Question 1

A free-rider problem exists for any good that is not

Accepted Answer

A)  rival in consumption.
B)  a private good.
C)  free.
D)  excludable.E) B) and C)
F) A) and D)

Question 2

Suppose the cost to erect a tornado siren in a small town is $15,000. In addition, suppose the value of a human life is $10 million. By what percentage would the siren need to reduce the risk of a fatality for the benefits of the siren to exceed the costs of the siren?

Accepted Answer

A)  By at least 0.015 percentage points.
B)  By at least 0.15 percentage points.
C)  By at least 1.5 percentage points.
D)  By at least 5 percentage points.E) All of the above
F) A) and B)

Question 3

Figure 11-1 
-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 4

A rather large city has only one fire station, two fire trucks, and four firefighters. Is fire protection in this city characterized by rivalry in consumption?

Accepted Answer

Fire protection in this city is somewher...

Question 5

The commercial value of ivory is a threat to the elephant, but the commercial value of beef is a guardian of the cow. This is because

Accepted Answer

A)  the cow is raised in developed countries, while the elephant lives primarily in less-developed countries.
B)  cows are private goods, while elephants tend to roam freely without owners.
C)  cows and elephants are public goods, but ivory is nonrival.
D)  ivory is nonrival and nonexclusive, but beef is rival and exclusive.E) B) and D)
F) B) and C)

Question 6

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 7

Which two types of goods are excludable?

Accepted Answer

Private go...

Question 8

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

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) All of the above
F) None of the above

Question 10

Figure 11-1 
-Refer to Figure 11-1. The box labeled C represents what type of good?

Accepted Answer

Box C repr...

Question 11

It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that

Accepted Answer

A)  resources would be used more efficiently if the government produced the weapons.
B)  resources would be used more efficiently if private firms provided national defense.
C)  weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable.
D)  national defense is rival in consumption and excludable, but weapons are not rival in consumption and not excludable.E) B) and C)
F) None of the above

Question 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Accepted Answer

A)  basic research.
B)  a congested toll road.
C)  spinach.
D)  clothing.E) B) and D)
F) None of the above

Question 15

Which of the following would be considered a private good?

Accepted Answer

A)  a ferry boat ride to an island with open seating
B)  a public beach
C)  fish in the ocean
D)  a swimming suitE) C) and D)
F) A) and C)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Elephant populations in some African countries have started to rise because

Accepted Answer

A)  environmentalists have developed effective educational campaigns.
B)  the value of ivory has decreased.
C)  some elephants have been made a private good, and people are allowed to kill elephants on their own property.
D)  regulations are being enforced more forcefully.E) A) and B)
F) B) and C)

Question 18

A lighthouse is typically considered to be a public good because

Accepted Answer

A)  the owner of the lighthouse is able to exclude beneficiaries from enjoying the lighthouse.
B)  there is rarely another lighthouse nearby to provide competition.
C)  a nearby port authority cannot avoid paying fees to the lighthouse owner.
D)  all passing ships are able to enjoy the benefits of the lighthouse without paying.E) None of the above
F) A) and B)

Question 19

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Accepted Answer

Eliminating poverty is not a good that t...

Question 20

Goods that are rival in consumption but not excludable would be considered

Accepted Answer

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

Exam 11: Public Goods and Common Resources

Which of the following would be considered a private good?

Correct Answer
verified

A good is excludable if

Correct Answer
verified

Correct Answer
verified

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Correct Answer
verified
Eliminating poverty is not a good that t...
View Answer

A free-rider problem exists for any good that is not

Correct Answer
verified

The commercial value of ivory is a threat to the elephant, but the commercial value of beef is a guardian of the cow. This is because

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

A rather large city has only one fire station, two fire trucks, and four firefighters. Is fire protection in this city characterized by rivalry in consumption?

Correct Answer
verified
Fire protection in this city is somewher...
View Answer

Suppose the cost to erect a tornado siren in a small town is $15,000. In addition, suppose the value of a human life is $10 million. By what percentage would the siren need to reduce the risk of a fatality for the benefits of the siren to exceed the costs of the siren?

Correct Answer
verified

Goods that are rival in consumption but not excludable would be considered

Correct Answer
verified

It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that

Correct Answer
verified

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

Correct Answer
verified

Which two types of goods are excludable?

Correct Answer
verified
Private go...
View Answer

Elephant populations in some African countries have started to rise because

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1. The box labeled C represents what type of good?

Correct Answer
verified
Box C repr...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

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

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

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Correct Answer
verified

A lighthouse is typically considered to be a public good because

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Which of the following would be considered a private good?

Correct AnswerverifiedShow Answer

A good is excludable if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty.

Correct AnswerverifiedEliminating poverty is not a good that t...View AnswerShow Answer

A free-rider problem exists for any good that is not

Correct AnswerverifiedShow Answer

The commercial value of ivory is a threat to the elephant, but the commercial value of beef is a guardian of the cow. This is because

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

A rather large city has only one fire station, two fire trucks, and four firefighters. Is fire protection in this city characterized by rivalry in consumption?

Correct AnswerverifiedFire protection in this city is somewher...View AnswerShow Answer

Suppose the cost to erect a tornado siren in a small town is $15,000. In addition, suppose the value of a human life is $10 million. By what percentage would the siren need to reduce the risk of a fatality for the benefits of the siren to exceed the costs of the siren?

Correct AnswerverifiedShow Answer

Goods that are rival in consumption but not excludable would be considered

Correct AnswerverifiedShow Answer

It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that

Correct AnswerverifiedShow Answer

Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted.

Correct AnswerverifiedShow Answer

Which two types of goods are excludable?

Correct AnswerverifiedPrivate go...View AnswerShow Answer

Elephant populations in some African countries have started to rise because

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1. The box labeled C represents what type of good?

Correct AnswerverifiedBox C repr...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 11-1 -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

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Correct AnswerverifiedShow Answer

A lighthouse is typically considered to be a public good because

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Eliminating poverty is not a good that t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Fire protection in this city is somewher...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Private go...
View Answer

Correct Answer
verified

Correct Answer
verified
Box C repr...
View Answer

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified