Question 1

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) A) and C)

Question 2

The ocean remains one of the largest unregulated resources for each of the following reasons except

Accepted Answer

A)   many countries have access to the ocean.
B)   it is difficult to get international cooperation among countries that hold different values.
C)   the oceans are so vast that enforcing any agreements would be difficult.
D)   All of the above are reasons the ocean remains one of the largest unregulated resources.E) None of the above
F) B) and D)

Question 3

The Occupational Safety and Health Administration (OSHA)  has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of fertilizer is 0.008. The cost of imposing a regulation that would ban the chemical is $32 million. If the value of a human life is equal to $10 million, how many people must the policy affect in order for the benefits to exceed the costs?

Accepted Answer

A)   256
B)   401
C)   3201
D)   4001E) None of the above
F) A) and D)

Question 4

People cannot be prevented from using a good if the good is

Accepted Answer

A)   a private good or a public good.
B)   a private good or a common resource.
C)   a public good or a common resource.
D)   a public good or a club good.E) None of the above
F) A) and D)

Question 5

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

Accepted Answer

A)   a wristwatch
B)   fire protection in a small town
C)   fish in the ocean
D)   efforts to fight povertyE) A) and B)
F) All of the above

Question 6

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes Yes     No -Refer to Figure 11-1. The box labeled D represents A)  private goods. B)  club goods. C)  common resources. D)  public goods." class="answers-bank-image d-inline" rel="preload" > Yes     No -Refer to Figure 11-1. The box labeled D represents A)  private goods. B)  club goods. C)  common resources. D)  public goods." class="answers-bank-image d-inline" rel="preload" > No
-Refer to Figure 11-1. The box labeled D represents

Accepted Answer

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

Question 7

An example of the "Tragedy of the Commons" is litter in the picnic area of a local park.

Accepted Answer

A) True 
 B)False

Question 8

What do we mean when we say that a good is excludable?

Accepted Answer

A good is excludable...

Question 9

Why has the value of ivory threatened the extinction of the elephant, whereas the value of beef has enhanced the survival of the cow?

Accepted Answer

A)   Cows are a common resource, whereas elephants are owned by governments.
B)   Elephants are larger than cows, requiring more economic resources.
C)   Elephants live in Africa, where economic resources are scarce.
D)   Elephants are a common resource, whereas cows are privately owned.E) B) and C)
F) A) and D)

Question 10

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) A) and C)

Question 11

The goal of requiring licenses for hunting and fishing is

Accepted Answer

A)   to reduce the use of a common resource.
B)   to ensure that the people hunting and fishing are qualified.
C)   to generate revenue for the government.
D)   to monitor compliance with federal gun laws.E) None of the above
F) C) and D)

Question 12

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Accepted Answer

A) True 
 B)False

Question 13

The degradation of the environment from litter is a

Accepted Answer

A)   a negative externality.
B)   free rider problem.
C)   Tragedy of the Commons.
D)   Both a and c are correct.E) A) and B)
F) C) and D)

Question 14

If everyone benefits from helping the poor,

Accepted Answer

A)   government intervention cannot improve social well-being.
B)   eliminating taxes aimed at redistributing income will make rich people better off.
C)   taxing the wealthy to raise living standards of the poor can potentially make everyone better off.
D)   private markets can adequately provide charity programs to help the poor, despite free-rider problems.E) A) and B)
F) B) and C)

Question 15

An absence of property rights often leads to market failure. When this is the case, how does society usually solve the problem?

Accepted Answer

The solution to the problem us...

Question 16

Table 11-1
Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident's willingness to pay for each acre of the park. 
-Refer to Table 11-1. Suppose the cost to build the park is $24 per acre. How many acres should the park be to maximize total surplus from the park in Springfield?

Accepted Answer

A)   1 acres
B)   2 acres
C)   3 acres
D)   4 acresE) All of the above
F) B) and D)

Question 17

Which of the following statements is true of the tax on gasoline?

Accepted Answer

A)   The cost of collecting a gasoline tax outweighs the revenues raised by the tax.
B)   It is preferred to tolls as the best solution to road congestion.
C)   It discourages driving on noncongested roads, even though there is no congestion externality for these roads.
D)   Both b and c are correct.E) B) and C)
F) A) and B)

Question 18

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

Accepted Answer

A) True 
 B)False

Question 19

Free goods are usually efficiently allocated without government intervention.

Accepted Answer

A) True 
 B)False

Question 20

One of the least regulated common resources today is

Accepted Answer

A)   state parks.
B)   the ocean.
C)   forest preserves.
D)   the Great Lakes.E) B) and C)
F) A) and C)

Exam 11: Public Goods and Common Resources

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

Correct Answer
verified

An absence of property rights often leads to market failure. When this is the case, how does society usually solve the problem?

Correct Answer
verified
The solution to the problem us...
View Answer

If everyone benefits from helping the poor,

Correct Answer
verified

The degradation of the environment from litter is a

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

Correct Answer
verified

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

Correct Answer
verified

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

Correct Answer
verified

Figure 11-1 Rival in Consumption? Yes No Excludable? ^Yes No -Refer to Figure 11-1. The box labeled D represents

Correct Answer
verified

Why has the value of ivory threatened the extinction of the elephant, whereas the value of beef has enhanced the survival of the cow?

Correct Answer
verified

Correct Answer
verified

One of the least regulated common resources today is

Correct Answer
verified

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Correct Answer
verified

The ocean remains one of the largest unregulated resources for each of the following reasons except

Correct Answer
verified

Which of the following statements is true of the tax on gasoline?

Correct Answer
verified

People cannot be prevented from using a good if the good is

Correct Answer
verified

An example of the "Tragedy of the Commons" is litter in the picnic area of a local park.

Correct Answer
verified

What do we mean when we say that a good is excludable?

Correct Answer
verified
A good is excludable...
View Answer

The goal of requiring licenses for hunting and fishing is

Correct Answer
verified

Free goods are usually efficiently allocated without government intervention.

Correct Answer
verified

Exam 11: Public Goods and Common Resources

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

Correct AnswerverifiedShow Answer

An absence of property rights often leads to market failure. When this is the case, how does society usually solve the problem?

Correct AnswerverifiedThe solution to the problem us...View AnswerShow Answer

If everyone benefits from helping the poor,

Correct AnswerverifiedShow Answer

The degradation of the environment from litter is a

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

Correct AnswerverifiedShow Answer

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

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

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. The box labeled D represents

Correct AnswerverifiedShow Answer

Why has the value of ivory threatened the extinction of the elephant, whereas the value of beef has enhanced the survival of the cow?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One of the least regulated common resources today is

Correct AnswerverifiedShow Answer

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Correct AnswerverifiedShow Answer

The ocean remains one of the largest unregulated resources for each of the following reasons except

Correct AnswerverifiedShow Answer

Which of the following statements is true of the tax on gasoline?

Correct AnswerverifiedShow Answer

People cannot be prevented from using a good if the good is

Correct AnswerverifiedShow Answer

An example of the "Tragedy of the Commons" is litter in the picnic area of a local park.

Correct AnswerverifiedShow Answer

What do we mean when we say that a good is excludable?

Correct AnswerverifiedA good is excludable...View AnswerShow Answer

The goal of requiring licenses for hunting and fishing is

Correct AnswerverifiedShow Answer

Free goods are usually efficiently allocated without government intervention.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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The solution to the problem us...
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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Figure 11-1 Rival in Consumption? Yes No Excludable? ^Yes No -Refer to Figure 11-1. The box labeled D represents

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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A good is excludable...
View Answer

Correct Answer
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Correct Answer
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