Question 1

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

Accepted Answer

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) A) and D)
F) A) and C)

Question 2

Both public goods and common resources are

Accepted Answer

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

Question 3

Neither public goods nor common resources are

Accepted Answer

A)  excludable,but only public goods are not rival in consumption.
B)  excludable,but only common resources are not rival in consumption.
C)  rival in consumption,but only public goods are not excludable.
D)  rival in consumption,but only common resources are not excludable.E) C) and D)
F) B) and C)

Question 4

Place each of the following in the correct location in the table. 
a. Congested toll roads
b. Knowledge
c. Fish in the ocean
d. National defense
e. Congested non-toll roads
f. Cable TV
g. The environment
h. Fire protection
i. Ice-cream cones
j. Uncongested toll roads
k. Clothing
1. Uncongested non-toll roads

Accepted Answer

The answer of Place each of the following in the...

Question 5

Excludability is the property of a good whereby

Accepted Answer

A)  one person's use diminishes other peoples' use.
B)  a person can be prevented from using it.
C)  a good is private,not public.
D)  a good is public,not private.E) A) and D)
F) None of the above

Question 6

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

Accepted Answer

A) True 
 B)False

Question 7

Knowledge is an example of a

Accepted Answer

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

Question 8

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 9

Three business people meet for lunch at an Indian restaurant.They decide that each person will order an item off the menu,and they will share all dishes.They will split the cost of the final bill evenly among each of the people at the table.When the food is delivered to the table,each person faces incentives similar to the

Accepted Answer

A)  consumption of a common resource good.
B)  production of a public good.
C)  consumption of a club good.
D)  production of a private good.E) B) and C)
F) A) and D)

Question 10

A tax on gasoline often reduces road congestion because gasoline

Accepted Answer

A)  and driving are complements.
B)  and driving are substitutes.
C)  is a normal good,while driving is an inferior good.
D)  is an inferior good,while driving is a normal good.E) None of the above
F) A) and B)

Question 11

Economists think that the best way to determine the value of a human life is to

Accepted Answer

A)  evaluate the value of a person's expected earnings in the labor market.
B)  evaluate the risks people are willing to take and what they would have to be paid to take them.
C)  determine a person's accumulated wealth at the time of death.
D)  do nothing; human life is priceless.E) A) and B)
F) A) and C)

Question 12

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) A) and C)
F) A) and D)

Question 13

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Accepted Answer

A) True 
 B)False

Question 14

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?

Accepted Answer

A)  Assign each person in the building a time when they are allowed to use the stairwell.
B)  Encourage people to voluntarily keep off the stairwell during peak times.
C)  Charge everyone who uses the stairwell when it is congested the same fee.People who value the use of the stairs the most will be the ones who use the stairwell at peak times.
D)  Hold a lottery to determine who wins the right to use the stairwell at peak times.E) A) and B)
F) A) and C)

Question 15

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Accepted Answer

The government assigns and protects the ...

Question 16

Private decisions about consumption of common resources and production of public goods usually lead to an

Accepted Answer

A)  efficient allocation of resources and external effects.
B)  efficient allocation of resources and no external effects.
C)  inefficient allocation of resources and external effects.
D)  inefficient allocation of resources and no external effects.E) B) and C)
F) None of the above

Question 17

Before considering any public project,the government should
(i) compare the total cost and total benefits of the project.
(ii) conduct a cost-benefit analysis.
(iii) infer that citizens who vote for a project are willing to pay equally for it.

Accepted Answer

A)  (i) only
B)  (ii) only
C)  (i) and (ii) only
D)  (i) ,(ii) ,and (iii) E) A) and D)
F) A) and C)

Question 18

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

Question 19

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population.Which of the following statements is not correct?

Accepted Answer

A)  Lobsters are rival but not excludable.
B)  The lobster population is an example of the tragedy of the commons.
C)  Reducing the quota on the number of lobsters any fisher can catch would have a protective effect on the lobster population.
D)  If left unregulated,the lobster population will likely increase.E) B) and C)
F) B) and D)

Question 20

Consider a good for which the number of people who benefit from the good is large and the exclusion of any one those people is impossible.In this case,the market for this good will likely

Accepted Answer

A)  be provided by a private firm rather than the government.
B)  have a free-rider problem.
C)  not exist.
D)  be limited to a small number of units of production.E) All of the above
F) C) and D)

Exam 11: Public Goods and Common Resources

Excludability is the property of a good whereby

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population.Which of the following statements is not correct?

Correct Answer
verified

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

Correct Answer
verified

Before considering any public project,the government should (i) compare the total cost and total benefits of the project. (ii) conduct a cost-benefit analysis. (iii) infer that citizens who vote for a project are willing to pay equally for it.

Correct Answer
verified

Private decisions about consumption of common resources and production of public goods usually lead to an

Correct Answer
verified

Consider a good for which the number of people who benefit from the good is large and the exclusion of any one those people is impossible.In this case,the market for this good will likely

Correct Answer
verified

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Correct Answer
verified
The government assigns and protects the ...
View Answer

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?

Correct Answer
verified

Both public goods and common resources are

Correct Answer
verified

Knowledge is an example of a

Correct Answer
verified

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Correct Answer
verified

A tax on gasoline often reduces road congestion because gasoline

Correct Answer
verified

Correct Answer
verified

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
verified

Private goods are both

Correct Answer
verified

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

Correct Answer
verified

Economists think that the best way to determine the value of a human life is to

Correct Answer
verified

Neither public goods nor common resources are

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Excludability is the property of a good whereby

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population.Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Before considering any public project,the government should (i) compare the total cost and total benefits of the project. (ii) conduct a cost-benefit analysis. (iii) infer that citizens who vote for a project are willing to pay equally for it.

Correct AnswerverifiedShow Answer

Private decisions about consumption of common resources and production of public goods usually lead to an

Correct AnswerverifiedShow Answer

Consider a good for which the number of people who benefit from the good is large and the exclusion of any one those people is impossible.In this case,the market for this good will likely

Correct AnswerverifiedShow Answer

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Correct AnswerverifiedThe government assigns and protects the ...View AnswerShow Answer

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?

Correct AnswerverifiedShow Answer

Both public goods and common resources are

Correct AnswerverifiedShow Answer

Knowledge is an example of a

Correct AnswerverifiedShow Answer

One possible solution to the problem of protecting a common resource is to convert that resource to a private good.

Correct AnswerverifiedShow Answer

A tax on gasoline often reduces road congestion because gasoline

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Private goods are both

Correct AnswerverifiedShow Answer

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

Correct AnswerverifiedShow Answer

Economists think that the best way to determine the value of a human life is to

Correct AnswerverifiedShow Answer

Neither public goods nor common resources are

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The government assigns and protects the ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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