Question 1

Using a toll to reduce traffic when congestion is greatest is an example of a

Accepted Answer

A)   regulation solution.
B)   command-and-control policy.
C)   corrective tax.
D)   Coase theorem solution.E) None of the above
F) A) and C)

Question 2

Figure 11-1
 
-Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Accepted Answer

A)   Box A, which represents private goods.
B)   Box B, which represents common resources.
C)   Box C, which represents common resources.
D)   Box D, which represents public goods.E) A) and C)
F) B) and C)

Question 3

Each of the following explains why cost-benefit analysis is difficult except

Accepted Answer

A)   there is no price with which to judge the value of a public good.
B)   surveys are often biased and unreliable.
C)   it is difficult to identify all factors that influence costs and benefits of public goods.
D)   government projects rarely have sufficient funding to complete them on time.E) All of the above
F) A) and B)

Question 4

Because it is

Accepted Answer

A)   excludable but not rival in consumption, a sweatshirt is a club good.
B)   rival in consumption but not excludable, a sweatshirt is a club good.
C)   both excludable and rival in consumption, a sweatshirt is a private good.
D)   neither excludable nor rival in consumption, a sweatshirt is a public good.E) B) and C)
F) A) and D)

Question 5

Markets fail to allocate resources efficiently when

Accepted Answer

A)   demanders and suppliers cannot agree on a price.
B)   goods are rival in consumption and excludable.
C)   property rights are not well established.
D)   too many buyers and sellers exist in the same market.E) B) and C)
F) A) and B)

Question 6

When free riders are present in a market, the market generally fails to provide the efficient outcome.

Accepted Answer

A) True 
 B)False

Question 7

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Accepted Answer

A) True 
 B)False

Question 8

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

Question 9

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 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.E) B) and C)
F) B) and D)

Question 11

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

Accepted Answer

A) True 
 B)False

Question 12

A town engineer comes to the city council with a proposal to install a traffic light at a certain intersection that currently has a stop sign. The benefit of the traffic light is increased safety because the light will reduce the incidence of fatal traffic accidents by 50 percent per year. Which of the following statements is correct?

Accepted Answer

A)   The city council should vote to install the traffic light because the benefits will outweigh the costs.
B)   The city council should carefully evaluate the benefits of reduced fatalities against only the explicit costs of the light.
C)   The city council should carefully evaluate the benefits of reduced fatalities against the costs of the light and of the extra time that drivers will spend waiting for a green light.
D)   The costs will invariably outweigh the benefits.E) B) and D)
F) A) and B)

Question 13

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Accepted Answer

A)   basic research.
B)   a congested toll road.
C)   spinach.
D)   clothing.E) None of the above
F) All of the above

Question 14

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 $300. How many trees should be planted to maximize the total surplus of the four homeowners?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) B) and C)
F) C) and D)

Question 15

Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach that anyone may use without paying any fees. This state beach

Accepted Answer

A)   will tend to be overused because it is nonexcludable.
B)   is a common resource when it becomes crowded on sunny summer weekends.
C)   is rival in consumption when it becomes crowded on sunny summer weekends.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 16

An internet radio broadcast 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.E) B) and C)
F) A) and D)

Question 17

The U.S. military defends Jacob from foreign attackers. The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it. For this reason, we say that national defense is

Accepted Answer

A)   excludable.
B)   not excludable.
C)   rival in consumption.
D)   not rival in consumption.E) A) and B)
F) C) and D)

Question 18

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

Accepted Answer

A)   The benefits are usually easier to measure than the costs.
B)   Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs.
C)   Estimating the value of a human life is difficult but necessary to evaluate the proposal.
D)   Both a and b are correct.E) B) and D)
F) C) and D)

Question 19

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

Question 20

One way to place a value on human life is to examine the risks that people voluntarily take and how much they must be paid for taking them. What is the approximate value of a human life according to studies that use this approach?

Accepted Answer

According to these studies, th...

Exam 11: Public Goods and Common Resources

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

When free riders are present in a market, the market generally fails to provide the efficient outcome.

Correct Answer
verified

Because it is

Correct Answer
verified

An internet radio broadcast is

Correct Answer
verified

Correct Answer
verified

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
verified

Each of the following explains why cost-benefit analysis is difficult except

Correct Answer
verified

Correct Answer
verified

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Correct Answer
verified

The provision of public goods gives rise to

Correct Answer
verified

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Correct Answer
verified

Using a toll to reduce traffic when congestion is greatest is an example of a

Correct Answer
verified

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

Correct Answer
verified

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

Correct Answer
verified

Markets fail to allocate resources efficiently when

Correct Answer
verified

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

Correct Answer
verified

The U.S. military defends Jacob from foreign attackers. The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it. For this reason, we say that national defense is

Correct Answer
verified

Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach that anyone may use without paying any fees. This state beach

Correct Answer
verified

One way to place a value on human life is to examine the risks that people voluntarily take and how much they must be paid for taking them. What is the approximate value of a human life according to studies that use this approach?

Correct Answer
verified
According to these studies, th...
View Answer

Exam 11: Public Goods and Common Resources

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

When free riders are present in a market, the market generally fails to provide the efficient outcome.

Correct AnswerverifiedShow Answer

Because it is

Correct AnswerverifiedShow Answer

An internet radio broadcast is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Each of the following explains why cost-benefit analysis is difficult except

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Correct AnswerverifiedShow Answer

The provision of public goods gives rise to

Correct AnswerverifiedShow Answer

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Correct AnswerverifiedShow Answer

Using a toll to reduce traffic when congestion is greatest is an example of a

Correct AnswerverifiedShow Answer

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Markets fail to allocate resources efficiently when

Correct AnswerverifiedShow Answer

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The U.S. military defends Jacob from foreign attackers. The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it. For this reason, we say that national defense is

Correct AnswerverifiedShow Answer

Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach that anyone may use without paying any fees. This state beach

Correct AnswerverifiedShow Answer

One way to place a value on human life is to examine the risks that people voluntarily take and how much they must be paid for taking them. What is the approximate value of a human life according to studies that use this approach?

Correct AnswerverifiedAccording to these studies, th...View AnswerShow Answer

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Correct Answer
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According to these studies, th...
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