Question 1

Which of the following is a disadvantage of government provision of a public good?

Accepted Answer

A)   The government lacks information about what people are willing to pay for the good.
B)   The government does not provide enough of any public good.
C)   The private sector can provide all public goods at a lower cost.
D)   None of the above is a disadvantage.

Question 2

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 3

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

Accepted Answer

A)   a wristwatch
B)   fire protection in a small town
C)   fish in the ocean
D)   efforts to fight poverty

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

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Accepted Answer

A) True 
 B)False

Question 6

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.

Question 7

The Occupational Safety and Health Administration OSHA)  has determined that 100 workers are exposed to a hazardous chemical used in the production of diet soft drinks. The cost of imposing a regulation that would ban the chemical is $10 million. OSHA has calculated that each person saved by this regulation has a value equal to $10 million. If the benefits are exactly equal to the costs, what probability is OSHA using to assess the likelihood of a fatality from exposure to this chemical?

Accepted Answer

A)   0.001
B)   0.01
C)   0.1
D)   1.0

Question 8

Pay-per-view broadcasts are

Accepted Answer

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

Question 9

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

Accepted Answer

A) True 
 B)False

Question 10

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.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A good is rival in consumption...

Question 14

Each of the following would be considered a common resource except a

Accepted Answer

A)   water reservoir.
B)   streetlight.
C)   a congested road.
D)   book from a public library.

Question 15

Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Question 16

Scenario 11-1
Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late.
-Refer to Scenario 11-1. Due to traffic, Becky expects to be 20 minutes late to pick up her children. How much would she be willing to pay for a variable toll road that would get her to the daycare center on time?

Accepted Answer

A)   any price less than $5
B)   any price less than $10
C)   any price less than $20
D)   Becky would not be willing to pay out of pocket to avoid traffic.

Question 17

It would always be a mistake to view

Accepted Answer

A)   many species of animals as common resources.
B)   a road as a public good.
C)   national defense as a common resource.
D)   a fireworks display as a public good.

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 $900. 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

Question 19

A cable television broadcast of a movie 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.

Question 20

Fire protection is a

Accepted Answer

A)   club good, because it is excludable but not rival in consumption.
B)   club good, because it is rival in consumption but not excludable.
C)   a public good, because it is excludable but not rival in consumption.
D)   a public good, because it is rival in consumption but not excludable.

Exam 11: Public Goods and Common Resources

It would always be a mistake to view

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

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A good is rival in consumption...
View Answer

Correct Answer
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The provision of public goods gives rise to

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

Correct Answer
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The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

Correct Answer
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Without government intervention, public goods tend to be

Correct Answer
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Fire protection is a

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

Correct Answer
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Each of the following would be considered a common resource except a

Correct Answer
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Pay-per-view broadcasts are

Correct Answer
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Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances.

Correct Answer
verified

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

Correct Answer
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A cable television broadcast of a movie is

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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If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Correct Answer
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Which of the following is a disadvantage of government provision of a public good?

Correct Answer
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Exam 11: Public Goods and Common Resources

It would always be a mistake to view

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The provision of public goods gives rise to

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

Correct AnswerverifiedShow Answer

Without government intervention, public goods tend to be

Correct AnswerverifiedShow Answer

Fire protection is a

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

Correct AnswerverifiedShow Answer

Each of the following would be considered a common resource except a

Correct AnswerverifiedShow Answer

Pay-per-view broadcasts are

Correct AnswerverifiedShow Answer

Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A cable television broadcast of a movie is

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

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of government provision of a public good?

Correct AnswerverifiedShow Answer

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A good is rival in consumption...
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