Question 1

Residents of Hong Kong are able to find restaurants that advertise a dish that contains grizzly bear paws.Since it is unlikely that grizzly bear paws are purchased from a private producer of animal paws,we can likely conclude that

Accepted Answer

A)   international laws making it illegal to sell grizzly bear paws are likely to be very effective at eliminating these offerings at Hong Kong restaurants.
B)   higher penalties for poaching grizzly bears will prevent poachers from killing.
C)   there are likely to be very few grizzly bear poachers.
D)   allowing individuals to own and raise grizzly bears for meat would likely reduce the threat of extinction to grizzly bear populations.

Question 2

What do we mean when we say that a good is rival in consumption?

Accepted Answer

A good is rival in consumption...

Question 3

Producers have little incentive to produce a public good because

Accepted Answer

A)   the social benefit is less than the private benefit.
B)   the social benefit is less than the social cost.
C)   there is a free-rider problem.
D)   there is a Tragedy of the Commons.

Question 4

On the Fourth of July,there is no fireworks display in the small town of Yankeeville,even though it would be efficient for such a display to be produced.Which of the following statements is correct?

Accepted Answer

A)   The lack of a fireworks display in Yankeeville arises because of an externality.
B)   The lack of a fireworks display in Yankeeville is a case of market failure.
C)   In deciding not to produce a fireworks display in Yankeeville,private individuals and private firms made decisions that were privately rational but socially inefficient.
D)   All of the above are correct.

Question 5

A lighthouse might be considered a private good if

Accepted Answer

A)   there is a second lighthouse nearby,thus preventing a monopoly.
B)   the owner of the lighthouse is able to exclude beneficiaries from receiving the benefits of the lighthouse.
C)   ships are able to enjoy the benefits of the lighthouse without paying for the benefit.
D)   a nearby port authority is able to avoid paying any fees to the lighthouse owner.

Question 6

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

Accepted Answer

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

Question 7

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,the...

Question 8

National Public Radio would be considered a club good.

Accepted Answer

A) True 
 B)False

Question 9

People cannot be prevented from using a good if the good is

Accepted Answer

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

Question 10

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Accepted Answer

A) True 
 B)False

Question 11

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Accepted Answer

A) True 
 B)False

Question 12

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. C

Question 13

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Accepted Answer

A) True 
 B)False

Question 14

Private markets usually fail to provide lighthouses because

Accepted Answer

A)   lighthouses cost too much to build relative to their benefits.
B)   government intervention makes it hard for private lighthouse owners to compete in the market.
C)   ship captains have incentives to use lighthouses without paying.
D)   lighthouses are valued very little by ship captains these days. C

Question 15

Table 11-2
Consider a small town with only three families,the Johnson family,the Marshall family,and the Walker 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 $450.How many streetlights should the town install to maximize total surplus from the streetlights?

Accepted Answer

A)   1 streetlight
B)   2 streetlights
C)   3 streetlights
D)   4 streetlights B

Question 16

Which of the following is an approach used by economists to calculate the value of a human life?

Accepted Answer

A)   comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights
B)   comparing the wages of more risky occupations to less risky occupations
C)   comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features
D)   All of the above are correct.

Question 17

An example of a private good would be

Accepted Answer

A)   a local fire department.
B)   a pair of pants.
C)   a streetlight.
D)   a national park.

Question 18

It would always be a mistake to view

Accepted Answer

A)   a tornado siren as a public good.
B)   a congested road as a common resource.
C)   cable TV as a common resource.
D)   a mathematical theorem as a public good.

Question 19

Markets fail to allocate resources efficiently when

Accepted Answer

A)   prices fluctuate.
B)   people who have property rights abuse their privileges.
C)   property rights are not well established.
D)   the government refuses to intervene in private markets.

Question 20

The Pennsylvania Turnpike is a tolled freeway running through the state of Pennsylvania.Motorists must pay tolls at various points along the Turnpike based on the distance they traveled on the freeway.Suppose that despite the tolls,many motorists in the urban areas use the Turnpike causing traffic to slow during peak times.What type of good would the Turnpike be classified as in this case?

Accepted Answer

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

Exam 11: Public Goods and Common Resources

Residents of Hong Kong are able to find restaurants that advertise a dish that contains grizzly bear paws.Since it is unlikely that grizzly bear paws are purchased from a private producer of animal paws,we can likely conclude that

Correct Answer
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What do we mean when we say that a good is rival in consumption?

Correct Answer
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A good is rival in consumption...
View Answer

Producers have little incentive to produce a public good because

Correct Answer
verified

On the Fourth of July,there is no fireworks display in the small town of Yankeeville,even though it would be efficient for such a display to be produced.Which of the following statements is correct?

Correct Answer
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A lighthouse might be considered a private good if

Correct Answer
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Figure 11-1 -Refer to Figure 11-1.The box labeled B represents

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

Correct Answer
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National Public Radio would be considered a club good.

Correct Answer
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People cannot be prevented from using a good if the good is

Correct Answer
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London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Correct Answer
verified

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Correct Answer
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Without government intervention,public goods tend to be

Correct Answer
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C

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Correct Answer
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Private markets usually fail to provide lighthouses because

Correct Answer
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C

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B

Which of the following is an approach used by economists to calculate the value of a human life?

Correct Answer
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An example of a private good would be

Correct Answer
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It would always be a mistake to view

Correct Answer
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Markets fail to allocate resources efficiently when

Correct Answer
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Exam 11: Public Goods and Common Resources

Residents of Hong Kong are able to find restaurants that advertise a dish that contains grizzly bear paws.Since it is unlikely that grizzly bear paws are purchased from a private producer of animal paws,we can likely conclude that

Correct AnswerverifiedShow Answer

What do we mean when we say that a good is rival in consumption?

Correct AnswerverifiedA good is rival in consumption...View AnswerShow Answer

Producers have little incentive to produce a public good because

Correct AnswerverifiedShow Answer

On the Fourth of July,there is no fireworks display in the small town of Yankeeville,even though it would be efficient for such a display to be produced.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A lighthouse might be considered a private good if

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

National Public Radio would be considered a club good.

Correct AnswerverifiedShow Answer

People cannot be prevented from using a good if the good is

Correct AnswerverifiedShow Answer

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Correct AnswerverifiedShow Answer

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Correct AnswerverifiedShow Answer

Without government intervention,public goods tend to be

Correct AnswerverifiedC

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Correct AnswerverifiedShow Answer

Private markets usually fail to provide lighthouses because

Correct AnswerverifiedC

Correct AnswerverifiedB

Which of the following is an approach used by economists to calculate the value of a human life?

Correct AnswerverifiedShow Answer

An example of a private good would be

Correct AnswerverifiedShow Answer

It would always be a mistake to view

Correct AnswerverifiedShow Answer

Markets fail to allocate resources efficiently when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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A good is rival in consumption...
View Answer

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C

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C

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B

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