Question 1

Roads can be considered either public goods or common resources, depending on how congested they are.

Accepted Answer

A) True 
 B)False

Question 2

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 C)
F) B) and D)

Question 3

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Accepted Answer

A) True 
 B)False

Question 4

Resources tend to be allocated inefficiently when goods

Accepted Answer

A)   are private goods.
B)   are rival in consumption and excludable.
C)   are available free of charge.
D)   are available only at very high prices.E) A) and D)
F) A) and C) C

Question 5

Which two types of goods are excludable?

Accepted Answer

Private go...

Question 6

By driving onto a congested road for which no toll is charged, a driver

Accepted Answer

A)   contributes to the overuse of a common resource.
B)   contributes to a negative-externality problem.
C)   is inflicting additional time cost on all of the other drivers.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 7

Table 11-5
A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip.
 
-Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $750 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. Which of the following statements is correct?

Accepted Answer

A)   The owner of Restaurant 1 would prefer to have 3 ferry trips.
B)   The owner of Restaurant 2 would prefer to have 2 ferry trips.
C)   The owner of Store A would prefer to have 1 ferry trip.
D)   All of the above are correct.E) A) and B)
F) C) and D) C

Question 8

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Accepted Answer

A)   taxing the use of the common resource
B)   turning the common resource into a club good
C)   turning the common resource into a private good
D)   regulating the use of the common resourceE) B) and C)
F) C) and D) B

Question 9

Goods that are rival in consumption include both

Accepted Answer

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

Question 10

Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

Accepted Answer

Basic research is ne...

Question 11

The town of Isle is on a small island connected to Big City by a single bridge. Most of the residents of Isle work in Big City. As a result, the bridge becomes very congested for 2 hours each day at the typical morning and evening commute times. Which of the following policies considered by the mayor of Isle would likely be most effective in alleviating the congestion?

Accepted Answer

A)   A fixed toll for the bridge payable by every vehicle crossing the bridge at all days and times.
B)   A variable toll for the bridge payable only by vehicles crossing the bridge during the congested commute times.
C)   Any vehicle crossing the bridge at any time must have a sticker paid for with a one-time fee of $25.
D)   A press conference in which the mayor requests that people try to cross the bridge earlier or later than the typical commute times.E) B) and C)
F) All of the above

Question 12

Scenario 11-3
Consider the following goods:
• a fish fillet served at a restaurant
• fish in the ocean
• exotic fish in a huge aquarium in a privately-owned building
-Refer to Scenario 11-3. Which of these goods is the best example of a common resource? Briefly explain.

Accepted Answer

Fish in the ocean is the best ...

Question 13

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...

Question 14

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 private good? Briefly explain.

Accepted Answer

A firefighter's helmet is the ...

Question 15

Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?

Accepted Answer

A)   Hire the firefighter because additional fire protection is priceless.
B)   Hire the firefighter if the cost of the new firefighter is less than $75,000.
C)   Do not hire the firefighter because the costs exceed the benefits.
D)   Hire the firefighter only if the benefit to the residents exceeds $75,000.E) A) and B)
F) A) and C)

Question 16

It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that

Accepted Answer

A)   resources would be used more efficiently if the government produced the weapons.
B)   resources would be used more efficiently if private firms provided national defense.
C)   weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable.
D)   national defense is rival in consumption and excludable, but weapons are not rival in consumption and not excludable.E) A) and B)
F) B) and D)

Question 17

A sidewalk runs across Jermichael's front yard near the street. By law, anyone has the right to use the sidewalk. When Jermichael shovels the sidewalk after a heavy snowstorm,

Accepted Answer

A)   he is providing a good that is excludable.
B)   he is a free rider.
C)   those who walk on the sidewalk are using a club good.
D)   he is providing a good that is not rival and not excludable.E) A) and C)
F) C) and D)

Question 18

Which of the following is not a reason why government agencies subsidize basic research?

Accepted Answer

A)   The private market devotes too few resources to basic research.
B)   The general knowledge developed through basic research can be used without charge.
C)   The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies.
D)   The government wants to attract the brightest researchers away from private research firms.E) B) and D)
F) A) and C)

Question 19

A lighthouse might be considered a private good if

Accepted Answer

A)   there is a second lighthouse nearby, thus preventing a monopoly.
B)   the owner of the lighthouse is able to exclude beneficiaries from receiving the benefits of the lighthouse.
C)   ships are able to enjoy the benefits of the lighthouse without paying for the benefit.
D)   a nearby port authority is able to avoid paying any fees to the lighthouse owner.E) A) and B)
F) C) and D)

Question 20

Figure 11-1

-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) A) and B)
F) A) and C)

Exam 11: Public Goods and Common Resources

Roads can be considered either public goods or common resources, depending on how congested they are.

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

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Correct Answer
verified

Resources tend to be allocated inefficiently when goods

Correct Answer
verified
C

Which two types of goods are excludable?

Correct Answer
verified
Private go...
View Answer

By driving onto a congested road for which no toll is charged, a driver

Correct Answer
verified

Correct Answer
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C

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Correct Answer
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B

Goods that are rival in consumption include both

Correct Answer
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Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

Correct Answer
verified
Basic research is ne...
View Answer

Correct Answer
verified

Scenario 11-3 Consider the following goods: • a fish fillet served at a restaurant • fish in the ocean • exotic fish in a huge aquarium in a privately-owned building -Refer to Scenario 11-3. Which of these goods is the best example of a common resource? Briefly explain.

Correct Answer
verified
Fish in the ocean is the best ...
View 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 Answer
verified
According to these studies, th...
View Answer

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 private good? Briefly explain.

Correct Answer
verified
A firefighter's helmet is the ...
View Answer

Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?

Correct Answer
verified

It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that

Correct Answer
verified

A sidewalk runs across Jermichael's front yard near the street. By law, anyone has the right to use the sidewalk. When Jermichael shovels the sidewalk after a heavy snowstorm,

Correct Answer
verified

Which of the following is not a reason why government agencies subsidize basic research?

Correct Answer
verified

A lighthouse might be considered a private good if

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1. The box labeled C represents

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Roads can be considered either public goods or common resources, depending on how congested they are.

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

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Correct AnswerverifiedShow Answer

Resources tend to be allocated inefficiently when goods

Correct AnswerverifiedC

Which two types of goods are excludable?

Correct AnswerverifiedPrivate go...View AnswerShow Answer

By driving onto a congested road for which no toll is charged, a driver

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

Which of the following is not a typical solution to the "Tragedy of the Commons?"

Correct AnswerverifiedB

Goods that are rival in consumption include both

Correct AnswerverifiedShow Answer

Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

Correct AnswerverifiedBasic research is ne...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Scenario 11-3 Consider the following goods: • a fish fillet served at a restaurant • fish in the ocean • exotic fish in a huge aquarium in a privately-owned building -Refer to Scenario 11-3. Which of these goods is the best example of a common resource? Briefly explain.

Correct AnswerverifiedFish in the ocean is the best ...View AnswerShow 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

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 private good? Briefly explain.

Correct AnswerverifiedA firefighter's helmet is the ...View AnswerShow Answer

Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?

Correct AnswerverifiedShow Answer

It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that

Correct AnswerverifiedShow Answer

A sidewalk runs across Jermichael's front yard near the street. By law, anyone has the right to use the sidewalk. When Jermichael shovels the sidewalk after a heavy snowstorm,

Correct AnswerverifiedShow Answer

Which of the following is not a reason why government agencies subsidize basic research?

Correct AnswerverifiedShow Answer

A lighthouse might be considered a private good if

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1. The box labeled C represents

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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Private go...
View Answer

Correct Answer
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C

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B

Correct Answer
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Correct Answer
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Basic research is ne...
View Answer

Correct Answer
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Correct Answer
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Fish in the ocean is the best ...
View Answer

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

Correct Answer
verified
A firefighter's helmet is 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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