Question 1

The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of diet soft drinks is 0.0005.The cost of imposing a regulation that would ban the chemical is $18 million.If the value of a human life is equal to $10 million,how many people must the policy affect in order for the benefits to exceed the costs?

Accepted Answer

A)   301
B)   601
C)   1801
D)   3601E) A) and D)
F) A) and C)

Question 2

Why has the value of ivory threatened the extinction of the elephant,whereas the value of beef has enhanced the survival of the cow?

Accepted Answer

A)   Cows are a common resource,whereas elephants are owned by governments.
B)   Elephants are larger than cows,requiring more economic resources.
C)   Elephants live in Africa,where economic resources are scarce.
D)   Elephants are a common resource,whereas cows are privately owned.E) A) and D)
F) None of the above

Question 3

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Accepted Answer

A) True 
 B)False

Question 4

The Tragedy of the Commons can be corrected by

Accepted Answer

A)   conducting a cost-benefit analysis.
B)   assigning property rights to individuals.
C)   providing government subsidies for the resource.
D)   making certain everyone in the economy has access to the resource.E) B) and C)
F) A) and B)

Question 5

Which of the following statements is not correct?

Accepted Answer

A)   Medical research can be an example of a public good.
B)   The private market will tend to undersupply public goods.
C)   The free-rider problem occurs when a good is nonexcludable.
D)   All goods provided by the government are public goods.E) A) and C)
F) B) and C)

Question 6

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

Question 7

Which of the following is not a public good?

Accepted Answer

A)   national defense
B)   patented technological knowledge
C)   general knowledge
D)   the elimination of povertyE) A) and D)
F) A) and C)

Question 8

A Maine legislator wanted to create a deposit on cigarettes butts.If implemented,people would have the incentive to (1) not toss cigarette butts onto public streets and sidewalks,and (2) pick butts up to redeem them for the cash.The degradation of the environment from littered cigarette butts is a

Accepted Answer

A)   private goods problem.
B)   Nash equilibrium.
C)   Tragedy of the Commons.
D)   cost-benefit equilibrium.E) All of the above
F) A) and B)

Question 9

The national defense of the United States is not rival because

Accepted Answer

A)   my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States.
B)   my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States.
C)   once the nation is defended,it is impossible to prevent any single person from enjoying the benefit of this defense..
D)   once the nation is defended,it is possible to prevent any single person from enjoying the benefit of this defense.E) C) and D)
F) A) and B)

Question 10

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 11

One proposed solution to overused,deteriorating national parks would be to

Accepted Answer

A)   increase the number of bears through breeding programs.
B)   have Congress increase the entrance fees.
C)   decrease management and maintenance of facilities.
D)   reduce the number of improved camping facilities.E) All of the above
F) C) and D)

Question 12

One solution to the "Tragedy of the Commons" is to turn the common resource into a private good.

Accepted Answer

A) True 
 B)False

Question 13

Reggie,Rachael,and Rudy all enjoy looking at flowers blooming in gardens in their neighborhood.The neighborhood association is considering planting a flower garden around the sign at the entrance to the neighborhood.Reggie values the garden at $20,Rachael at $35,and Rudy at $50.The flowers and labor for the garden cost $85.What should the neighborhood association do?

Accepted Answer

A)   Plant the garden because people like flowers.
B)   Plant the garden because the benefits outweigh the costs.
C)   Do not plant the garden because the costs outweigh the benefits.
D)   Do not plant the garden in order to prevent the Tragedy of the Commons problem of overuse.E) A) and C)
F) B) and C)

Question 14

The Whitefish Bay Public Library has a large number of books that anyone with a library card may borrow.Anyone can obtain a card for free.Because the number of copies of each book is limited,not everyone can have the same book at the same time.What type of good would the library books be classified as in this case?

Accepted Answer

A)   Private goods
B)   Natural monopoly
C)   Common resources
D)   Public goodsE) B) and C)
F) C) and D)

Question 15

If Toby and Pete are the only two fishermen in town and neither is bothered by the other's fishing,the lake they fish in is not a common resource.

Accepted Answer

A) True 
 B)False

Question 16

Table 11-1
Consider the town of Tritown with only three residents,Ed,Jim,and Tony.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 $30 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)   0 acres
B)   1 acre
C)   2 acres
D)   3 acresE) B) and C)
F) A) and D)

Question 17

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

Question 18

Bill owns 3 acres of beautiful wooded land.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.This state park is large enough that it is not congested.It 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 C)
F) None of the above

Question 19

Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

Accepted Answer

No one owns the wild salmon,while privat...

Question 20

On holiday weekends thousands of people picnic in state parks.Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero.Suppose that the Wisconsin State Park Service institutes a variable fee structure.On weekdays when the picnic areas get little use,the fee is zero.On normal weekends,the fee is $5 per person.On holiday weekends,the fee is $15 per person.The fee system corrects a problem known as the

Accepted Answer

A)   Coase theorem.
B)   free rider problem.
C)   Tragedy of the Commons.
D)   public goods problem.E) A) and B)
F) All of the above

Exam 11: Public Goods and Common Resources

A Maine legislator wanted to create a deposit on cigarettes butts.If implemented,people would have the incentive to (1) not toss cigarette butts onto public streets and sidewalks,and (2) pick butts up to redeem them for the cash.The degradation of the environment from littered cigarette butts is a

Correct Answer
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Correct Answer
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Correct Answer
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When something of value has no price attached to it,

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

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

Correct Answer
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If Toby and Pete are the only two fishermen in town and neither is bothered by the other's fishing,the lake they fish in is not a common resource.

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Governments can improve market outcomes for

Correct Answer
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Bill owns 3 acres of beautiful wooded land.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.This state park is large enough that it is not congested.It is an example of a good that is

Correct Answer
verified

Correct Answer
verified

Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

Correct Answer
verified
No one owns the wild salmon,while privat...
View Answer

Correct Answer
verified

Correct Answer
verified

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Correct Answer
verified

One solution to the "Tragedy of the Commons" is to turn the common resource into a private good.

Correct Answer
verified

The national defense of the United States is not rival because

Correct Answer
verified

Why has the value of ivory threatened the extinction of the elephant,whereas the value of beef has enhanced the survival of the cow?

Correct Answer
verified

One proposed solution to overused,deteriorating national parks would be to

Correct Answer
verified

The Tragedy of the Commons can be corrected by

Correct Answer
verified

Exam 11: Public Goods and Common Resources

A Maine legislator wanted to create a deposit on cigarettes butts.If implemented,people would have the incentive to (1) not toss cigarette butts onto public streets and sidewalks,and (2) pick butts up to redeem them for the cash.The degradation of the environment from littered cigarette butts is a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When something of value has no price attached to it,

Correct AnswerverifiedShow Answer

Which of the following is not a public good?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If Toby and Pete are the only two fishermen in town and neither is bothered by the other's fishing,the lake they fish in is not a common resource.

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Governments can improve market outcomes for

Correct AnswerverifiedShow Answer

Bill owns 3 acres of beautiful wooded land.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.This state park is large enough that it is not congested.It is an example of a good that is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

Correct AnswerverifiedNo one owns the wild salmon,while privat...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

Correct AnswerverifiedShow Answer

One solution to the "Tragedy of the Commons" is to turn the common resource into a private good.

Correct AnswerverifiedShow Answer

The national defense of the United States is not rival because

Correct AnswerverifiedShow Answer

Why has the value of ivory threatened the extinction of the elephant,whereas the value of beef has enhanced the survival of the cow?

Correct AnswerverifiedShow Answer

One proposed solution to overused,deteriorating national parks would be to

Correct AnswerverifiedShow Answer

The Tragedy of the Commons can be corrected by

Correct AnswerverifiedShow 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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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
verified
No one owns the wild salmon,while privat...
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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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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