Question 1

To achieve the optimal provision of public goods,the

Accepted Answer

A)   market should be allowed to arrive at an equilibrium without government intervention.
B)   government must limit the provision of the goods.
C)   government must tax producers of the goods.
D)   government must either provide the goods or subsidize their production.E) A) and B)
F) A) and C)

Question 2

An AM radio transmission of a baseball game is

Accepted Answer

A)   excludable and rival in consumption.
B)   excludable and not rival in consumption.
C)   not excludable and rival in consumption.
D)   not excludable and not rival in consumption.E) A) and C)
F) All of the above D

Question 3

Private companies will invest in medical research if

Accepted Answer

A)   they will produce general knowledge.
B)   they will produce a specific product for which they may receive a patent.
C)   there is no government intervention in the market for medical products.
D)   others will benefit from their discoveries.E) None of the above
F) B) and D) B

Question 4

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

Accepted Answer

A)   install the walkway because the estimated benefit is twice the cost.
B)   install the walkway because the estimated benefit equals the cost.
C)   not install the walkway,since the cost is twice the estimated benefit.
D)   install the walkway,since the cost of even a single life is too great not to take action.E) A) and B)
F) B) and D)

Question 5

Which of the following represents a potential solution to the problem of environmental pollution?

Accepted Answer

A)   corrective taxes
B)   well established property rights
C)   government regulation
D)   All of the above are correct.E) None of the above
F) All of the above

Question 6

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time-share condominium in Alta,Utah.Suppose that the lift lines at the ski resort become more congested when the ten additional people start to ski.Which of the following statements is not correct?

Accepted Answer

A)   Use of the ski resort by the ten new skiers will yield a negative externality.
B)   The ski resort can reduce the congestion externality by raising lift ticket prices.
C)   An increase in lift ticket prices could be viewed as a corrective tax on the externality of congestion.
D)   Each of the ten friends would have been better off staying at home.E) All of the above
F) B) and C)

Question 7

Which of the following is a disadvantage of government provision of a public good such as national defense? (i) The government does not know the exact willingness of consumers to pay for the public good.
(ii) The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good.
(iii) Taxpayers do not agree on the optimal quantity of the public good that the government should provide.

Accepted Answer

A)   (i) only
B)   (i) and (ii) only
C)   (i) and (iii) only
D)   (i) ,(ii) ,and (iii) E) All of the above
F) B) and C)

Question 8

If a road is congested,then use of that road by an additional person would lead to a

Accepted Answer

A)   negative externality.
B)   positive externality.
C)   Pigovian externality.
D)   free-rider problem with rush hour drivers stuck in traffic.E) A) and B)
F) None of the above

Question 9

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 C)
F) All of the above

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Consider the following problems: overcrowded public highways,overfishing in the ocean,polluted air,and the near-extinction of the wild rhinoceros.What do these problems have in common?

Accepted Answer

A)   Private markets could easily solve them if governments left the markets alone.
B)   They would all go away if the government sponsored an intensive public-information campaign.
C)   They are all the result of a failure to establish clear property rights over something of value.
D)   They are all the result of a failure of corrective taxes.E) A) and D)
F) B) and C)

Question 12

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.E) A) and B)
F) C) and D)

Question 13

When goods do not have a price,which of the following primarily ensures that the good is produced?

Accepted Answer

A)   buyers
B)   sellers
C)   government
D)   the marketE) A) and D)
F) B) and C)

Question 14

Figure 11-1
 
-Refer to Figure 11-1.A ham sandwich is an example of the type of good represented by Box

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   D.E) A) and C)
F) A) and B)

Question 15

Table 11-3
This table describes the defense demands for three equal sized groups of people in Nirvanaville.The second,third,and fourth column shows the quantity that a group will demand for a given price (the first column) .
 
-Refer to Table 11-3.If the marginal cost of national defense is constant at $12 per unit,what is the efficient level of national defense to provide?

Accepted Answer

A)   3 units
B)   13 units
C)   22 units
D)   33 unitsE) A) and B)
F) None of the above C

Question 16

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Accepted Answer

A)   taxing the use of the common resource
B)   turning the common resource into a club good
C)   turning the common resource into a private good
D)   regulating the use of the common resourceE) A) and B)
F) None of the above

Question 17

If the government decides to build a new highway,the first step would be to conduct a study to determine the value of the project.The study is called a

Accepted Answer

A)   fiscal analysis.
B)   monetary analysis.
C)   welfare analysis.
D)   cost-benefit analysis.E) B) and C)
F) All of the above

Question 18

Property rights are well established for

Accepted Answer

A)   private goods.
B)   public goods.
C)   common resources.
D)   both (b) and (c) .E) A) and B)
F) B) and D)

Question 19

For most goods in an economy,the signal that guides the decisions of buyers and sellers is

Accepted Answer

A)   preference.
B)   government intervention.
C)   quantity.
D)   price.E) None of the above
F) B) and D)

Question 20

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Accepted Answer

A)   drive at times other than rush hour.
B)   use public transit rather than driving.
C)   drive more fuel-efficient cars.
D)   car-pool.E) A) and B)
F) B) and D)

Exam 11: Public Goods and Common Resources

To achieve the optimal provision of public goods,the

Correct Answer
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An AM radio transmission of a baseball game is

Correct Answer
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D

Private companies will invest in medical research if

Correct Answer
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B

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

Correct Answer
verified

Which of the following represents a potential solution to the problem of environmental pollution?

Correct Answer
verified

Correct Answer
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Correct Answer
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If a road is congested,then use of that road by an additional person would lead to a

Correct Answer
verified

The Tragedy of the Commons results when a good is

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

Correct Answer
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Consider the following problems: overcrowded public highways,overfishing in the ocean,polluted air,and the near-extinction of the wild rhinoceros.What do these problems have in common?

Correct Answer
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The national defense of the United States is not excludable because

Correct Answer
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When goods do not have a price,which of the following primarily ensures that the good is produced?

Correct Answer
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Figure 11-1 -Refer to Figure 11-1.A ham sandwich is an example of the type of good represented by Box

Correct Answer
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C

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Correct Answer
verified

If the government decides to build a new highway,the first step would be to conduct a study to determine the value of the project.The study is called a

Correct Answer
verified

Property rights are well established for

Correct Answer
verified

For most goods in an economy,the signal that guides the decisions of buyers and sellers is

Correct Answer
verified

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Correct Answer
verified

Exam 11: Public Goods and Common Resources

To achieve the optimal provision of public goods,the

Correct AnswerverifiedShow Answer

An AM radio transmission of a baseball game is

Correct AnswerverifiedD

Private companies will invest in medical research if

Correct AnswerverifiedB

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000.The walkway is expected to reduce the risk of fatality by 3 percent,and the cost of a human life is estimated at $10 million.The town should

Correct AnswerverifiedShow Answer

Which of the following represents a potential solution to the problem of environmental pollution?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a road is congested,then use of that road by an additional person would lead to a

Correct AnswerverifiedShow Answer

The Tragedy of the Commons results when a good is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Consider the following problems: overcrowded public highways,overfishing in the ocean,polluted air,and the near-extinction of the wild rhinoceros.What do these problems have in common?

Correct AnswerverifiedShow Answer

The national defense of the United States is not excludable because

Correct AnswerverifiedShow Answer

When goods do not have a price,which of the following primarily ensures that the good is produced?

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1.A ham sandwich is an example of the type of good represented by Box

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Correct AnswerverifiedShow Answer

If the government decides to build a new highway,the first step would be to conduct a study to determine the value of the project.The study is called a

Correct AnswerverifiedShow Answer

Property rights are well established for

Correct AnswerverifiedShow Answer

For most goods in an economy,the signal that guides the decisions of buyers and sellers is

Correct AnswerverifiedShow Answer

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Correct AnswerverifiedShow Answer

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D

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B

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C

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