Question 1

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Accepted Answer

A) True 
 B)False

Question 2

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 $220 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s)  would be in favor of planting at least 3 trees?

Accepted Answer

A)  only Benitez
B)  only Benitez and Chen
C)  only Benitez, Chen, and Davis
D)  Adams, Benitez, Chen, and Davis

Question 3

Which of the following is not a public good?

Accepted Answer

A)  national defense
B)  patented technological knowledge
C)  general knowledge
D)  the elimination of poverty

Question 4

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

Accepted Answer

Cable TV i...

Question 5

Stewart is a lobsterman. His traps are

Accepted Answer

A)  private goods and the lobster he catches are common resources.
B)  private goods and the lobster he catches are public goods.
C)  rival in consumption and the lobster he catches are not rival in consumption.
D)  not rival in consumption and the lobster he catches are not rival in consumption.

Question 6

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 7

Pay-per-view broadcasts are

Accepted Answer

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

Question 8

Are common resources excludable? Are they rival in consumption?

Accepted Answer

No, common resources...

Question 9

Examples of goods that are excludable include

Accepted Answer

A)  fireworks displays and fire protection.
B)  internet radio subscriptions and knowledge.
C)  premium movie channels and streetlights.
D)  mobile phones and fire protection.

Question 10

Goods that are rival in consumption include both

Accepted Answer

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

Question 11

The national defense of the United States is not excludable because

Accepted Answer

A)  my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States.
B)  my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States.
C)  once the nation is defended, it is impossible to prevent any single person from enjoying the benefit of this defense.
D)  once the nation is defended, it is possible to prevent any single person from enjoying the benefit of this defense.

Question 12

Congressman Smith and Congresswoman Johnson both consider themselves advocates for the national parks and are introducing different bills designed to benefit the parks. Congressman Smith's bill calls for an increase in the entrance fees. Congresswoman Johnson's bill calls for a decrease in the entrance fees. Which of the bills would be more effective at ensuring the quality of the national parks?

Accepted Answer

A)  Congressman Smith's bill because it will reduce the overuse of the parks
B)  Congresswoman Johnson's bill because more visitors means more citizens will value and care for the parks
C)  Both bills would be equally effective.
D)  Neither bill would be effective.

Question 13

Some goods can be classified as either public goods or private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Question 14

Because the benefits of basic research are obvious and easy to measure, it is likely that the public sector pays for the right amount and the right kinds of basic research.

Accepted Answer

A) True 
 B)False

Question 15

A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.

Accepted Answer

A) True 
 B)False

Question 16

When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis

Accepted Answer

A)  are forced to pursue any project in which a single human life is saved.
B)  are likely to make decisions that optimally allocate society's scarce resources.
C)  would not pursue any public project that would not save human life.
D)  would be forced to rely on private markets to provide public goods.

Question 17

Which of the following quotations illustrates the Tragedy of the Commons?

Accepted Answer

A)  "A bird in the hand is worth two in the bush."
B)  "The only difference between the rich and other people is that the rich have more money."
C)  "What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others."
D)  "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head."

Question 18

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 $600 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Brown's like the town to install?

Accepted Answer

A)  0 streetlights
B)  1 streetlight
C)  2 streetlights
D)  3 streetlights

Question 19

In what way do common resources give rise to negative externalities?

Accepted Answer

When one person uses a common ...

Question 20

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.

Exam 11: Public Goods and Common Resources

Because the benefits of basic research are obvious and easy to measure, it is likely that the public sector pays for the right amount and the right kinds of basic research.

Correct Answer
verified

Which of the following quotations illustrates the Tragedy of the Commons?

Correct Answer
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Goods that are rival in consumption include both

Correct Answer
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In what way do common resources give rise to negative externalities?

Correct Answer
verified
When one person uses a common ...
View Answer

A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.

Correct Answer
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Examples of goods that are excludable include

Correct Answer
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Which of the following is not a public good?

Correct Answer
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When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis

Correct Answer
verified

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Correct Answer
verified

Some goods can be classified as either public goods or private goods depending on the circumstances.

Correct Answer
verified

Correct Answer
verified

National defense is provided by the government because

Correct Answer
verified

Stewart is a lobsterman. His traps are

Correct Answer
verified

Correct Answer
verified

Are common resources excludable? Are they rival in consumption?

Correct Answer
verified
No, common resources...
View Answer

The national defense of the United States is not excludable because

Correct Answer
verified

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

Correct Answer
verified
Cable TV i...
View Answer

Pay-per-view broadcasts are

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

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Because the benefits of basic research are obvious and easy to measure, it is likely that the public sector pays for the right amount and the right kinds of basic research.

Correct AnswerverifiedShow Answer

Which of the following quotations illustrates the Tragedy of the Commons?

Correct AnswerverifiedShow Answer

Goods that are rival in consumption include both

Correct AnswerverifiedShow Answer

In what way do common resources give rise to negative externalities?

Correct AnswerverifiedWhen one person uses a common ...View AnswerShow Answer

A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.

Correct AnswerverifiedShow Answer

Examples of goods that are excludable include

Correct AnswerverifiedShow Answer

Which of the following is not a public good?

Correct AnswerverifiedShow Answer

When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis

Correct AnswerverifiedShow Answer

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Correct AnswerverifiedShow Answer

Some goods can be classified as either public goods or private goods depending on the circumstances.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

National defense is provided by the government because

Correct AnswerverifiedShow Answer

Stewart is a lobsterman. His traps are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Are common resources excludable? Are they rival in consumption?

Correct AnswerverifiedNo, common resources...View AnswerShow Answer

The national defense of the United States is not excludable because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedCable TV i...View AnswerShow Answer

Pay-per-view broadcasts are

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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When one person uses a common ...
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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Correct Answer
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Correct Answer
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Correct Answer
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No, common resources...
View Answer

Correct Answer
verified

Correct Answer
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Cable TV i...
View Answer

Correct Answer
verified

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

Correct Answer
verified