Question 1

A good that is excludable but not rival is known as a club good.

Accepted Answer

A) True 
 B)False

Question 2

The goal of requiring licenses for hunting and fishing is

Accepted Answer

A)   to reduce the use of a common resource.
B)   to ensure that the people hunting and fishing are qualified.
C)   to generate revenue for the government.
D)   to monitor compliance with federal gun laws.E) A) and B)
F) None of the above

Question 3

Markets fail to allocate resources efficiently when

Accepted Answer

A)   demanders and suppliers cannot agree on a price.
B)   goods are rival in consumption and excludable.
C)   property rights are not well established.
D)   too many buyers and sellers exist in the same market.E) All of the above
F) B) and D)

Question 4

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

Question 5

Under which of the following scenarios would a park be considered a common resource?

Accepted Answer

A)   Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables.
B)   Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use.
C)   Visitors can enter the park free of charge and there are always plenty of empty picnic tables.
D)   Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.E) C) and D)
F) All of the above

Question 6

If no one can be prevented from using good x, then good x is one of two types of goods. What are those two types?

Accepted Answer

As described, good x...

Question 7

Figure 11-1

-Refer to Figure 11-1. The box labeled A represents

Accepted Answer

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

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. How many ferry trips would the owner of Store A prefer to have?

Accepted Answer

A)   0
B)   1
C)   2
D)   3E) B) and C)
F) C) and D)

Question 9

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 C)
F) None of the above

Question 10

Who among the following is a free rider?

Accepted Answer

A)   Ernie listens to National Public Radio, but does not contribute to any fundraising efforts.
B)   Bert takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day.
C)   Grover sends his 5 children to a private school rather than to the public school in his neighborhood.
D)   Oscar goes to Elmo's house to watch a football game on the local television channel.E) A) and C)
F) A) and B)

Question 11

One way to eliminate the Tragedy of the Commons is to

Accepted Answer

A)   increase law enforcement in public areas.
B)   limit access to the commons.
C)   increase access to the commons.
D)   decrease taxes.E) All of the above
F) A) and B)

Question 12

National defense is provided by the government because

Accepted Answer

A)   it is impossible for private markets to produce public goods.
B)   products provided by the government are produced more efficiently.
C)   free-riders make it difficult for private markets to supply the socially optimal quantity.
D)   public goods increase government revenues.E) A) and D)
F) A) and B)

Question 13

The Tragedy of the Commons can be corrected by

Accepted Answer

A)   conducting a cost-benefit analysis.
B)   assigning property rights to individuals.
C)   providing government subsidies for the resource.
D)   making certain everyone in the economy has access to the resource.E) A) and D)
F) A) and C)

Question 14

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Accepted Answer

A) True 
 B)False

Question 15

A pair of jeans is rival but non-excludable.

Accepted Answer

A) True 
 B)False

Question 16

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 club good? Briefly explain.

Accepted Answer

The exotic fish in the huge aq...

Question 17

Which of the following represents a potential solution to the problem of environmental pollution?

Accepted Answer

A)   corrective taxes
B)   well established property rights
C)   government regulation
D)   All of the above are correct.E) None of the above
F) All of the above

Question 18

Knowledge is an example of a

Accepted Answer

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

Question 19

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district?

Accepted Answer

A)   Washington, D.C.
B)   Sydney
C)   Tokyo
D)   LondonE) All of the above
F) A) and B)

Question 20

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 C)
F) A) and B)

Exam 11: Public Goods and Common Resources

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district?

Correct Answer
verified

Markets fail to allocate resources efficiently when

Correct Answer
verified

Knowledge is an example of a

Correct Answer
verified

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

Correct Answer
verified

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Correct Answer
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 club good? Briefly explain.

Correct Answer
verified
The exotic fish in the huge aq...
View Answer

National defense is provided by the government because

Correct Answer
verified

The Tragedy of the Commons can be corrected 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

Correct Answer
verified

A pair of jeans is rival but non-excludable.

Correct Answer
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If no one can be prevented from using good x, then good x is one of two types of goods. What are those two types?

Correct Answer
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As described, good x...
View Answer

Correct Answer
verified

Who among the following is a free rider?

Correct Answer
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Under which of the following scenarios would a park be considered a common resource?

Correct Answer
verified

A good that is excludable but not rival is known as a club good.

Correct Answer
verified

Which of the following represents a potential solution to the problem of environmental pollution?

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1. The box labeled A represents

Correct Answer
verified

One way to eliminate the Tragedy of the Commons is to

Correct Answer
verified

The goal of requiring licenses for hunting and fishing is

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district?

Correct AnswerverifiedShow Answer

Markets fail to allocate resources efficiently when

Correct AnswerverifiedShow Answer

Knowledge is an example of a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Correct AnswerverifiedShow Answer

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 club good? Briefly explain.

Correct AnswerverifiedThe exotic fish in the huge aq...View AnswerShow Answer

National defense is provided by the government because

Correct AnswerverifiedShow Answer

The Tragedy of the Commons can be corrected 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

Correct AnswerverifiedShow Answer

A pair of jeans is rival but non-excludable.

Correct AnswerverifiedShow Answer

If no one can be prevented from using good x, then good x is one of two types of goods. What are those two types?

Correct AnswerverifiedAs described, good x...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Who among the following is a free rider?

Correct AnswerverifiedShow Answer

Under which of the following scenarios would a park be considered a common resource?

Correct AnswerverifiedShow Answer

A good that is excludable but not rival is known as a club good.

Correct AnswerverifiedShow Answer

Which of the following represents a potential solution to the problem of environmental pollution?

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1. The box labeled A represents

Correct AnswerverifiedShow Answer

One way to eliminate the Tragedy of the Commons is to

Correct AnswerverifiedShow Answer

The goal of requiring licenses for hunting and fishing is

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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The exotic fish in the huge aq...
View 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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As described, good x...
View 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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