Question 1

Pete is a non-union employee at The Electric Co. The majority of the employees at The Electric Co. are unionized. The union at The Electric Co. has negotiated very good benefits. Even though he is not a union member and he does not have to pay union dues, Pete receives all the benefits that the union has negotiated. Pete's behavior is an example of

Accepted Answer

A)   rivalry.
B)   a barrier to entry.
C)   free riding.
D)   Taft-Hartley opposition.E) B) and D)
F) None of the above

Question 2

Table 11-2
Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. 
-Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Greene's like the town to install?

Accepted Answer

A)   0 streetlights
B)   1 streetlight
C)   2 streetlights
D)   3 streetlightsE) B) and C)
F) B) and D)

Question 3

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

Question 4

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Accepted Answer

A)   basic research.
B)   a congested toll road.
C)   spinach.
D)   clothing.E) B) and D)
F) A) and D)

Question 5

The idea of requiring motorists to pay to use the busiest streets in a city

Accepted Answer

A)   has been proposed by many public officials, but to date the idea never has been tried in a major city anywhere in the world.
B)   was tried in New York City in the 1990s, but the result was more - not less - congestion on busy streets, and the experiment was short-lived.
C)   reflects the fact that a congested road is a public good.
D)   reflects the fact that a congested road is a common resource.E) All of the above
F) B) and D)

Question 6

It would always be a mistake to view

Accepted Answer

A)   a streetlight as a common resource.
B)   a nontoll road as a public good.
C)   the environment as a common resource.
D)   a lighthouse as a public good.E) None of the above
F) A) and B)

Question 7

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

Accepted Answer

A)   Grand Canyon National Park on a rainy, cool day
B)   Disney World on a rainy, cool day
C)   a crowded public beach on a sunny, warm day
D)   White Mountain ski resort on a sunny, mild dayE) A) and C)
F) A) and D)

Question 8

In what sense is it meaningful to say that fighting poverty is a public good?

Accepted Answer

The argument that fighting poverty is a ...

Question 9

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Accepted Answer

A)   Elephants live in Africa, whereas cows live in the United States.
B)   Elephants are a common resource.
C)   Cows are a common resource.
D)   Cows are a public good.E) A) and B)
F) A) and C)

Question 10

Goods that are rival in consumption include both

Accepted Answer

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

Question 11

A pizza is

Accepted Answer

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

Question 12

When a good is rival in consumption,

Accepted Answer

A)   one person's use of the good diminishes another person's ability to use it.
B)   people can be prevented from using the good.
C)   an unlimited number of people can use the good at the same time.
D)   everyone will be excluded from obtaining the good.E) None of the above
F) A) and D)

Question 13

The Great Lakes are

Accepted Answer

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

Question 14

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

Accepted Answer

A)   The benefits are usually easier to measure than the costs.
B)   Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs.
C)   Estimating the value of a human life is difficult but necessary to evaluate the proposal.
D)   Both a and b are correct.E) None of the above
F) B) and C)

Question 15

Which two types of goods are excludable?

Accepted Answer

Private go...

Question 16

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

Accepted Answer

A)   Without prices, it is difficult to be sure how much people really value a good.
B)   Analysts can't be sure that the respondents to surveys are telling the truth.
C)   Analysis must include not only the cost of building the project but also the cost of maintenance, if any.
D)   People value goods differently if they are publicly provided rather than privately provided.E) A) and C)
F) C) and D)

Question 17

Figure 11-1
Rival in Consumption?
Yes No
Excludable? Yes   No
-Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Accepted Answer

Clean air is a commo...

Question 18

Because of the free-rider problem,

Accepted Answer

A)   private markets tend to undersupply public goods.
B)   the federal government spends too many resources on national defense and not enough resources on medical research.
C)   fireworks displays have become increasingly dangerous.
D)   poverty has increased.E) A) and B)
F) All of the above

Question 19

The Tragedy of the Commons occurs because

Accepted Answer

A)   common resources are rival in consumption.
B)   government does not efficiently allocate society's scarce resources.
C)   people consider the value of resources in the future more than in the present.
D)   markets do not account for the presence of property rights.E) A) and B)
F) B) and C)

Question 20

Some goods can be classified as either public goods or private goods depending on the circumstances.

Accepted Answer

A) True 
 B)False

Exam 11: Public Goods and Common Resources

Correct Answer
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Because of the free-rider problem,

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Which two types of goods are excludable?

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Private go...
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The Tragedy of the Commons occurs because

Correct Answer
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Which of the following goods is nonrival in consumption and excludable?

Correct Answer
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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

The idea of requiring motorists to pay to use the busiest streets in a city

Correct Answer
verified

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Correct Answer
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Clean air is a commo...
View Answer

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Correct Answer
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When a good is rival in consumption,

Correct Answer
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Correct Answer
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Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

Correct Answer
verified

A pizza is

Correct Answer
verified

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

Correct Answer
verified

Some goods can be classified as either public goods or private goods depending on the circumstances.

Correct Answer
verified

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Correct Answer
verified

In what sense is it meaningful to say that fighting poverty is a public good?

Correct Answer
verified
The argument that fighting poverty is a ...
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It would always be a mistake to view

Correct Answer
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The Great Lakes are

Correct Answer
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Goods that are rival in consumption include both

Correct Answer
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Exam 11: Public Goods and Common Resources

Correct AnswerverifiedShow Answer

Because of the free-rider problem,

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Which two types of goods are excludable?

Correct AnswerverifiedPrivate go...View AnswerShow Answer

The Tragedy of the Commons occurs because

Correct AnswerverifiedShow Answer

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

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

The idea of requiring motorists to pay to use the busiest streets in a city

Correct AnswerverifiedShow Answer

Figure 11-1 Rival in Consumption? Yes No Excludable? Yes No -Refer to Figure 11-1. In which box - A, B, C, or D - does clean air belong?

Correct AnswerverifiedClean air is a commo...View AnswerShow Answer

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Correct AnswerverifiedShow Answer

When a good is rival in consumption,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A pizza is

Correct AnswerverifiedShow Answer

Which of the following is not a reason that the findings of cost-benefit analyses on public goods are only rough approximations?

Correct AnswerverifiedShow Answer

Some goods can be classified as either public goods or private goods depending on the circumstances.

Correct AnswerverifiedShow Answer

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is

Correct AnswerverifiedShow Answer

In what sense is it meaningful to say that fighting poverty is a public good?

Correct AnswerverifiedThe argument that fighting poverty is a ...View AnswerShow Answer

It would always be a mistake to view

Correct AnswerverifiedShow Answer

The Great Lakes are

Correct AnswerverifiedShow Answer

Goods that are rival in consumption include both

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Private go...
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Correct Answer
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Clean air is a commo...
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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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The argument that fighting poverty is a ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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