Question 1

Which of the following public goods would be the easiest for the government to make excludable?

Accepted Answer

A)  City buses
B)  Sewer systems
C)  Police protection
D)  National DefenseE) All of the above
F) B) and C)

Question 2

A government will use its power to make up for the inadequate supply of a good to:

Accepted Answer

A)  establish a presence as a producer in virtually every market.
B)  enhance efficiency in markets for public goods.
C)  compete with local businesses.
D)  None of these statements is true.E) A) and B)
F) A) and C) B

Question 3

Local governments, rather than private citizens, are typically the providers of large fireworks displays. This is because fireworks displays: suffer from the free rider problem. are non-excludable. are rival in consumption.

Accepted Answer

A)  II only
B)  I and II only
C)  I and III only
D)  I, II, and IIIE) None of the above
F) A) and B) B

Question 4

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

Accepted Answer

A)  undersupplied.
B)  overconsumed.
C)  underconsumed.
D)  oversupplied.E) A) and B)
F) B) and D)

Question 5

Which of the following is an excludable good or service?

Accepted Answer

A)  A movie in a theater
B)  A city park
C)  A rainbow
D)  A levee systemE) B) and C)
F) None of the above A

Question 6

The combination of inefficiently high demand and dwindling quantity leads to what is called:

Accepted Answer

A)  the free rider problem.
B)  nonexcludable consumption.
C)  rivalry in consumption.
D)  the tragedy of the commons.E) None of the above
F) All of the above

Question 7

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 to consume any more units.E) None of the above
F) A) and C)

Question 8

Which of the following goods is most likely to be overconsumed?

Accepted Answer

A)  Fish in the ocean
B)  Chickens on a farm
C)  Horses on a ranch
D)  Water from a reservoirE) A) and B)
F) B) and C)

Question 9

When a good is rival in consumption:

Accepted Answer

A)  one person's consumption of the good prevents or decreases the ability of others to consume it.
B)  sellers can prevent people who have not paid for the good from using it.
C)  consumers have a perception that the good is scarce.
D)  the government enacts specific import policies limiting the good's supply.E) All of the above
F) B) and C)

Question 10

Free riders receive _______ externalities from _______.

Accepted Answer

A)  negative; others' choices to pay for a good
B)  positive; others' choices to pay for a good
C)  positive; consumers who receive subsidies
D)  positive; goods they choose to buyE) C) and D)
F) A) and C)

Question 11

Private goods are:

Accepted Answer

A)  excludable, but not rival in consumption.
B)  rival in consumption and excludable.
C)  rival in consumption, but not excludable.
D)  neither rival in consumption nor excludable.E) B) and C)
F) A) and D)

Question 12

A road would be considered a common resource if it is:

Accepted Answer

A)  used infrequently and charges no tolls.
B)  highly trafficked and congested, and charges tolls.
C)  used infrequently and charges tolls.
D)  highly trafficked and congested, and charges no tolls.E) All of the above
F) B) and C)

Question 13

When the optimal quantity of consumption is zero for a given good, _______ is often the best solution.

Accepted Answer

A)  a ban
B)  changing social norms
C)  privatizing the good
D)  government provision of the goodE) C) and D)
F) None of the above

Question 14

Markets work well for allocating _______ efficiently, but not always so well for allocating _______.

Accepted Answer

A)  private goods; public goods
B)  public goods; private goods
C)  common resources; public goods
D)  public goods; common resourcesE) All of the above
F) A) and B)

Question 15

Which of the following is a modern example of privatizing a common resource?

Accepted Answer

A)  Patents
B)  Quotas
C)  Taxes
D)  SubsidiesE) B) and C)
F) None of the above

Question 16

Which type of good is excludable, but not rival in consumption?

Accepted Answer

A)  Common resource
B)  Private
C)  Public
D)  Artificially scarceE) A) and C)
F) A) and B)

Question 17

Fireworks 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 D)

Question 18

In a market where the tragedy of the commons arises, the equilibrium quantity is both individually _______ and collectively _______.

Accepted Answer

A)  inefficient; rational
B)  rational; inefficient
C)  irrational; efficient
D)  efficient; irrationalE) B) and D)
F) None of the above

Question 19

Which of the following is a "design principle" that makes informal, community-based solutions to common-resource problems more effective?

Accepted Answer

A)  Clear, government-enforced rules for use
B)  Individual pledges to self-monitor their actions
C)  Clear distinctions between who is and is not allowed to access the resource
D)  All of these are principles that improve the effectiveness of community-based solutions.E) A) and B)
F) B) and C)

Question 20

Which of the following statements is true about government bans as a solution to the tragedy of the commons?

Accepted Answer

A)  They are always the most efficient solution.
B)  They can be ineffective if enforcement is too difficult.
C)  They can increase surplus more than any other solution.
D)  They are the easiest and most effective solution.E) A) and D)
F) None of the above

Exam 19: Public Goods and Common Resources

Which of the following public goods would be the easiest for the government to make excludable?

Correct AnswerverifiedShow Answer

A government will use its power to make up for the inadequate supply of a good to:

Correct AnswerverifiedB

Local governments, rather than private citizens, are typically the providers of large fireworks displays. This is because fireworks displays: suffer from the free rider problem. are non-excludable. are rival in consumption.

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

Which of the following is an excludable good or service?

Correct AnswerverifiedA

The combination of inefficiently high demand and dwindling quantity leads to what is called:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following goods is most likely to be overconsumed?

Correct AnswerverifiedShow Answer

When a good is rival in consumption:

Correct AnswerverifiedShow Answer

Free riders receive _______ externalities from _______.

Correct AnswerverifiedShow Answer

Private goods are:

Correct AnswerverifiedShow Answer

A road would be considered a common resource if it is:

Correct AnswerverifiedShow Answer

When the optimal quantity of consumption is zero for a given good, _______ is often the best solution.

Correct AnswerverifiedShow Answer

Markets work well for allocating _______ efficiently, but not always so well for allocating _______.

Correct AnswerverifiedShow Answer

Which of the following is a modern example of privatizing a common resource?

Correct AnswerverifiedShow Answer

Which type of good is excludable, but not rival in consumption?

Correct AnswerverifiedShow Answer

Fireworks would be considered:

Correct AnswerverifiedShow Answer

In a market where the tragedy of the commons arises, the equilibrium quantity is both individually _______ and collectively _______.

Correct AnswerverifiedShow Answer

Which of the following is a "design principle" that makes informal, community-based solutions to common-resource problems more effective?

Correct AnswerverifiedShow Answer

Which of the following statements is true about government bans as a solution to the tragedy of the commons?

Correct AnswerverifiedShow Answer

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B

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B

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A

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Free riders receive _ externalities from _.

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Markets work well for allocating _ efficiently, but not always so well for allocating _.

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In a market where the tragedy of the commons arises, the equilibrium quantity is both individually _ and collectively _.

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