Question 1

Who among the following is a free rider?

Accepted Answer

A)   Mickey buys groceries from the store where he works.
B)   Donald rides to work with Betsey,but he pays Betsey for gasoline and other travel-related expenses.
C)   Fred drives 20,000 miles a year on public streets,but he pays no more in property taxes than Barney,who only drives 1,000 miles.
D)   Wilma watches many public television programs,but she has never sent in a contribution to the station.E) B) and C)
F) A) and B)

Question 2

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

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

If one person's use of a good diminishes another person's enjoyment of it,the good is

Accepted Answer

A)   rival in consumption.
B)   excludable.
C)   normal.
D)   exhaustible.E) A) and B)
F) All of the above

Question 5

As with many public goods,determining the appropriate level of government support for the production of general knowledge is difficult because

Accepted Answer

A)   patents correct for an unknown portion of the externality.
B)   benefits are hard to measure.
C)   members of Congress are often experts in the sciences.
D)   the costs always exceed the benefits.E) A) and C)
F) A) and B)

Question 6

When a good is rival in consumption,

Accepted Answer

A)   one person's use of the good diminishes another person's ability to use it.
B)   people can be prevented from using the good.
C)   an unlimited number of people can use the good at the same time.
D)   everyone will be excluded from obtaining the good.E) C) and D)
F) A) and B)

Question 7

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

Accepted Answer

A)   Coase theorem
B)   Tragedy of the Commons
C)   Cost-benefit analysis
D)   Clean Air ActE) B) and D)
F) A) and C)

Question 8

If the use of a common resource is not regulated,

Accepted Answer

A)   no one can enjoy it.
B)   it will tend to be underused.
C)   property rights will be clearly defined.
D)   it will be overused.E) A) and D)
F) B) and C)

Question 9

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

Accepted Answer

A)   private good.
B)   club good.
C)   common resource.
D)   public good.E) All of the above
F) B) and D)

Question 10

Which of the following statements is not correct?

Accepted Answer

A)   A free rider is a person who benefits from something for which he or she does not have to pay.
B)   The creation of general knowledge is a public good.
C)   The Tragedy of the Commons illustrates the underuse of a common resource.
D)   A gasoline tax is an imperfect solution to the problem of traffic congestion on public roads.E) A) and D)
F) A) and C)

Question 11

Tolls are not effective in altering people's incentives to drive during rush hour.

Accepted Answer

A) True 
 B)False

Question 12

You are the mayor of a town with 20,000 residents.The head of your economic development agency recently conducted a survey in which the 20,000 residents said that a small public library in the center of town would be worth $40 to each of them.The cost to build the library is $500,000.Which of the following is the most efficient option?

Accepted Answer

A)   The library should be built and paid for with donations collected from residents,as these donations should more than cover the cost of the library.
B)   The library should be built and paid for by the town government and paid for with a tax on the residents because all residents would benefit from it but some residents would not donate if they were asked.
C)   The library should be built and paid for by the wealthiest ten percent of the residents.
D)   The library should not be built.E) A) and D)
F) A) and C)

Question 13

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Accepted Answer

A)   those who stand to gain have an incentive to tell the truth.
B)   those who stand to lose have an incentive to exaggerate their true costs.
C)   answers to the survey questions will always be downwardly biased.
D)   not everyone asked will be using the highway.E) A) and B)
F) None of the above

Question 14

A vacation home in Malibu is

Accepted Answer

A)   not rival in consumption and excludable.
B)   rival in consumption and excludable.
C)   not rival in consumption and not excludable.
D)   rival in consumption and not excludable.E) All of the above
F) B) and C)

Question 15

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)   1.0E) All of the above
F) C) and D)

Question 16

Because the benefits of basic research are obvious and easy to measure,it is likely that the public sector pays for the right amount and the right kinds of basic research.

Accepted Answer

A) True 
 B)False

Question 17

You and your friends eat potato chips in your bedroom.For you and your friends,the potato chips are rival in consumption.

Accepted Answer

A) True 
 B)False

Question 18

Most goods in the economy are

Accepted Answer

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

Question 19

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 $340 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s) would be in favor of planting at least 1 tree?

Accepted Answer

A)   only Benitez
B)   only Benitez and Chen
C)   only Benitez,Chen,and Davis
D)   Adams,Benitez,Chen,and DavisE) None of the above
F) A) and B)

Question 20

If a road is congested,then use of that road by an additional person would lead to a

Accepted Answer

A)   negative externality.
B)   positive externality.
C)   Pigovian externality.
D)   free-rider problem with rush hour drivers stuck in traffic.E) All of the above
F) None of the above

Exam 11: Public Goods and Common Resources

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

Correct Answer
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When a good is rival in consumption,

Correct Answer
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Correct Answer
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Correct Answer
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If a road is congested,then use of that road by an additional person would lead to a

Correct Answer
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If one person's use of a good diminishes another person's enjoyment of it,the good is

Correct Answer
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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

Correct Answer
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A vacation home in Malibu is

Correct Answer
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A cable television broadcast of a movie is

Correct Answer
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Because the benefits of basic research are obvious and easy to measure,it is likely that the public sector pays for the right amount and the right kinds of basic research.

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Correct Answer
verified

You and your friends eat potato chips in your bedroom.For you and your friends,the potato chips are rival in consumption.

Correct Answer
verified

Who among the following is a free rider?

Correct Answer
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Most goods in the economy are

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

Correct Answer
verified

As with many public goods,determining the appropriate level of government support for the production of general knowledge is difficult because

Correct Answer
verified

Correct Answer
verified

If the use of a common resource is not regulated,

Correct Answer
verified

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct Answer
verified

Exam 11: Public Goods and Common Resources

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

Correct AnswerverifiedShow Answer

When a good is rival in consumption,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a road is congested,then use of that road by an additional person would lead to a

Correct AnswerverifiedShow Answer

If one person's use of a good diminishes another person's enjoyment of it,the good is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A vacation home in Malibu is

Correct AnswerverifiedShow Answer

A cable television broadcast of a movie is

Correct AnswerverifiedShow Answer

Because the benefits of basic research are obvious and easy to measure,it is likely that the public sector pays for the right amount and the right kinds of basic research.

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Correct AnswerverifiedShow Answer

You and your friends eat potato chips in your bedroom.For you and your friends,the potato chips are rival in consumption.

Correct AnswerverifiedShow Answer

Who among the following is a free rider?

Correct AnswerverifiedShow Answer

Most goods in the economy are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

As with many public goods,determining the appropriate level of government support for the production of general knowledge is difficult because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the use of a common resource is not regulated,

Correct AnswerverifiedShow Answer

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct AnswerverifiedShow Answer

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