Question 1

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 $360 and the families have agreed to split the cost of installing the streetlights equally. If the residents choose to install the number of streetlights that will maximize total surplus from the streetlights, how much total surplus will the Greene family receive?

Accepted Answer

A)   -$80
B)   $320
C)   $360
D)   $480E) All of the above
F) B) and C)

Question 2

A good that is excludable is one that someone can be prevented from using if she did not pay for it.

Accepted Answer

A) True 
 B)False

Question 3

Suppose that you want to build a community garden for your neighborhood, which has 500 residents. The cost of the garden is $2,000, and each person values the garden at $3. After a month, you have only received 75 donations at $3 each. The result is that

Accepted Answer

A)   the local government should build the garden, but you should not.
B)   you should still build the garden, but the local government should not.
C)   neither you nor the local government should build the garden.
D)   either you or the local government should build the garden.E) A) and B)
F) A) and C)

Question 4

Knowledge that is patented is a

Accepted Answer

A)   public good, whereas knowledge that is not patented is a common resource.
B)   private good, whereas knowledge that is not patented is a club good.
C)   common resource, whereas knowledge that is not patented is a private good.
D)   club good, whereas knowledge that is not patented is a public good.E) A) and B)
F) A) and C)

Question 5

Which of the following is an approach used by economists to calculate the value of a human life?

Accepted Answer

A)   comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights
B)   comparing the wages of more risky occupations to less risky occupations
C)   comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 6

The Pennsylvania Turnpike is a tolled freeway running through the state of Pennsylvania. Motorists must pay tolls at various points along the Turnpike based on the distance they traveled on the freeway. Suppose that despite the tolls, many motorists in the urban areas use the Turnpike causing traffic to slow during peak times. What type of good would the Turnpike be classified as in this case?

Accepted Answer

A)   private good
B)   club good
C)   common resource
D)   public goodE) B) and D)
F) A) and B)

Question 7

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.E) A) and C)
F) A) and D)

Question 8

Which parable describes the problem of wild animals that are hunted to the point of extinction?

Accepted Answer

A)   Coase theorem
B)   The Tragedy of the Commons
C)   The Wise Woman
D)   The Tortoise and the HareE) A) and B)
F) B) and C)

Question 9

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. Suppose Becky lives in a city with an optional toll lane that assures a drive at the posted speed limit. She leaves her office at 5:00 for her usual 30 minute commute but hears on the radio that if she drives in the non-toll lanes, her commute will take 1 hour due to an accident. Becky should

Accepted Answer

A)   call the daycare and tell them to expect her at 6:00.
B)   choose to drive in the free-flowing toll lane as long as the toll is less than $10.
C)   choose to drive in the free-flowing toll lane as long as the toll is less than $30.
D)   choose to drive an alternate route to try to avoid some of the traffic.E) All of the above
F) C) and D)

Question 10

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Accepted Answer

A) True 
 B)False

Question 11

Miguel, Maria, and Marcos all would like a place to sit while waiting at their children's bus stop. The neighborhood association is considering installing several park benches at the bus stop. Miguel values the benches at $20, Maria at $30, and Marcos at $40. The park benches and labor for installation cost $100. If Miguel, Maria, and Marcos are the only residents who value the benches, what should the neighborhood association do?

Accepted Answer

A)   Install the park benches because people like places to sit.
B)   Install the park benches because the benefits outweigh the costs.
C)   Do not install the park benches because the costs outweigh the benefits.
D)   Do not install the park benches to prevent the Tragedy of the Commons problem of overuse.E) A) and B)
F) A) and C)

Question 12

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes Yes     No -Refer to Figure 11-1. The box labeled C represents A)  private goods. B)  club goods. C)  common resources. D)  public goods." class="answers-bank-image d-inline" rel="preload" > Yes     No -Refer to Figure 11-1. The box labeled C represents A)  private goods. B)  club goods. C)  common resources. D)  public goods." class="answers-bank-image d-inline" rel="preload" > No
-Refer to Figure 11-1. The box labeled C represents

Accepted Answer

A)   private goods.
B)   club goods.
C)   common resources.
D)   public goods.E) None of the above
F) C) and D)

Question 13

Which of the following is an example of the Tragedy of the Commons?

Accepted Answer

A)   The number of professional football teams increases to the point where the quality of the games decreases, as does television viewership.
B)   The number of satellites increases to the point where they begin running into each other.
C)   Disney World becomes so crowded that it institutes a lottery for admissions.
D)   A tiger breeding program becomes so successful that local zoos have to build additional exhibits so that visitors can view the cats.E) C) and D)
F) A) and D)

Question 14

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Accepted Answer

A) True 
 B)False

Question 15

When something of value has no price attached to it,

Accepted Answer

A)   externalities will be present.
B)   production of the product has no cost.
C)   government should not intervene to produce the product.
D)   private companies will eventually produce the product, and the good will no longer be free.E) All of the above
F) None of the above

Question 16

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

Accepted Answer

A)   over time, the aquifer is likely to be overused.
B)   each farmer has a sufficient incentive to conserve the water.
C)   state governments have an incentive to insure that their farmers do not overuse the water.
D)   resources would be used more efficiently if the government paid for the pumps farmers use to get the water.E) B) and C)
F) C) and D)

Question 17

The Tragedy of the Commons occurs because

Accepted Answer

A)   government property is most heavily used by the wealthy.
B)   everyone deserves an equal share of government property.
C)   social and private incentives differ.
D)   established property rights create competition.E) All of the above
F) B) and C)

Question 18

For all types of goods that are not private goods, the market fails to allocate resources efficiently because _________________.

Accepted Answer

property rights are not well e...

Question 19

Private goods are both

Accepted Answer

A)   excludable and nonrival in consumption.
B)   nonexcludable and rival in consumption.
C)   excludable and rival in consumption.
D)   nonexcludable and nonrival consumption.E) C) and D)
F) A) and C)

Question 20

Government policy can potentially raise economic well-being

Accepted Answer

A)   in all markets for goods and services.
B)   in economic models, but not in reality.
C)   when a good does not have a price attached to it.
D)   never.E) None of the above
F) B) and D)

Exam 11: Public Goods and Common Resources

A good that is excludable is one that someone can be prevented from using if she did not pay for it.

Correct Answer
verified

Private goods are both

Correct Answer
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The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

Correct Answer
verified

Correct Answer
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When something of value has no price attached to it,

Correct Answer
verified

Without government intervention, public goods tend to be

Correct Answer
verified

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Correct Answer
verified

Correct Answer
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For all types of goods that are not private goods, the market fails to allocate resources efficiently because _________________.

Correct Answer
verified
property rights are not well e...
View Answer

Which of the following is an approach used by economists to calculate the value of a human life?

Correct Answer
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Correct Answer
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Knowledge that is patented is a

Correct Answer
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The Tragedy of the Commons occurs because

Correct Answer
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Which of the following is an example of the Tragedy of the Commons?

Correct Answer
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Suppose that you want to build a community garden for your neighborhood, which has 500 residents. The cost of the garden is $2,000, and each person values the garden at $3. After a month, you have only received 75 donations at $3 each. The result is that

Correct Answer
verified

Correct Answer
verified

Which parable describes the problem of wild animals that are hunted to the point of extinction?

Correct Answer
verified

Figure 11-1 Rival in Consumption? Yes No Excludable? ^Yes No -Refer to Figure 11-1. The box labeled C represents

Correct Answer
verified

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Correct Answer
verified

Government policy can potentially raise economic well-being

Correct Answer
verified

Exam 11: Public Goods and Common Resources

A good that is excludable is one that someone can be prevented from using if she did not pay for it.

Correct AnswerverifiedShow Answer

Private goods are both

Correct AnswerverifiedShow Answer

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When something of value has no price attached to it,

Correct AnswerverifiedShow Answer

Without government intervention, public goods tend to be

Correct AnswerverifiedShow Answer

London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For all types of goods that are not private goods, the market fails to allocate resources efficiently because _________________.

Correct Answerverifiedproperty rights are not well e...View AnswerShow Answer

Which of the following is an approach used by economists to calculate the value of a human life?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Knowledge that is patented is a

Correct AnswerverifiedShow Answer

The Tragedy of the Commons occurs because

Correct AnswerverifiedShow Answer

Which of the following is an example of the Tragedy of the Commons?

Correct AnswerverifiedShow Answer

Suppose that you want to build a community garden for your neighborhood, which has 500 residents. The cost of the garden is $2,000, and each person values the garden at $3. After a month, you have only received 75 donations at $3 each. The result is that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which parable describes the problem of wild animals that are hunted to the point of extinction?

Correct AnswerverifiedShow Answer

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. The box labeled C represents

Correct AnswerverifiedShow Answer

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

Correct AnswerverifiedShow Answer

Government policy can potentially raise economic well-being

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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property rights are not well e...
View Answer

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Figure 11-1 Rival in Consumption? Yes No Excludable? ^Yes No -Refer to Figure 11-1. The box labeled C represents

Correct Answer
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Correct Answer
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Correct Answer
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