Question 1

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 2

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) All of the above
F) None of the above

Question 3

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial,legal,and entertainment district?

Accepted Answer

A)   Washington,D.C.
B)   Sydney
C)   Tokyo
D)   LondonE) A) and B)
F) B) and C)

Question 4

An FM radio signal is an example of a good that is

Accepted Answer

A)   private.
B)   nonrival in consumption.
C)   social.
D)   nonexcludable in production.E) A) and D)
F) B) and C)

Question 5

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 6

Governments can improve market outcomes for

Accepted Answer

A)   public goods but not common resources.
B)   common resources but not public goods.
C)   both public goods and common resources.
D)   neither public goods nor common resources.E) All of the above
F) A) and B)

Question 7

When something of value has no price attached to it,

Accepted Answer

A)   externalities will be present.
B)   production of the product has no cost.
C)   government should not intervene to produce the product.
D)   private companies will eventually produce the product,and the good will no longer be free.E) A) and B)
F) A) and C)

Question 8

Which two types of goods are rival in consumption?

Accepted Answer

Private goods and co...

Question 9

Table 11-5
A small strip mall contains four retail stores,and crime has recently been on the increase in the neighborhood of the strip mall.The owners of the four stores - Stores A,B,C,and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards.The table represents their willingness to pay,that is,the maximum amount that each store owner is willing to contribute,per day,to hire each security guard.
 
-Refer to Table 11-5.Suppose the cost to hire each individual guard is $100 per day.Then total surplus for the 4 store owners is

Accepted Answer

A)   $45 if 1 guard is hired.
B)   $60 if 2 guards are hired.
C)   $45 if 3 guards are hired.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 10

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

Question 11

Table 11-5
A small strip mall contains four retail stores,and crime has recently been on the increase in the neighborhood of the strip mall.The owners of the four stores - Stores A,B,C,and D - are considering contributing to a pool of money that will be used to hire up to 4 security guards.The table represents their willingness to pay,that is,the maximum amount that each store owner is willing to contribute,per day,to hire each security guard.
 
-Refer to Table 11-5.Suppose the cost to hire each guard is $120 per day and the 4 store owners have agreed to split the costs of hiring guards equally.How many guards would the owner of Store C prefer to hire?

Accepted Answer

A)   0
B)   1
C)   2
D)   3E) A) and D)
F) A) and C)

Question 12

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

Accepted Answer

A)   basic research is not a public good.
B)   the benefits of basic research are hard to measure.
C)   members of Congress usually have little expertise in science.
D)   Both b and c are correct.E) B) and C)
F) A) and C)

Question 13

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) C) and D)
F) B) and D)

Question 14

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Accepted Answer

A)   drive at times other than rush hour.
B)   use public transit rather than driving.
C)   drive more fuel-efficient cars.
D)   car-pool.E) A) and C)
F) A) and B)

Question 15

One way to eliminate the Tragedy of the Commons is to

Accepted Answer

A)   increase law enforcement in public areas.
B)   limit access to the commons.
C)   increase access to the commons.
D)   decrease taxes.E) All of the above
F) C) and D)

Question 16

Pollution is a negative externality,but it is not appropriate to view the problem of pollution as a common-resource problem.

Accepted Answer

A) True 
 B)False

Question 17

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) B) and C)

Question 18

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

Question 19

Table 11-2
Consider a small town with only three families,the Johnson family,the Marshall family,and the Walker family.The town does not currently have any streetlights so it is very dark at night.The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install.The table below shows each family's willingness to pay for each streetlight.
 
-Refer to Table 11-2.Suppose the cost to install each streetlight is $180 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Johnson's like the town to install?

Accepted Answer

A)   0 streetlights
B)   1 streetlight
C)   2 streetlights
D)   3 streetlightsE) B) and C)
F) All of the above

Question 20

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 ...

Exam 11: Public Goods and Common Resources

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

Correct Answer
verified

Correct Answer
verified

The government provides public goods because

Correct Answer
verified

Which two types of goods are rival in consumption?

Correct Answer
verified
Private goods and co...
View Answer

Governments can improve market outcomes for

Correct Answer
verified

Pollution is a negative externality,but it is not appropriate to view the problem of pollution as a common-resource problem.

Correct Answer
verified

Correct Answer
verified

An FM radio signal is an example of a good that is

Correct Answer
verified

National defense is provided by the government because

Correct Answer
verified

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

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

One way to eliminate the Tragedy of the Commons is to

Correct Answer
verified

Private goods are both

Correct Answer
verified

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial,legal,and entertainment district?

Correct Answer
verified

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Correct Answer
verified

When something of value has no price attached to it,

Correct Answer
verified

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

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

Correct Answer
verified

A tax on gasoline often reduces road congestion because gasoline

Correct Answer
verified

Exam 11: Public Goods and Common Resources

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The government provides public goods because

Correct AnswerverifiedShow Answer

Which two types of goods are rival in consumption?

Correct AnswerverifiedPrivate goods and co...View AnswerShow Answer

Governments can improve market outcomes for

Correct AnswerverifiedShow Answer

Pollution is a negative externality,but it is not appropriate to view the problem of pollution as a common-resource problem.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An FM radio signal is an example of a good that is

Correct AnswerverifiedShow Answer

National defense is provided by the government because

Correct AnswerverifiedShow Answer

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

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

One way to eliminate the Tragedy of the Commons is to

Correct AnswerverifiedShow Answer

Private goods are both

Correct AnswerverifiedShow Answer

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial,legal,and entertainment district?

Correct AnswerverifiedShow Answer

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Correct AnswerverifiedShow Answer

When something of value has no price attached to it,

Correct AnswerverifiedShow Answer

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

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

Correct AnswerverifiedShow Answer

A tax on gasoline often reduces road congestion because gasoline

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Private goods and co...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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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