Question 1

Figure 11-1 
-Refer to Figure 11-1. Once good x is provided, policymakers need to be concerned about how much of it is used. Good x is an example of the type of good represented by Box

Accepted Answer

A)  A.
B)  B.
C)  C.
D)  D.E) All of the above
F) A) and B)

Question 2

In almost all cases of common resources, the same problem arises as in the Tragedy of the __________.

Accepted Answer

The answer of In almost all cases of common resources,...

Question 3

Which of the following statements is not correct?

Accepted Answer

A)  A free rider is a person who benefits from something for which he or she does not have to pay.
B)  The creation of general knowledge is a public good.
C)  The Tragedy of the Commons illustrates the underuse of a common resource.
D)  A gasoline tax is an imperfect solution to the problem of traffic congestion on public roads.E) C) and D)
F) All of the above

Question 4

Using a toll to reduce traffic when congestion is greatest is an example of a

Accepted Answer

A)  regulation solution.
B)  command-and-control policy.
C)  corrective tax.
D)  Coase theorem solution.E) A) and B)
F) B) and C)

Question 5

Recall the four types of goods. Are national defense and a patented invention the same type of good? Briefly explain.

Accepted Answer

No. National defense...

Question 6

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) C) and D)
F) B) and C)

Question 7

The ocean remains one of the largest unregulated resources for each of the following reasons except

Accepted Answer

A)  many countries have access to the ocean.
B)  it is difficult to get international cooperation among countries that hold different values.
C)  the oceans are so vast that enforcing any agreements would be difficult.
D)  All of the above are reasons the ocean remains one of the largest unregulated resources.E) A) and C)
F) None of the above

Question 8

When a free-rider problem exists,

Accepted Answer

A)  the market will devote too few resources to the production of the good.
B)  the cost of the good will always be more than the benefit of the good.
C)  the good will not be produced.
D)  entrepreneurs will eventually find a way to make free-riders pay their share.E) All of the above
F) A) and B)

Question 9

The Tragedy of the Commons describes

Accepted Answer

A)  government regulation that is necessary to combat externalities.
B)  overuse of a common resource relative to its economically efficient use.
C)  the nonrivalry feature of a common resource.
D)  an effective cost-benefit analysis.E) A) and B)
F) B) and C)

Question 10

Table 11-6
Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning.  ​
​
-Refer to Table 11-6. Suppose the cost to clean the lake is $32 per hour and that the residents have agreed to split the cost of cleaning the lake equally. It would maximize Lydia's surplus if 6 hours of cleaning is done.
​

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  private goods.
B)  club goods.
C)  common resources.
D)  public goods.E) None of the above
F) A) and C)

Question 12

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

Question 13

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Accepted Answer

A) True 
 B)False

Question 14

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

Accepted Answer

A)  over time, the aquifer is likely to be overused.
B)  each farmer has a sufficient incentive to conserve the water.
C)  state governments have an incentive to insure that their farmers do not overuse the water.
D)  resources would be used more efficiently if the government paid for the pumps farmers use to get the water.E) A) and D)
F) B) and D)

Question 15

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)  $330 if there is 1 ferry trip.
B)  $370 if there are 2 ferry trips.
C)  $150 if there are 3 ferry trips.
D)  All of the above are correct.E) None of the above
F) A) and B)

Question 16

For all types of goods that are not private goods, the market fails to allocate resources efficiently because _________________.

Accepted Answer

property rights are not well e...

Question 17

If good x is available free of charge, then

Accepted Answer

A)  good x must be provided by nature.
B)  good x must be provided by the government.
C)  the private market cannot ensure an efficient allocation of resources in the market for good x.
D)  government policy is incapable of increasing total surplus in the market for good x.E) A) and C)
F) A) and B)

Question 18

Without government intervention, public goods tend to be

Accepted Answer

A)  overproduced and common resources tend to be overconsumed.
B)  overproduced and common resources tend to be underconsumed.
C)  underproduced and common resources tend to be overconsumed.
D)  underproduced and common resources tend to be underconsumed.E) A) and C)
F) All of the above

Question 19

Why do elephants face the threat of extinction while cows do not?

Accepted Answer

A)  Cattle are a valuable source of income for many people, while elephants have no market value.
B)  There is a high demand for products that come from cows, whereas there is no demand for products that come from elephants.
C)  There are still lots of cattle that roam free, while all elephants live in zoos.
D)  Cattle are owned by ranchers, while elephants are owned by no one.E) A) and D)
F) B) and C)

Question 20

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) A) and B)
F) A) and D)

Exam 11: Public Goods and Common Resources

Figure 11-1 -Refer to Figure 11-1. Once good x is provided, policymakers need to be concerned about how much of it is used. Good x is an example of the type of good represented by Box

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

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

Correct Answer
verified

The Tragedy of the Commons describes

Correct Answer
verified

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Correct Answer
verified

Why do elephants face the threat of extinction while cows do not?

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
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Correct Answer
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Without government intervention, public goods tend to be

Correct Answer
verified

If good x is available free of charge, then

Correct Answer
verified

Correct Answer
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When a free-rider problem exists,

Correct Answer
verified

For all types of goods that are not private goods, the market fails to allocate resources efficiently because _________________.

Correct Answer
verified
property rights are not well e...
View Answer

Using a toll to reduce traffic when congestion is greatest is an example of a

Correct Answer
verified

The ocean remains one of the largest unregulated resources for each of the following reasons except

Correct Answer
verified

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

Correct Answer
verified

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

Correct Answer
verified

Recall the four types of goods. Are national defense and a patented invention the same type of good? Briefly explain.

Correct Answer
verified
No. National defense...
View Answer

In almost all cases of common resources, the same problem arises as in the Tragedy of the __________.

Correct Answer
verified

The Tragedy of the Commons results when a good is

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Figure 11-1 -Refer to Figure 11-1. Once good x is provided, policymakers need to be concerned about how much of it is used. Good x is an example of the type of good represented by Box

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

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

Correct AnswerverifiedShow Answer

The Tragedy of the Commons describes

Correct AnswerverifiedShow Answer

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Correct AnswerverifiedShow Answer

Why do elephants face the threat of extinction while cows do not?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Without government intervention, public goods tend to be

Correct AnswerverifiedShow Answer

If good x is available free of charge, then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a free-rider problem exists,

Correct AnswerverifiedShow Answer

For all types of goods that are not private goods, the market fails to allocate resources efficiently because _________________.

Correct Answerverifiedproperty rights are not well e...View AnswerShow Answer

Using a toll to reduce traffic when congestion is greatest is an example of a

Correct AnswerverifiedShow Answer

The ocean remains one of the largest unregulated resources for each of the following reasons except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

Correct AnswerverifiedShow Answer

Recall the four types of goods. Are national defense and a patented invention the same type of good? Briefly explain.

Correct AnswerverifiedNo. National defense...View AnswerShow Answer

In almost all cases of common resources, the same problem arises as in the Tragedy of the __________.

Correct AnswerverifiedShow Answer

The Tragedy of the Commons results when a good is

Correct AnswerverifiedShow Answer

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property rights are not well e...
View Answer

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No. National defense...
View Answer

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