Question 1

What particular characteristic do private goods and club goods have in common?

Accepted Answer

Private go...

Question 2

Table 11-2
Consider a small town with only three families, the Greene family, the Brown family, and the Black 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 $900 and the families have agreed to split the cost of installing the streetlights equally. If the residents choose to install the number of streetlights that will maximize total surplus from the streetlights, how much total surplus will the Greene family receive?

Accepted Answer

A)   -$40
B)   $0
C)   $40
D)   $60E) C) and D)
F) B) and C)

Question 3

Elephants are endangered, but cows are not because

Accepted Answer

A)   cows are not as valuable as elephants.
B)   elephants are a common resource, while cows are private goods.
C)   cows are a common resource, while elephants are private goods.
D)   it is legal to kill cows but not elephants.E) All of the above
F) A) and C)

Question 4

Roads can be considered either public goods or common resources, depending on how congested they are.

Accepted Answer

A) True 
 B)False

Question 5

A New York legislator wanted to create a deposit on cigarettes butts. If implemented, people would have the incentive to (1)  not toss cigarette butts onto public streets and sidewalks, and (2)  pick butts up to redeem them for the cash. The degradation of the environment from littered cigarette butts is a

Accepted Answer

A)   private goods problem.
B)   Nash equilibrium.
C)   Tragedy of the Commons.
D)   cost-benefit equilibrium.E) C) and D)
F) B) and D)

Question 6

The U.S. government protects fish, a common resource, by

Accepted Answer

A)   subsidizing the fishing industry.
B)   heavily taxing competing industries.
C)   selling fishing licenses and regulating fish lengths.
D)   None of the above is correct.E) A) and B)
F) All of the above

Question 7

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 8

Figure 11-1
Rival in Consumption?
  
-Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Accepted Answer

Clean air is a commo...

Question 9

Which of the following is not a reason why government agencies subsidize basic research?

Accepted Answer

A)   The private market devotes too few resources to basic research.
B)   The general knowledge developed through basic research can be used without charge.
C)   The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies.
D)   The government wants to attract the brightest researchers away from private research firms.E) None of the above
F) C) and D)

Question 10

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 $750. Then total surplus for the 4 business owners is

Accepted Answer

A)   $750 if there is 1 ferry trip.
B)   $40 if there are 2 ferry trips.
C)   $150 if there are 3 ferry trips.
D)   -$400 if there are 4 ferry trips.E) None of the above
F) A) and B)

Question 11

Governments can grant private property rights over resources that were previously viewed as public, such as fish or elephants. Why would governments want to do so?

Accepted Answer

A)   to prevent overuse
B)   to decrease taxes
C)   to fight poverty
D)   to increase consumptionE) A) and B)
F) C) and D)

Question 12

The Great Lakes are

Accepted Answer

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

Question 13

Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

Accepted Answer

A)   overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
B)   overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.
C)   understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
D)   understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.E) C) and D)
F) A) and B)

Question 14

Which of the following statements is not correct?

Accepted Answer

A)   Medical research can be an example of a public good.
B)   The private market will tend to undersupply public goods.
C)   The free-rider problem occurs when a good is nonexcludable.
D)   All goods provided by the government are public goods.E) A) and B)
F) A) and C)

Question 15

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Accepted Answer

A)   Elephants live in Africa, whereas cows live in the United States.
B)   Elephants are a common resource.
C)   Cows are a common resource.
D)   Cows are a public good.E) B) and D)
F) C) and D)

Question 16

A cable television broadcast of a movie is

Accepted Answer

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

Question 17

Goods that are not rival in consumption include both

Accepted Answer

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

Question 19

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

Question 20

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000. The walkway is expected to reduce the risk of fatality by 1.5 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)   be indifferent between installing and not installing 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) A) and B)
F) A) and C)

Exam 11: Public Goods and Common Resources

Correct Answer
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Elephants are endangered, but cows are not because

Correct Answer
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Figure 11-1 Rival in Consumption? -Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Correct Answer
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Clean air is a commo...
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Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Correct Answer
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Roads can be considered either public goods or common resources, depending on how congested they are.

Correct Answer
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The Great Lakes are

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Which of the following is not a reason why government agencies subsidize basic research?

Correct Answer
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The U.S. government protects fish, a common resource, by

Correct Answer
verified

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000. The walkway is expected to reduce the risk of fatality by 1.5 percent, and the cost of a human life is estimated at $10 million. The town should

Correct Answer
verified

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

Correct Answer
verified

A cable television broadcast of a movie is

Correct Answer
verified

Governments can grant private property rights over resources that were previously viewed as public, such as fish or elephants. Why would governments want to do so?

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

Correct Answer
verified

What particular characteristic do private goods and club goods have in common?

Correct Answer
verified
Private go...
View 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 Answer
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Correct Answer
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Goods that are not rival in consumption include both

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Correct AnswerverifiedShow Answer

Elephants are endangered, but cows are not because

Correct AnswerverifiedShow Answer

Figure 11-1 Rival in Consumption? -Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Correct AnswerverifiedClean air is a commo...View AnswerShow Answer

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Correct AnswerverifiedShow Answer

Roads can be considered either public goods or common resources, depending on how congested they are.

Correct AnswerverifiedShow Answer

The Great Lakes are

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Which of the following is not a reason why government agencies subsidize basic research?

Correct AnswerverifiedShow Answer

The U.S. government protects fish, a common resource, by

Correct AnswerverifiedShow Answer

Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000. The walkway is expected to reduce the risk of fatality by 1.5 percent, and the cost of a human life is estimated at $10 million. The town should

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A cable television broadcast of a movie is

Correct AnswerverifiedShow Answer

Governments can grant private property rights over resources that were previously viewed as public, such as fish or elephants. Why would governments want to do so?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

Correct AnswerverifiedShow Answer

What particular characteristic do private goods and club goods have in common?

Correct AnswerverifiedPrivate go...View AnswerShow 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

Correct AnswerverifiedShow Answer

Goods that are not rival in consumption include both

Correct AnswerverifiedShow Answer

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Correct Answer
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Clean air is a commo...
View Answer

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Correct Answer
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Private go...
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