Question 1

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

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

Question 3

Goods that are not rival in consumption include both

Accepted Answer

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

Question 4

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. Do any of these goods cause an externality? If so, which one(s)? Positive or negative? Briefly explain.

Accepted Answer

The exotic fish in the huge aquarium res...

Question 5

The government provides public goods because

Accepted Answer

A)  private markets are incapable of producing these types of goods.
B)  free-riders make it difficult for private markets to supply the socially optimal quantity.
C)  markets are always better off with some government oversight.
D)  external benefits will accrue to private producers.E) A) and C)
F) None of the above

Question 6

Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?

Accepted Answer

A tornado siren is n...

Question 7

A cost-benefit analysis of a highway is difficult to conduct because analysts

Accepted Answer

A)  cannot estimate the explicit cost of a project that has not been completed.
B)  are unlikely to have access to costs on similar projects.
C)  are not able to consider the opportunity cost of resources.
D)  will have difficulty estimating the value of the highway.E) B) and C)
F) A) and C)

Question 8

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 $100 per hour. How many hours should be spent cleaning the lake to maximize total surplus for the residents in Widgetapolis?

Accepted Answer

A)  2 hours
B)  3 hours
C)  4 hours
D)  5 hoursE) B) and C)
F) A) and B)

Question 9

Which of the following is most likely to face extinction?

Accepted Answer

A)  dogs living as pets in households
B)  dairy cows living on farms and producing milk
C)  bald eagles living in zoos
D)  tigers living in the wildE) B) and C)
F) None of the above

Question 10

Markets do not ensure that the air we breathe is clean because

Accepted Answer

A)  clean air has no value.
B)  the government prevents markets from doing so.
C)  property rights are not well established for clean air.
D)  clean air is impossible to produce .E) B) and C)
F) All of the above

Question 11

Figure 11-1 
-Refer to Figure 11-1. With which of the boxes - A, B, C, or D - do we associate the Tragedy of the Commons?

Accepted Answer

We associate the Tra...

Question 12

Which of the following goods is rival in consumption and excludable?

Accepted Answer

A)  a fireworks display
B)  national defense
C)  a box of sparklers
D)  a paradeE) A) and C)
F) A) and B)

Question 13

Figure 11-1 
-Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong?

Accepted Answer

A mathematical theor...

Question 14

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 $380 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s)  would be opposed to planting any trees?

Accepted Answer

A)  only Davis
B)  only Adams and Davis
C)  only Adams, Benitez, and Davis
D)  Adams, Benitez, Chen, and DavisE) A) and D)
F) B) and C)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

Accepted Answer

A)  allow individual shepherds to choose their own flock sizes.
B)  internalize the externality by subsidizing the production of sheep's wool.
C)  auction off a limited number of sheep-grazing permits.
D)  wait until the market corrects the problem.E) A) and B)
F) A) and C)

Question 17

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 club good? Briefly explain.

Accepted Answer

The exotic fish in the huge aq...

Question 18

National defense is provided by the government because

Accepted Answer

A)  it is impossible for private markets to produce public goods.
B)  products provided by the government are produced more efficiently.
C)  free-riders make it difficult for private markets to supply the socially optimal quantity.
D)  public goods increase government revenues.E) A) and B)
F) C) and D)

Question 19

What causes the Tragedy of the Commons? (i) 
Social and private incentives differ.
(ii) 
Common resources are not rival in consumption and are not excludable.(iii) 
Common resources are not excludable but are rival in consumption.

Accepted Answer

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

Question 20

The phenomenon of free riding is most closely associated with which type of good?

Accepted Answer

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

Exam 11: Public Goods and Common Resources

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 club good? Briefly explain.

Correct Answer
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The exotic fish in the huge aq...
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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. Do any of these goods cause an externality? If so, which one(s)? Positive or negative? Briefly explain.

Correct Answer
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The exotic fish in the huge aquarium res...
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Figure 11-1 -Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong?

Correct Answer
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A mathematical theor...
View Answer

A tax on gasoline often reduces road congestion because gasoline

Correct Answer
verified

A cable television broadcast of a movie is

Correct Answer
verified

A cost-benefit analysis of a highway is difficult to conduct because analysts

Correct Answer
verified

The phenomenon of free riding is most closely associated with which type of good?

Correct Answer
verified

Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?

Correct Answer
verified
A tornado siren is n...
View Answer

Correct Answer
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Which of the following goods is rival in consumption and excludable?

Correct Answer
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The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

Correct Answer
verified

Which of the following is most likely to face extinction?

Correct Answer
verified

Correct Answer
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Goods that are not rival in consumption include both

Correct Answer
verified

The government provides public goods because

Correct Answer
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Markets do not ensure that the air we breathe is clean because

Correct Answer
verified

National defense is provided by the government because

Correct Answer
verified

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

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1. With which of the boxes - A, B, C, or D - do we associate the Tragedy of the Commons?

Correct Answer
verified
We associate the Tra...
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What causes the Tragedy of the Commons? (i) Social and private incentives differ. (ii) Common resources are not rival in consumption and are not excludable.(iii) Common resources are not excludable but are rival in consumption.

Correct Answer
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Exam 11: Public Goods and Common Resources

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 club good? Briefly explain.

Correct AnswerverifiedThe exotic fish in the huge aq...View AnswerShow Answer

Correct AnswerverifiedThe exotic fish in the huge aquarium res...View AnswerShow Answer

Figure 11-1 -Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong?

Correct AnswerverifiedA mathematical theor...View AnswerShow Answer

A tax on gasoline often reduces road congestion because gasoline

Correct AnswerverifiedShow Answer

A cable television broadcast of a movie is

Correct AnswerverifiedShow Answer

A cost-benefit analysis of a highway is difficult to conduct because analysts

Correct AnswerverifiedShow Answer

The phenomenon of free riding is most closely associated with which type of good?

Correct AnswerverifiedShow Answer

Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?

Correct AnswerverifiedA tornado siren is n...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following goods is rival in consumption and excludable?

Correct AnswerverifiedShow Answer

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

Correct AnswerverifiedShow Answer

Which of the following is most likely to face extinction?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Goods that are not rival in consumption include both

Correct AnswerverifiedShow Answer

The government provides public goods because

Correct AnswerverifiedShow Answer

Markets do not ensure that the air we breathe is clean because

Correct AnswerverifiedShow Answer

National defense is provided by the government because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1. With which of the boxes - A, B, C, or D - do we associate the Tragedy of the Commons?

Correct AnswerverifiedWe associate the Tra...View AnswerShow Answer

What causes the Tragedy of the Commons? (i) Social and private incentives differ. (ii) Common resources are not rival in consumption and are not excludable.(iii) Common resources are not excludable but are rival in consumption.

Correct AnswerverifiedShow Answer

Correct Answer
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The exotic fish in the huge aq...
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Correct Answer
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The exotic fish in the huge aquarium res...
View Answer

Correct Answer
verified
A mathematical theor...
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
A tornado siren is n...
View 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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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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We associate the Tra...
View Answer

Correct Answer
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