Question 1

A toll on a congested road is in essence

Accepted Answer

A)  an interstate highway tax.
B)  a Department of Motor Vehicles tax.
C)  a gasoline tax.
D)  a corrective tax.E) All of the above
F) A) and B)

Question 2

After a recent spike in violent crime, the local police department wants to spend $550,000 on a new crime fighting initiative. If a human life is worth $9 million, the crime fighting initiative is worth the cost if it reduces the risk of someone dying from crime by at least

Accepted Answer

A)  3.5 percentage points.
B)  5.5 percentage points.
C)  6.1 percentage points.
D)  9.0 percentage points.E) All of the above
F) A) and B)

Question 3

Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?

Accepted Answer

Other people, besides the pers...

Question 4

Which of the following is not a common resource?

Accepted Answer

A)  elephants in the wild
B)  a narrow trail in a park
C)  a neighborhood garden
D)  Neither a nor b is a common resource.E) B) and D)
F) A) and D)

Question 5

When a good does not have a __________ attached to it, private markets fail to ensure that the good is produced and consumed in the proper amounts.

Accepted Answer

The answer of When a good does not have a...

Question 6

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Accepted Answer

A) True 
 B)False

Question 7

Private decisions about consumption of common resources and production of public goods usually lead to an

Accepted Answer

A)  efficient allocation of resources and external effects.
B)  efficient allocation of resources and no external effects.
C)  inefficient allocation of resources and external effects.
D)  inefficient allocation of resources and no external effects.E) A) and B)
F) A) and C)

Question 8

Why is cable TV reception regarded as a club good?

Accepted Answer

Cable TV reception is excludable, becaus...

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.E) B) and C)
F) None of the above

Question 10

If everyone benefits from helping the poor,

Accepted Answer

A)  government intervention cannot improve social well-being.
B)  eliminating taxes aimed at redistributing income will make rich people better off.
C)  taxing the wealthy to raise living standards of the poor can potentially make everyone better off.
D)  private markets can adequately provide charity programs to help the poor, despite free-rider problems.E) B) and D)
F) All of the above

Question 11

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.E) A) and C)
F) All of the above

Question 12

Table 11-5
A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip. 
-Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $750 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. Which business owner(s)  would be opposed to having any ferry trips?

Accepted Answer

A)  only the owner of Store B
B)  only the owners of Stores A and B
C)  only the owners of Stores A and B and Restaurant 2
D)  All 4 business owners would be opposed to paying for any ferry trips.E) C) and D)
F) B) and C)

Question 13

Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?

Accepted Answer

Whales are not excludable, but...

Question 14

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is

Accepted Answer

A)  both rival in consumption and excludable.
B)  neither rival in consumption nor excludable.
C)  excludable, but not rival in consumption.
D)  rival in consumption, but not excludable.E) A) and D)
F) None of the above

Question 15

Because elephants roam freely in many countries in Africa, each individual African elephant poacher has

Accepted Answer

A)  a strong incentive to kill as many elephants as he can find.
B)  a strong incentive to protect the elephants.
C)  the ability to save the elephants.
D)  None of the above is correct.E) B) and D)
F) None of the above

Question 16

Which of the following goods is excludable but not rival in consumption?

Accepted Answer

A)  a congested toll road
B)  fire protection in a small town
C)  a tornado siren
D)  whales in the oceanE) B) and C)
F) A) and D)

Question 17

The pollution market failure is an example of the free rider problem.

Accepted Answer

A) True 
 B)False

Question 18

The U.S. government protects fish, a common resource, by

Accepted Answer

A)  subsidizing the fishing industry.
B)  heavily taxing competing industries.
C)  selling fishing licenses and regulating fish lengths.
D)  None of the above is correct.E) A) and D)
F) C) and D)

Question 19

An absence of property rights often leads to market failure. When this is the case, how does society usually solve the problem?

Accepted Answer

The solution to the problem us...

Question 20

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.E) A) and B)
F) All of the above

Exam 11: Public Goods and Common Resources

Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?

Correct Answer
verified
Whales are not excludable, but...
View Answer

Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?

Correct Answer
verified
Other people, besides the pers...
View Answer

A common theme among examples of market failure is

Correct Answer
verified

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Correct Answer
verified

Correct Answer
verified

Which of the following goods is excludable but not rival in consumption?

Correct Answer
verified

An absence of property rights often leads to market failure. When this is the case, how does society usually solve the problem?

Correct Answer
verified
The solution to the problem us...
View Answer

After a recent spike in violent crime, the local police department wants to spend $550,000 on a new crime fighting initiative. If a human life is worth $9 million, the crime fighting initiative is worth the cost if it reduces the risk of someone dying from crime by at least

Correct Answer
verified

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is

Correct Answer
verified

Which of the following is not a common resource?

Correct Answer
verified

Because elephants roam freely in many countries in Africa, each individual African elephant poacher has

Correct Answer
verified

When a good does not have a __________ attached to it, private markets fail to ensure that the good is produced and consumed in the proper amounts.

Correct Answer
verified

The U.S. government protects fish, a common resource, by

Correct Answer
verified

The pollution market failure is an example of the free rider problem.

Correct Answer
verified

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

Correct Answer
verified

Why is cable TV reception regarded as a club good?

Correct Answer
verified
Cable TV reception is excludable, becaus...
View Answer

A toll on a congested road is in essence

Correct Answer
verified

Private decisions about consumption of common resources and production of public goods usually lead to an

Correct Answer
verified

Correct Answer
verified

If everyone benefits from helping the poor,

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?

Correct AnswerverifiedWhales are not excludable, but...View AnswerShow Answer

Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?

Correct AnswerverifiedOther people, besides the pers...View AnswerShow Answer

A common theme among examples of market failure is

Correct AnswerverifiedShow Answer

When a highway is congested, giving rise to negative externalities, it is appropriate to view the highway as a common resource.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following goods is excludable but not rival in consumption?

Correct AnswerverifiedShow Answer

An absence of property rights often leads to market failure. When this is the case, how does society usually solve the problem?

Correct AnswerverifiedThe solution to the problem us...View AnswerShow Answer

After a recent spike in violent crime, the local police department wants to spend $550,000 on a new crime fighting initiative. If a human life is worth $9 million, the crime fighting initiative is worth the cost if it reduces the risk of someone dying from crime by at least

Correct AnswerverifiedShow Answer

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is

Correct AnswerverifiedShow Answer

Which of the following is not a common resource?

Correct AnswerverifiedShow Answer

Because elephants roam freely in many countries in Africa, each individual African elephant poacher has

Correct AnswerverifiedShow Answer

When a good does not have a __________ attached to it, private markets fail to ensure that the good is produced and consumed in the proper amounts.

Correct AnswerverifiedShow Answer

The U.S. government protects fish, a common resource, by

Correct AnswerverifiedShow Answer

The pollution market failure is an example of the free rider problem.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Why is cable TV reception regarded as a club good?

Correct AnswerverifiedCable TV reception is excludable, becaus...View AnswerShow Answer

A toll on a congested road is in essence

Correct AnswerverifiedShow Answer

Private decisions about consumption of common resources and production of public goods usually lead to an

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If everyone benefits from helping the poor,

Correct AnswerverifiedShow Answer

Correct Answer
verified
Whales are not excludable, but...
View Answer

Correct Answer
verified
Other people, besides the pers...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The solution to the problem us...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Cable TV reception is excludable, becaus...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified