Question 1

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Accepted Answer

A)   prohibit parking in the vicinity of the park.
B)   charge higher prices for parking at busy times.
C)   police the parking area and ticket cars that are parked illegally.
D)   do nothing.

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 $120 and the 4 homeowners have agreed to split all tree-planting costs equally.How many trees would Adams prefer to plant?

Accepted Answer

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

Question 3

In a cost-benefit analysis,the value of a human life is sometimes calculated on the basis of

Accepted Answer

A)   the risks that a person voluntarily exposes herself to in her job and/or recreational choices.
B)   the value of each individual's assets.
C)   the belief that human life is priceless.
D)   the amount of resources required to adequately sustain life.

Question 4

If people can be prevented from using a certain good,then that good is called

Accepted Answer

A)   rival in consumption.
B)   excludable.
C)   a common resource.
D)   a public good.

Question 5

Suppose that you want to put on a fireworks display in your hometown of 1,000 people this July.The cost of the display is $6,000,and each person values the display at $5.After a month,you have only sold 50 tickets at $5 each.The result is that

Accepted Answer

A)   the local government should put on the display,but you should not.
B)   you should still put on the display,but the local government should not.
C)   neither you nor the local government should put on the display.
D)   either you or the local government should put on the display.

Question 6

Advocates of antipoverty programs believe that fighting poverty

Accepted Answer

A)   can make everyone better off.
B)   is most successfully accomplished by charities.
C)   is most efficiently accomplished by the market.
D)   reduces the well-being of tax payers.

Question 7

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

Accepted Answer

A)   a tornado siren
B)   an uncongested toll road
C)   a home
D)   the environment

Question 8

It is commonly argued that national defense is a public good.Nevertheless,the weapons used by the U.S.military are produced by private firms.We can conclude that

Accepted Answer

A)   resources would be used more efficiently if the government produced the weapons.
B)   resources would be used more efficiently if private firms provided national defense.
C)   weapons are rival in consumption and excludable,but national defense is not rival in consumption and not excludable.
D)   national defense is rival in consumption and excludable,but weapons are not rival in consumption and not excludable.

Question 9

Which of the following statements is correct?

Accepted Answer

A)   The establishment of property rights sometimes gives rise to market failure.
B)   The absence of property rights sometimes gives rise to market failure.
C)   In the context of public goods,the Coase theorem implies that total surplus in some markets can be improved by the elimination of property rights.
D)   Government regulation of private behavior,in response to market failure,can never improve social well-being.

Question 10

The provision of public goods gives rise to

Accepted Answer

A)   positive externalities,as does the use of common resources.
B)   positive externalities,whereas the use of common resources gives rise to negative externalities.
C)   negative externalities,whereas the use of common resources gives rise to positive externalities.
D)   negative externalities,as does the use of common resources.

Question 11

Market failure associated with the free-rider problem is a result of

Accepted Answer

A)   a problem associated with pollution.
B)   benefits that accrue to those who don't pay.
C)   losses that accrue to providers of the product.
D)   market power.

Question 12

The national defense of the United States is not rival 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 13

A variable toll on a road in Washington reached a high during the evening rush hour of $5.75.This toll bought the drivers who paid it a 27 minute time savings.Which of the following is correct?

Accepted Answer

A)   For some consumers,the toll was less than the opportunity cost of the time they would have spent in traffic.
B)   For some consumers,the toll was more than the opportunity cost of the time they would have spent in traffic.
C)   No consumers would find this toll worth the time saved in traffic.
D)   Both a and b are correct.

Question 14

Table 11-1
Consider the town of Anywhere with only three residents,Mary,Bill,and Tricia.The three residents are trying to determine how large,in acres,they should build the public park.The table below shows each resident's willingness to pay for each acre of the park.
 
-Refer to Table 11-1.Suppose the cost to build the park is $33 per acre and that the residents have agreed to split the cost of building the park equally.If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park,how much total surplus will Bill receive?

Accepted Answer

A)   -$2
B)   $2
C)   $9
D)   $10

Question 15

Government agencies,such as the National Science Foundation,subsidize basic research because in the absence of a subsidy too little research would be conducted.

Accepted Answer

A) True 
 B)False

Question 16

Advocates of antipoverty programs claim that fighting poverty is a public good.

Accepted Answer

A) True 
 B)False

Question 17

Table 11-5
A small strip mall contains four retail stores,and crime has recently been on the increase in the neighborhood of the strip mall.The owners of the four stores - Stores A,B,C,and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards.The table represents their willingness to pay,that is,the maximum amount that each store owner is willing to contribute,per day,to hire each security guard.
 
-Refer to Table 11-5.Suppose the cost to hire each individual guard is $110 per day and the 4 store owners have agreed to split the costs of hiring guards equally.Which of the following statements is correct?

Accepted Answer

A)   The owner of Store A would prefer to hire 2 guards.
B)   The owner of Store C would prefer to hire 1 guard.
C)   The owners of Stores B and D would prefer to hire 3 guards.
D)   All of the above are correct.

Question 18

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking,and the trash cans overflow with food wrappers on summer afternoons.Otherwise,it is a great place.The park is a common resource because

Accepted Answer

A)   people can be prevented from using it.
B)   access is limited due to driving distances.
C)   if too many people use it,one person's use diminishes other peoples' use.
D)   anyone can use it without affecting anyone else.

Question 19

The greatest difficulty with cost-benefit analysis of a public project is determining

Accepted Answer

A)   whether government revenue is sufficient to cover the cost of the project.
B)   which contractor should be awarded the project.
C)   the cost of the project.
D)   the value or benefit of the project.

Question 20

Because it is

Accepted Answer

A)   neither excludable nor rival in consumption,a tornado siren is a common resource.
B)   neither excludable nor rival in consumption,a tornado siren is a public good.
C)   excludable but not rival in consumption,a tornado siren is produced by a natural monopoly.
D)   rival in consumption but not excludable,a tornado siren is a common resource.

Exam 11: Public Goods and Common Resources

If people can be prevented from using a certain good,then that good is called

Correct Answer
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Market failure associated with the free-rider problem is a result of

Correct Answer
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Correct Answer
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Because it is

Correct Answer
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Suppose that you want to put on a fireworks display in your hometown of 1,000 people this July.The cost of the display is $6,000,and each person values the display at $5.After a month,you have only sold 50 tickets at $5 each.The result is that

Correct Answer
verified

A variable toll on a road in Washington reached a high during the evening rush hour of $5.75.This toll bought the drivers who paid it a 27 minute time savings.Which of the following is correct?

Correct Answer
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Correct Answer
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The provision of public goods gives rise to

Correct Answer
verified

Government agencies,such as the National Science Foundation,subsidize basic research because in the absence of a subsidy too little research would be conducted.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
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Advocates of antipoverty programs claim that fighting poverty is a public good.

Correct Answer
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Which of the following goods is nonrival in consumption and excludable?

Correct Answer
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Correct Answer
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Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Correct Answer
verified

The national defense of the United States is not rival because

Correct Answer
verified

It is commonly argued that national defense is a public good.Nevertheless,the weapons used by the U.S.military are produced by private firms.We can conclude that

Correct Answer
verified

Correct Answer
verified

In a cost-benefit analysis,the value of a human life is sometimes calculated on the basis of

Correct Answer
verified

The greatest difficulty with cost-benefit analysis of a public project is determining

Correct Answer
verified

Advocates of antipoverty programs believe that fighting poverty

Correct Answer
verified

Exam 11: Public Goods and Common Resources

If people can be prevented from using a certain good,then that good is called

Correct AnswerverifiedShow Answer

Market failure associated with the free-rider problem is a result of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Because it is

Correct AnswerverifiedShow Answer

Suppose that you want to put on a fireworks display in your hometown of 1,000 people this July.The cost of the display is $6,000,and each person values the display at $5.After a month,you have only sold 50 tickets at $5 each.The result is that

Correct AnswerverifiedShow Answer

A variable toll on a road in Washington reached a high during the evening rush hour of $5.75.This toll bought the drivers who paid it a 27 minute time savings.Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The provision of public goods gives rise to

Correct AnswerverifiedShow Answer

Government agencies,such as the National Science Foundation,subsidize basic research because in the absence of a subsidy too little research would be conducted.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Advocates of antipoverty programs claim that fighting poverty is a public good.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Imagine a 2,000-acre park with picnic benches,trees,and a pond.Suppose it is publicly owned,and people are invited to enjoy its beauty.When the weather is nice,it is difficult to find parking on summer afternoons.Otherwise,it is a great place.An efficient solution to the parking problem would be to

Correct AnswerverifiedShow Answer

The national defense of the United States is not rival because

Correct AnswerverifiedShow Answer

It is commonly argued that national defense is a public good.Nevertheless,the weapons used by the U.S.military are produced by private firms.We can conclude that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a cost-benefit analysis,the value of a human life is sometimes calculated on the basis of

Correct AnswerverifiedShow Answer

The greatest difficulty with cost-benefit analysis of a public project is determining

Correct AnswerverifiedShow Answer

Advocates of antipoverty programs believe that fighting poverty

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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