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Exam 11: Public Goods and Common Resources

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Question 201

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Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

A) overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
B) overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.
C) understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
D) understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.

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

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Question 202

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Which of the following statements about private goods and public goods is correct?

A) Private goods and public goods are both excludable.
B) Private goods and public goods are both rival in consumption.
C) Private goods are not excludable and public goods are excludable.
D) Private goods are rival in consumption and public goods are not excludable.

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

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Question 203

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On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. On these days, electricity is

It is common knowledge that many U.S. national parks have become overused. One possible solution to this problem is to

The old lyric "the best things in life are free"

Are public goods excludable? Are they rival in consumption?

Table 11-6 Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning. ​ ​ -Refer to Table 11-6. Suppose the cost to clean the lake is $40 per hour and that the residents have agreed to split the cost of cleaning the lake equally. If it was decided that the lake will be cleaned for the number of hours that maximizes total surplus of Widgetapolis, how much individual surplus will Mary receive in total?

A television broadcast is an example of a good that is

The idea that "externalities arise because something of value has no price attached to it" is associated with

Which of the following is a disadvantage of government provision of a public good such as national defense? (i) The government does not know the exact willingness of consumers to pay for the public good. (ii) The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good. (iii) Taxpayers do not agree on the optimal quantity of the public good that the government should provide.

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 A?

The enclosure movement in England in the 17^th century represented an attempt to transform

Which of the following would not be considered a private good?

Which of the following is a common resource?

A streetlight is a

Scenario 11-2 Consider the following goods: • fire-protection services provided by a fire department • a beautiful mural on the outside wall of a fire station • a firefighter's helmet -Refer to Scenario 11-2. Which of these goods is the best example of a public good? Briefly explain.

A mobile phone is a

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?

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

Public schools, parks, libraries, and roads are paid for largely through tax revenue because