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Exam 11: Public Goods and Common Resources.

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Question 71

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Because of the free-rider problem,

A) private markets tend to undersupply public goods.
B) the federal government spends too many resources on national defense and not enough resources on medical research.
C) fireworks displays have become increasingly dangerous.
D) poverty has increased.

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

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Question 72

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Which of the following statements is not correct?

A) Medical research can be an example of a public good.
B) The private market will tend to undersupply public goods.
C) The free-rider problem occurs when a good is nonexcludable.
D) All goods provided by the government are public goods.

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

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Question 73

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The government provides public goods because

Goods that are not excludable include both

A stairwell in a certain office building is always congested at 12:00 p.m.and 1:00 p.m.The congestion is so bad that people have been complaining to the building's owner.Which of the following methods would be the most efficient way of reducing congestion?

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 $220 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s) would be in favor of planting at least 3 trees?

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

A tax on gasoline often reduces road congestion because gasoline

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

Figure 11-1 -Refer to Figure 11-1.Which of the following statements is correct?

One way to eliminate the Tragedy of the Commons is to

The government often intervenes when private markets fail to provide an optimal level of certain goods and services.For example,the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another.Why might the private market not reach the socially optimal level of traffic without the help of government?

When one person enjoys the benefit of a tornado siren,she reduces the benefit to others.

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box D?

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.

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

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 $16 per acre.How large should the park be to maximize total surplus from the park in Anywhere?

Too few resources are devoted to the creation of knowledge because profit-seeking firms

The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of diet soft drinks is 0.0005.The cost of imposing a regulation that would ban the chemical is $18 million.If the value of a human life is equal to $10 million,how many people must the policy affect in order for the benefits to exceed the costs?

At the local park there is a playground for children to use.While anyone is allowed to use the playground,it is often very busy,reducing the enjoyment of many of the children who use it.The playground is a