poverty

Correct AnswerverifiedShow Answer

Pollution is a negative externality, but it is not appropriate to view the problem of pollution as a common-resource problem.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach. Seymour wants an efficient way to prevent overcrowding at the beach, so he should require

Correct AnswerverifiedShow Answer

The free-rider problem

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

Correct AnswerverifiedShow Answer

Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?

Correct AnswerverifiedA tornado siren is n...View AnswerShow Answer

What do clean air in New York City and elephants in Africa have in common?

Correct AnswerverifiedShow 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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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
verified
A tornado siren is n...
View Answer

Correct Answer
verified