Question 1

Bill owns 3 acres of beautiful wooded land.He has created a short walking trail through the woods.Because the terrain is hilly,the only safe entrance to the trail is at the front of Bill's property.When Bill decides to move to be closer to his grandchildren,he donates the land to the state with the understanding that the land will be used as a state park.Because the trail is short,only about 50 people can comfortably enjoy it.This state park is an example of a good that is

Accepted Answer

A)  both rival in consumption and excludable.
B)  neither rival in consumption nor excludable.
C)  nonrival in consumption and excludable.
D)  rival in consumption and nonexcludable.E) B) and D)
F) A) and B)

Question 2

The government often intervenes when private markets fail to provide an optimal level of certain goods and services.For example,the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another.Why might the private market not reach the socially optimal level of traffic without the help of government?

Accepted Answer

It is possible that everyone can agree t...

Question 3

Too few resources are devoted to the creation of knowledge because profit-seeking firms

Accepted Answer

A)  undervalue knowledge in their pursuit of revenues.
B)  overuse their patents.
C)  tend to free-ride on the knowledge that others have developed.
D)  tend to rely on existing employee knowledge.E) A) and B)
F) A) and C)

Question 4

Which of the following would be considered a private good?

Accepted Answer

A)  national defense
B)  a public beach
C)  local cable television service
D)  a bottle of natural mineral waterE) A) and B)
F) A) and C)

Question 5

Which of the following goods is not rival in consumption and not excludable?

Accepted Answer

A)  a hiking trail
B)  a street light
C)  a bicycle
D)  a boatE) B) and C)
F) All of the above

Question 6

When goods are not excludable

Accepted Answer

A)  the goods will be produced as private goods but not as public goods.
B)  the goods will not be produced since no one values them.
C)  the free-rider problem prevents the private market from supplying them.
D)  the private market will produce the goods but will charge less for them than if they are produced as public goods.E) B) and C)
F) C) and D)

Question 7

Many species of animals are common resources,and many must be protected by law to keep them from extinction.Why is the cow not one of these endangered species even though there is such a high demand for beef?

Accepted Answer

A)  Cows reproduce at a high rate and have adapted well to their environment.
B)  Public policies protect cows from predators and diseases.
C)  Cows are privately owned, whereas many endangered species are owned by no one.
D)  There is a natural ecological balance between the birth rate of cows and human consumption.E) A) and B)
F) A) and C)

Question 8

The free-rider problem

Accepted Answer

A)  forces the supply of a public good to exceed its demand.
B)  allows more people to pay for the public good than if it were a private good.
C)  explains why many local governments supply public goods.
D)  is reflected in the above-market price of a public good in comparison to a private good.E) A) and B)
F) A) and D)

Question 9

Goods that are rival in consumption include both

Accepted Answer

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

Question 10

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

Accepted Answer

Eliminating poverty is not a good that t...

Question 11

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

Question 12

Highway engineers have proposed improving a dangerous stretch of highway at a cost of $2 million.They expect that it will reduce the risk of someone dying in an accident over the life of the highway from 22.1 percent to 5.7 percent.The project would be worth doing as long as a human life is worth at least

Accepted Answer

A)  $114,000.
B)  $328,000.
C)  $442,000.
D)  $10 million.E) B) and D)
F) All of the above

Question 13

Which of the following is not an advantage of road tolls as a way to reduce traffic?

Accepted Answer

A)  They charge people based on consumption.
B)  They can help bring usage closer to its optimal level.
C)  Rates can differ according to the time of day.
D)  The administrative costs of collecting the tolls are almost zero, especially for local roads.E) B) and C)
F) A) and B)

Question 14

The U.S.government protects fish,a common resource,by

Accepted Answer

A)  subsidizing the fishing industry.
B)  heavily taxing competing industries.
C)  selling fishing licenses and regulating fish lengths.
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 15

Which of the following goods is rival and excludable?

Accepted Answer

A)  an uncongested toll road
B)  an uncongested nontoll road
C)  a congested nontoll road
D)  a congested toll roadE) B) and D)
F) All of the above

Question 16

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  a tornado siren
B)  an uncongested toll road
C)  a home
D)  the environmentE) C) and D)
F) All of the above

Question 18

Roads can be considered either public goods or common resources,depending on how congested they are.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not considered a public good?

Accepted Answer

A)  national defense
B)  basic research
C)  fire protection
D)  fighting povertyE) All of the above
F) A) and D)

Question 20

A free rider is a person who

Accepted Answer

A)  will only purchase a product on sale.
B)  receives the benefit of a good but avoids paying for it.
C)  can produce a good at no cost.
D)  takes advantage of tax loop-holes to lower his taxes.E) None of the above
F) All of the above

Exam 11: Public Goods and Common Resources

Correct Answer
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Which of the following goods is not rival in consumption and not excludable?

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Which of the following would be considered a private good?

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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

Which of the following is not an advantage of road tolls as a way to reduce traffic?

Correct Answer
verified

Which of the following is not considered a public good?

Correct Answer
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Correct Answer
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It is possible that everyone can agree t...
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A free rider is a person who

Correct Answer
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Correct Answer
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A free-rider is someone who receives the benefit of a good but avoids paying for it.

Correct Answer
verified

Too few resources are devoted to the creation of knowledge because profit-seeking firms

Correct Answer
verified

The free-rider problem

Correct Answer
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When goods are not excludable

Correct Answer
verified

Roads can be considered either public goods or common resources,depending on how congested they are.

Correct Answer
verified

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

Correct Answer
verified

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

Correct Answer
verified
Eliminating poverty is not a good that t...
View Answer

The U.S.government protects fish,a common resource,by

Correct Answer
verified

Many species of animals are common resources,and many must be protected by law to keep them from extinction.Why is the cow not one of these endangered species even though there is such a high demand for beef?

Correct Answer
verified

Which of the following goods is rival and excludable?

Correct Answer
verified

Goods that are rival in consumption include both

Correct Answer
verified

Exam 11: Public Goods and Common Resources

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Which of the following goods is not rival in consumption and not excludable?

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Which of the following would be considered a private good?

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

Which of the following is not an advantage of road tolls as a way to reduce traffic?

Correct AnswerverifiedShow Answer

Which of the following is not considered a public good?

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Correct AnswerverifiedIt is possible that everyone can agree t...View AnswerShow Answer

A free rider is a person who

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A free-rider is someone who receives the benefit of a good but avoids paying for it.

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Too few resources are devoted to the creation of knowledge because profit-seeking firms

Correct AnswerverifiedShow Answer

The free-rider problem

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When goods are not excludable

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Roads can be considered either public goods or common resources,depending on how congested they are.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

Correct AnswerverifiedEliminating poverty is not a good that t...View AnswerShow Answer

The U.S.government protects fish,a common resource,by

Correct AnswerverifiedShow Answer

Many species of animals are common resources,and many must be protected by law to keep them from extinction.Why is the cow not one of these endangered species even though there is such a high demand for beef?

Correct AnswerverifiedShow Answer

Which of the following goods is rival and excludable?

Correct AnswerverifiedShow Answer

Goods that are rival in consumption include both

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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It is possible that everyone can agree t...
View 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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Eliminating poverty is not a good that t...
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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