Question 1

The type of good that is most likely to be subject to market failure is:

Accepted Answer

A)   a public good.
B)   a private good.
C)   an uncommon resource.
D)   a factor of productionE) None of the above
F) B) and C)

Question 2

One way the government decides how to pay for a public good is:

Accepted Answer

A)   the ease of collecting payout.
B)   if they can make the good excludable and charge its users.
C)   the transfer of surplus.
D)   All of these are ways the government allocates payment of public goods.E) B) and C)
F) None of the above

Question 3

Most goods are:

Accepted Answer

A)   exclusive.
B)   public goods.
C)   rival in consumption.
D)   nonrival in consumption.E) C) and D)
F) None of the above

Question 4

When a good is not easily excludable,what people pay for it will:

Accepted Answer

A)   reflect the real value they place on it.
B)   exactly equal the social benefit of the good.
C)   not necessarily reflect the real value they place on it.
D)   be greater than the social benefit of the good.E) B) and C)
F) None of the above

Question 5

If the marginal benefit were greater than the cost of a good:

Accepted Answer

A)   consumers could increase their utility by buying more.
B)   consumers could increase their utility by buying less.
C)   producers should decrease production.
D)   social net benefit would be maximized.E) None of the above
F) A) and B)

Question 6

The free-rider problem is triggered by being:

Accepted Answer

A)   nonexcludable.
B)   rival in consumption.
C)   excludable and rival in consumption.
D)   excludable and nonrival in consumption.E) B) and D)
F) C) and D)

Question 7

Wikipedia is an example of a:

Accepted Answer

A)   a public good.
B)   a private good.
C)   a common resource.
D)   an artificially scarce resource.E) None of the above
F) All of the above

Question 8

A smart phone would be considered:

Accepted Answer

A)   a common resource.
B)   a private good.
C)   a public good.
D)   an artificially scarce good.E) A) and B)
F) A) and C)

Question 9

If those who consumed common resources were subject to a tax that was equal to the external costs that they imposed due to the negative externality created:

Accepted Answer

A)   an efficient level would be reached.
B)   total surplus would be maximized for the whole society.
C)   individuals would consume less.
D)   All of these statements are true.E) C) and D)
F) A) and B)

Question 10

Goods that are rival in consumption and excludable are:

Accepted Answer

A)   a common resource.
B)   a private good.
C)   a public good.
D)   an artificially scarce good.E) A) and D)
F) A) and C)

Question 11

Public goods,when left to the private market will be:

Accepted Answer

A)   undersupplied.
B)   over consumed.
C)   under consumed.
D)   oversupplied.E) B) and C)
F) None of the above

Question 12

The free rider problem is caused by the:

Accepted Answer

A)   nonexcludability of a good leading to the undersupply of it.
B)   incentive to oversupply the good since it is nonrival in consumption.
C)   "rivalness" in consumption of a good leading to the overconsumption of that good.
D)   "rivalness" in consumption of a good leading to the undersupply of it.E) All of the above
F) A) and D)

Question 13

In a functioning market,people will buy a good up to the point where:

Accepted Answer

A)   the marginal benefit of each unit is equal to the marginal cost of each unit.
B)   the total benefit of the good is equal to the total cost of the good.
C)   the marginal benefit of the last unit is equal to the marginal cost of that unit.
D)   they can no longer afford it.E) A) and D)
F) B) and D)

Question 14

When the government bans a good:

Accepted Answer

A)   the cost of breaking the ban needs to be sufficiently low in order to be effective.
B)   it doesn't need to change the trade-offs consumers face.
C)   it will only be effective if it can be easily enforced.
D)   it should get approval from the community before exacting the ban to be more effective.E) B) and D)
F) A) and B)

Question 15

One "design principle" that makes informal,community-based solutions to public goods and common resource problems more effective is:

Accepted Answer

A)   clear distinctions between who is and is not allowed to access the resource.
B)   the participation of resource users in setting the rules for use.
C)   the ability of users to monitor one another.
D)   All of these are important to the effectiveness of community-based solutions.E) All of the above
F) C) and D)

Question 16

In 2009,the Nobel Prize in economics was awarded for work on the effectiveness of social norms in the management of commonly held property to:

Accepted Answer

A)   Arthur Pigou.
B)   Gary Becker.
C)   Elinor Ostrom.
D)   Ronald Coase.E) A) and D)
F) B) and C)

Question 17

Which of the following is not an example of a public good that the government has made excludable?

Accepted Answer

A)   Toll roads.
B)   City buses.
C)   State colleges.
D)   Fire Protection.E) A) and B)
F) A) and C)

Question 18

If the government runs an ad campaign to shame litterers,they are:

Accepted Answer

A)   wasting a lot of money.
B)   trying to get individuals to internalize the negative externality created by their decision to litter.
C)   using protectionist policy to help the trash-collecting industry.
D)   All of these statements are true.E) B) and C)
F) C) and D)

Question 19

Traffic lights would be considered:

Accepted Answer

A)   a common resource.
B)   a private good.
C)   a public good.
D)   an artificially scarce good.E) A) and D)
F) All of the above

Question 20

When the government bans a good:

Accepted Answer

A)   it is attempting to solve the nonexcludability problem.
B)   it makes acquiring that good illegal.
C)   the cost of breaking the ban changes the trade-offs consumers face.
D)   All of these statements are true.E) B) and D)
F) A) and C)

Exam 19: Public Goods and Common Resources

When the government bans a good:

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Goods that are rival in consumption and excludable are:

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The free-rider problem is triggered by being:

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In a functioning market,people will buy a good up to the point where:

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In 2009,the Nobel Prize in economics was awarded for work on the effectiveness of social norms in the management of commonly held property to:

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When a good is not easily excludable,what people pay for it will:

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If those who consumed common resources were subject to a tax that was equal to the external costs that they imposed due to the negative externality created:

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Most goods are:

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One "design principle" that makes informal,community-based solutions to public goods and common resource problems more effective is:

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When the government bans a good:

Correct AnswerverifiedShow Answer

If the government runs an ad campaign to shame litterers,they are:

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If the marginal benefit were greater than the cost of a good:

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A smart phone would be considered:

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Public goods,when left to the private market will be:

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The free rider problem is caused by the:

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Which of the following is not an example of a public good that the government has made excludable?

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One way the government decides how to pay for a public good is:

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Traffic lights would be considered:

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The type of good that is most likely to be subject to market failure is:

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Wikipedia is an example of a:

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