Question 1

Figure 11-1
 
-Refer to Figure 11-1.For which two boxes is it the case that externalities arise because something of value has no price attached to it?

Accepted Answer

A)   Box A and Box B
B)   Box A and Box C
C)   Box B and Box D
D)   Box C and Box DE) None of the above
F) A) and C)

Question 2

The enclosure movement in England in the 17th century represented an attempt to transform

Accepted Answer

A)   a public good into a private good.
B)   a private good into a public good.
C)   a private good into a common resource.
D)   a common resource into a private good.E) B) and D)
F) B) and C)

Question 3

Mitch hunts deer.His shotgun is

Accepted Answer

A)   a private good and the deer he hunts are common resources.
B)   a private good and the deer he hunts are public goods.
C)   rival in consumption and the deer he hunts are not rival in consumption.
D)   not rival in consumption and the deer he hunts are not rival in consumption.E) A) and B)
F) A) and C)

Question 4

Figure 11-1
 
-Refer to Figure 11-1.Which of the following items is not an example of the type of good represented by Box D?

Accepted Answer

A)   a mathematical theorem
B)   an uncongested toll road
C)   national defense
D)   fighting povertyE) B) and C)
F) None of the above

Question 5

The parable called the Tragedy of the Commons applies to goods such as

Accepted Answer

A)   fire protection and cable TV.
B)   tornado sirens and basic research.
C)   clean air and clean water.
D)   antipoverty programs and national defense.E) B) and C)
F) A) and D)

Question 6

Figure 11-1
 
-Refer to Figure 11-1.The more Jane uses good x,the less of that good there is for other people to use.Neither Jane nor anyone else can be prevented from using the good.Good x is an example of the type of good that belongs in

Accepted Answer

A)   Box A,which represents private goods.
B)   Box B,which represents common resources.
C)   Box C,which represents common resources.
D)   Box D,which represents public goods.E) B) and D)
F) B) and C)

Question 7

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 D)
F) A) and C)

Question 8

Goods that are rival in consumption and excludable would be considered

Accepted Answer

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

Question 9

The Tragedy of the Commons occurs because

Accepted Answer

A)   government property is most heavily used by the wealthy.
B)   everyone deserves an equal share of government property.
C)   social and private incentives differ.
D)   established property rights create competition.E) C) and D)
F) A) and B)

Question 10

Table 11-1
Consider the town of Anywhere with only three residents,Mary,Bill,and Tricia.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 $15 per acre and that the residents have agreed to split the cost of building the park equally.If the residents vote to determine the size of park to build,basing their decision solely on their own willingness to pay (and trying to maximize their own surplus) ,what is the largest park size for which the majority of residents would vote "yes?"

Accepted Answer

A)   1 acre
B)   2 acres
C)   3 acres
D)   4 acresE) B) and C)
F) A) and B)

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) All of the above
F) None of the above

Question 12

The failure of markets to adequately protect the environment can viewed either as a problem of

Accepted Answer

A)   externalities or as a problem of common resources.
B)   externalities or as a problem of private goods.
C)   the overprovision of public goods or as a problem of the underprovision of private goods.
D)   club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity.E) A) and C)
F) None of the above

Question 13

An economics professor,upset about the rising cost of textbooks,proposed that his department purchase 50 copies of a statistics book so the students in the statistics class would not have to purchase their own books but rather could borrow a book for the semester and then return it for the next class to use.Which of the following strategies would not prevent a common resource problem with the textbooks?

Accepted Answer

A)   Students will be required to pay a deposit for the textbook,which is refundable at the end of the semester when the book is returned in good condition.
B)   The textbooks are placed in a common area of the department so students can borrow and return them as needed.
C)   Students must sign a form agreeing to return the book or pay a fine equal to the replacement cost of the book.
D)   The textbooks are placed in the professor's office and will only be given to students who are registered members of the class.These students will not receive their final course grades until the books are returned.E) A) and B)
F) B) and C)

Question 14

The Tragedy of the Commons

Accepted Answer

A)   occurs most often with public goods.
B)   is only applicable to shared grazing rights among sheep herders.
C)   is eliminated when property rights are assigned to individuals.
D)   occurs when social incentives are in line with private incentives.E) B) and C)
F) A) and B)

Question 15

Which of the following is not a characteristic of a public good?

Accepted Answer

A)   It is nonexcludable.
B)   It is not diminished or depreciated as additional people consume the good.
C)   Its benefits cannot be withheld from anyone.
D)   Because it is a free good,there is no opportunity cost.E) B) and C)
F) A) and C)

Question 16

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 $70 per day.How many guards should be hired to maximize the total surplus of the four store owners?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) B) and D)
F) A) and B)

Question 17

Which of the following statements is not correct?

Accepted Answer

A)   Environmental degradation is an example of the Tragedy of the Commons.
B)   Cost-benefit analysis is an important tool that economists use to evaluate the benefits of providing a public good.
C)   Some goods,such as lighthouses,may be either private or public goods.
D)   The free-rider problem prevents governments from supplying public goods.E) A) and B)
F) None of the above

Question 18

In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates) .In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

Accepted Answer

A)   On the questionnaire,some residents are likely to exaggerate the value they associate with the park.
B)   On the questionnaire,some residents are likely to exaggerate the costs they associate with the park.
C)   The use of such a questionnaire in cost-benefit analysis is likely to produce only rough approximations of residents' perceptions of the costs and benefits of a park.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 19

Table 11-1
Consider the town of Anywhere with only three residents,Mary,Bill,and Tricia.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 $33 per acre and that the residents have agreed to split the cost of building the park equally.If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park,how much total surplus will Mary receive?

Accepted Answer

A)   -$6
B)   -$3
C)   $3
D)   $10E) C) and D)
F) B) and C)

Question 20

In determining whether and how much of a public good to provide,cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not an example of the type of good represented by Box D?

Correct Answer
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Figure 11-1 -Refer to Figure 11-1.For which two boxes is it the case that externalities arise because something of value has no price attached to it?

Correct Answer
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The Tragedy of the Commons

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The failure of markets to adequately protect the environment can viewed either as a problem of

Correct Answer
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In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates) .In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

Correct Answer
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The degradation of the environment from litter is a

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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The parable called the Tragedy of the Commons applies to goods such as

Correct Answer
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Goods that are rival in consumption and excludable would be considered

Correct Answer
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The enclosure movement in England in the 17^th century represented an attempt to transform

Correct Answer
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The Tragedy of the Commons occurs because

Correct Answer
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Mitch hunts deer.His shotgun is

Correct Answer
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In determining whether and how much of a public good to provide,cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Correct Answer
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Figure 11-1 -Refer to Figure 11-1.The more Jane uses good x,the less of that good there is for other people to use.Neither Jane nor anyone else can be prevented from using the good.Good x is an example of the type of good that belongs in

Correct Answer
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Which of the following is not a characteristic of a public good?

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Exam 11: Public Goods and Common Resources

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not an example of the type of good represented by Box D?

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1.For which two boxes is it the case that externalities arise because something of value has no price attached to it?

Correct AnswerverifiedShow Answer

The Tragedy of the Commons

Correct AnswerverifiedShow Answer

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The failure of markets to adequately protect the environment can viewed either as a problem of

Correct AnswerverifiedShow Answer

In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates) .In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The degradation of the environment from litter is a

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

The parable called the Tragedy of the Commons applies to goods such as

Correct AnswerverifiedShow Answer

Goods that are rival in consumption and excludable would be considered

Correct AnswerverifiedShow Answer

The enclosure movement in England in the 17th century represented an attempt to transform

Correct AnswerverifiedShow Answer

The Tragedy of the Commons occurs because

Correct AnswerverifiedShow Answer

Mitch hunts deer.His shotgun is

Correct AnswerverifiedShow Answer

In determining whether and how much of a public good to provide,cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1.The more Jane uses good x,the less of that good there is for other people to use.Neither Jane nor anyone else can be prevented from using the good.Good x is an example of the type of good that belongs in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of a public good?

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Correct AnswerverifiedShow Answer

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The enclosure movement in England in the 17^th century represented an attempt to transform

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