Question 1

A television broadcast is an example of a good that is

Accepted Answer

A)   private.
B)   not rival in consumption.
C)   social.
D)   normal.

Question 2

Which of the following is most likely to face extinction?

Accepted Answer

A)   dogs living as pets in households
B)   dairy cows living on farms and producing milk
C)   bald eagles living in zoos
D)   tigers living in the wild

Question 3

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 4

Which of the following is a disadvantage of government provision of a public good such as national defense?

Accepted Answer

A)   (i)  only
B)   (i)  and (ii)  only
C)   (i)  and (iii)  only
D)   (i) , (ii) , and (iii)

Question 5

As with many public goods, determining the appropriate level of government support for the production of general knowledge is difficult because

Accepted Answer

A)   patents correct for an unknown portion of the externality.
B)   benefits are hard to measure.
C)   members of Congress are often experts in the sciences.
D)   the costs always exceed the benefits.

Question 6

Four friends decide to meet at a Chinese restaurant for dinner. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. A Tragedy of the Commons problem is likely for each of the following reasons except

Accepted Answer

A)   each person has an incentive to eat as fast as possible since their individual rate of consumption will not affect their individual cost.
B)   there is an externality associated with eating the food on the table.
C)   when one person eats, he may not take into account how his choice affects his friends.
D)   each dish would be both excludable and rival in consumption.

Question 7

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.

Question 8

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

Accepted Answer

A)   Both the American drivers and the Soviet shoppers are consuming products at prices that do not represent the full costs of the products.
B)   Both the American drivers and the Soviet shoppers can purchase as much as they want at the market price.
C)   Both the American drivers and the Soviet shoppers could avoid waiting if the prices were lowered.
D)   American drivers and Soviet shoppers have nothing in common.

Question 9

A common theme among examples of market failure is

Accepted Answer

A)   the good being provided harms society in some systematic way.
B)   some item of value does not have an owner with the legal authority to control it.
C)   cost-benefit analysis will show that private markets should provide the goods and services.
D)   government intervention decreases the social benefits.

Question 10

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.

Question 11

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

Accepted Answer

A)   regulating the use or consumption of the common resource.
B)   taxing the use or consumption of the common resource.
C)   selling the common resource to a private entity.
D)   asking individuals to voluntarily reduce their use of the resource.

Question 12

Goods that are not excludable include both

Accepted Answer

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

Question 13

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

Accepted Answer

A) True 
 B)False

Question 14

Tolls are not effective in altering people's incentives to drive during rush hour.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Which of the following goods is rival in consumption and excludable?

Accepted Answer

A)   a fireworks display
B)   national defense
C)   a box of sparklers
D)   a parade

Question 17

The Tragedy of the Commons

Accepted Answer

A)   occurs most often with public goods.
B)   is only applicable to shared grazing rights among sheep herders.
C)   is eliminated when property rights are assigned to individuals.
D)   occurs when social incentives are in line with private incentives.

Question 18

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes   No
-Refer to Figure 11-1. To which of the boxes - A, B, C, or D - does the phenomenon of free riding most clearly apply?

Accepted Answer

The phenomenon of fr...

Question 19

Knowledge is an example of a

Accepted Answer

A)   public good.
B)   private good.
C)   common resource.
D)   club good.

Question 20

A New York legislator wanted to create a deposit on cigarettes butts. If implemented, people would have the incentive to (1)  not toss cigarette butts onto public streets and sidewalks, and (2)  pick butts up to redeem them for the cash. The degradation of the environment from littered cigarette butts is a

Accepted Answer

A)   private goods problem.
B)   Nash equilibrium.
C)   Tragedy of the Commons.
D)   cost-benefit equilibrium.

Exam 11: Public Goods and Common Resources

Correct Answer
verified

Which of the following goods is rival in consumption and excludable?

Correct Answer
verified

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

Correct Answer
verified

A common theme among examples of market failure is

Correct Answer
verified

Knowledge is an example of a

Correct Answer
verified

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

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct Answer
verified

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

Correct Answer
verified

Which of the following is a disadvantage of government provision of a public good such as national defense?

Correct Answer
verified

Correct Answer
verified

A television broadcast is an example of a good that is

Correct Answer
verified

Goods that are not excludable include both

Correct Answer
verified

A good is excludable if

Correct Answer
verified

Which of the following is most likely to face extinction?

Correct Answer
verified

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

Correct Answer
verified

The Tragedy of the Commons describes

Correct Answer
verified

As with many public goods, determining the appropriate level of government support for the production of general knowledge is difficult because

Correct Answer
verified

The Tragedy of the Commons

Correct Answer
verified

Stewart is a lobsterman. His traps are

Correct Answer
verified

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. To which of the boxes - A, B, C, or D - does the phenomenon of free riding most clearly apply?

Correct Answer
verified
The phenomenon of fr...
View Answer

Exam 11: Public Goods and Common Resources

Correct AnswerverifiedShow Answer

Which of the following goods is rival in consumption and excludable?

Correct AnswerverifiedShow Answer

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

Correct AnswerverifiedShow Answer

A common theme among examples of market failure is

Correct AnswerverifiedShow Answer

Knowledge is an example of a

Correct AnswerverifiedShow Answer

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

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct AnswerverifiedShow Answer

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of government provision of a public good such as national defense?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A television broadcast is an example of a good that is

Correct AnswerverifiedShow Answer

Goods that are not excludable include both

Correct AnswerverifiedShow Answer

A good is excludable if

Correct AnswerverifiedShow Answer

Which of the following is most likely to face extinction?

Correct AnswerverifiedShow Answer

What do American drivers on congested roads and Soviet shoppers waiting in line to purchase clothing have in common?

Correct AnswerverifiedShow Answer

The Tragedy of the Commons describes

Correct AnswerverifiedShow Answer

As with many public goods, determining the appropriate level of government support for the production of general knowledge is difficult because

Correct AnswerverifiedShow Answer

The Tragedy of the Commons

Correct AnswerverifiedShow Answer

Stewart is a lobsterman. His traps are

Correct AnswerverifiedShow Answer

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. To which of the boxes - A, B, C, or D - does the phenomenon of free riding most clearly apply?

Correct AnswerverifiedThe phenomenon of fr...View AnswerShow Answer

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The phenomenon of fr...
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