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Exam 16: Public Goods and Common Resources

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Question 1

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Use the figure below to answer the following questions. Figure 16.2.1 -Refer to Figure 16.2.1.Curve MB_A is Andrew's marginal benefit curve for a private good and curve MB_B is Betty's marginal benefit curve for the same private good.If Andrew and Betty are the only two consumers in the economy,which point would be on the economy's marginal social benefit curve?

A) price of $20,quantity of 3 units
B) price of $20,quantity of 4 units
C) price of $10,quantity of 4 units
D) price of $30,quantity of 0 units
E) price of $60,quantity of 1 units

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B

Question 2

Multiple Choice

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According to ________ theory,governments make choices that result in an ________ provision of public goods.This outcome occurs in ________.

A) public choice;efficient;political markets in which voters are rationally ignorant
B) social interest;efficient;a perfect political system in which voters are fully informed about the effects of policies
C) social interest;efficient;political markets in which voters are rationally ignorant
D) public choice;inefficient;a perfect political system in which voters are full informed about the effects of policies
E) social interest;inefficient;political markets in which voters are rationally ignorant

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Question 3

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In which of the following cases can the tragedy of the commons occur? I.Cattle grazing on private ranches. II.Catching lobsters off the coast of Florida. III.Raising salmon on salmon farms. IV.Using legal services provided by the courts.

All of the following statements are true except

John receives a marginal benefit of $80 from one satellite.Nick receives a marginal benefit of $50 from one satellite.Christina receives a marginal benefit of $65 from one satellite.John,Nick,and Christina are the only people in the economy What is the economy's marginal social benefit from one satellite?

Sustainable production is

To attract a majority of voters,a political party will

The market for a common resource has no government regulation.At the market equilibrium,

Private goods are

Rational ignorance suggests that

An example of common resource is

Which of the following quotations describes a nonexcludable and nonrival good?

Cable television and air traffic control are similar to each other because both of them are

The economy's demand curve for a public good is obtained by summing the individual

A common resource is

Use the figure below to answer the following question. Figure 16.2.3 -Refer to Figure 16.2.3.The graph provides information about a waste disposal system in a city of 1 million people.If the city installs the efficient capacity,then each person pays ________ in taxes.

Use the figure below to answer the following questions. Figure 16.3.1 -Figure 16.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota that results in the common resource being used efficiently is set at

Your city council is contemplating upgrading its traffic control system and the council believes that the bigger the computer it installs,the better job it can do.Elected officials want to install the scale of the system that will win the most votes.The city bureaucrats want to maximize the budget.Suppose that you are an economist and your job is to calculate the scale of the system that uses resources efficiently.Public choice theory predicts that the quantity chosen will result in ________.As an informed voter,you can attempt to influence the choice of the correct system by encouraging other voters to ________.

The budget of a government department is likely to be efficient if

Use the table below to answer the following questions. Table 16.2.1 -In Table 16.2.1,which of the proposals would be supported by political parties according to the principle of minimum differentiation?