Question 1

One benefit to the patent system is that it encourages the production of technical knowledge.

Accepted Answer

A) True 
 B)False

Question 2

Police protection in a small town with a large police force is

Accepted Answer

A)  not rival in consumption and excludable.
B)  rival in consumption and excludable.
C)  not rival in consumption and not excludable.
D)  rival in consumption and not excludable.E) C) and D)
F) B) and C)

Question 3

Raising the entrance fee at Yellowstone National Park would not

Accepted Answer

A)  potentially increase park revenues.
B)  potentially decrease the number of visitors.
C)  allow market forces to correct for the externality.
D)  make the national park a private good.E) None of the above
F) C) and D)

Question 4

Which of the following is an example of the Tragedy of the Commons?

Accepted Answer

A)  The number of professional football teams increases to the point where the quality of the games decreases, as does television viewership.
B)  The number of satellites increases to the point where they begin running into each other.
C)  Disney World becomes so crowded that it institutes a lottery for admissions.
D)  A tiger breeding program becomes so successful that local zoos have to build additional exhibits so that visitors can view the cats.E) A) and B)
F) None of the above

Question 5

Fire protection is a good example of a natural monopoly because

Accepted Answer

A)  it is nonexcludable
B)  it is rival in consumption.
C)  protecting one house is unlikely to reduce the protection available to others.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 6

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) All of the above

Question 7

Four friends decide to meet at a Chinese restaurant for dinner.They decide that each person will order an item off the menu,and they will share all dishes.They will split the cost of the final bill evenly among each of the people at the table.When the food is delivered to the table,each person faces incentives similar to the

Accepted Answer

A)  consumption of a common resource good.
B)  production of a public good.
C)  consumption of a natural monopoly good.
D)  production of a private good.E) A) and B)
F) B) and D)

Question 8

Elephant populations in some African countries have started to rise because

Accepted Answer

A)  poachers and environmentalists are working together to save the elephants.
B)  new laws make killing elephants and selling their ivory illegal.
C)  some elephants have been made a private good, and people are allowed to kill elephants on their own property.
D)  high ivory taxes make it hard to earn a decent return on elephant tusks.E) A) and B)
F) A) and C)

Question 9

A good is excludable if

Accepted Answer

A)  one person's use of the good diminishes another person's enjoyment of it.
B)  the government can regulate its availability.
C)  it is not a normal good.
D)  people can be prevented from using it.E) A) and B)
F) C) and D)

Question 10

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time-share condominium in Alta,Utah.Suppose that the lift lines at the ski resort become more congested when the ten additional people start to ski.Which of the following statements is not correct?

Accepted Answer

A)  Use of the ski resort by the ten new skiers will yield a negative externality.
B)  The ski resort can reduce the congestion externality by raising lift ticket prices.
C)  An increase in lift ticket prices could be viewed as a corrective tax on the externality of congestion.
D)  Each of the ten friends would have been better off staying at home.E) All of the above
F) B) and C)

Question 11

Elephants are endangered,but cows are not because

Accepted Answer

A)  cows are not as valuable as elephants.
B)  elephants are a common resource, while cows are a private good.
C)  cows are a common resource, while elephants are a private good.
D)  it is legal to kill cows but not elephants.E) None of the above
F) B) and C)

Question 12

National defense is provided by the government because

Accepted Answer

A)  it is impossible for private markets to produce public goods.
B)  products provided by the government are produced more efficiently.
C)  free-riders make it difficult for private markets to supply the socially optimal quantity.
D)  public goods increase government revenues.E) B) and D)
F) All of the above

Question 13

Tolls are not effective in altering people's incentives to drive during rush hour.

Accepted Answer

A) True 
 B)False

Question 14

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Accepted Answer

The government assigns and protects the ...

Question 15

Four friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time-share condominium in Alta,Utah.Unfortunately,the condominium does not come with maid service.Everyone says that she values clean dishes,yet unwashed dishes pile up in the sink.To an economist,clean dishes in the cupboard represent

Accepted Answer

A)  a common resource problem.
B)  a problem similar to cost-benefit analysis for public projects.
C)  the household behavior of the invisible hand.
D)  All of the above are correct.E) A) and B)
F) All of the above

Question 16

Goods that are neither excludable nor rival in consumption would be considered

Accepted Answer

A)  natural monopolies.
B)  common resources.
C)  public goods.
D)  private goods.E) None of the above
F) C) and D)

Question 17

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

Accepted Answer

A)  an uncongested toll road
B)  an uncongested nontoll road
C)  a congested nontoll road
D)  a congested toll roadE) A) and B)
F) A) and C)

Question 18

A town engineer comes to the city council with a proposal to install a traffic light at a certain intersection that currently has a stop sign.The benefit of the traffic light is increased safety because the light will reduce the incidence of fatal traffic accidents by 50 percent per year.Which of the following statements is correct?

Accepted Answer

A)  The city council should vote to install the traffic light because the benefits will outweigh the costs.
B)  The city council should carefully evaluate the benefits of reduced fatalities against only the explicit costs of the light.
C)  The city council should carefully evaluate the benefits of reduced fatalities against the costs of the light and of the extra time that drivers will spend waiting for a green light.
D)  The costs will invariably outweigh the benefits.E) C) and D)
F) A) and B)

Question 19

Goods that are excludable but not rival in consumption would be considered

Accepted Answer

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

Question 20

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

Accepted Answer

A)  It requires resources to produce.
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) A) and B)
F) A) and C)

Exam 11: Public Goods and Common Resources

A good is excludable if

Correct Answer
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Goods that are neither excludable nor rival in consumption would be considered

Correct Answer
verified

Correct Answer
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Elephants are endangered,but cows are not because

Correct Answer
verified

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
verified

Police protection in a small town with a large police force is

Correct Answer
verified

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

Correct Answer
verified

National defense is provided by the government because

Correct Answer
verified

Correct Answer
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Correct Answer
verified

One benefit to the patent system is that it encourages the production of technical knowledge.

Correct Answer
verified

Goods that are excludable but not rival in consumption would be considered

Correct Answer
verified

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

Correct Answer
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Which of the following is an example of the Tragedy of the Commons?

Correct Answer
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The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Correct Answer
verified
The government assigns and protects the ...
View Answer

Raising the entrance fee at Yellowstone National Park would not

Correct Answer
verified

Correct Answer
verified

Fire protection is a good example of a natural monopoly because

Correct Answer
verified

Elephant populations in some African countries have started to rise because

Correct Answer
verified

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct Answer
verified

Exam 11: Public Goods and Common Resources

A good is excludable if

Correct AnswerverifiedShow Answer

Goods that are neither excludable nor rival in consumption would be considered

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Elephants are endangered,but cows are not because

Correct AnswerverifiedShow 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

Police protection in a small town with a large police force is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

National defense is provided by the government because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One benefit to the patent system is that it encourages the production of technical knowledge.

Correct AnswerverifiedShow Answer

Goods that are excludable but not rival in consumption would be considered

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is an example of the Tragedy of the Commons?

Correct AnswerverifiedShow Answer

The creation of knowledge is a public good.Because knowledge is a public good,profit-seeking firms tend to free-ride on the knowledge created by others and,as a result,devote too few resources to the creation of knowledge.How does the U.S.government correct for this apparent market failure?

Correct AnswerverifiedThe government assigns and protects the ...View AnswerShow Answer

Raising the entrance fee at Yellowstone National Park would not

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Fire protection is a good example of a natural monopoly because

Correct AnswerverifiedShow Answer

Elephant populations in some African countries have started to rise because

Correct AnswerverifiedShow Answer

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct AnswerverifiedShow Answer

Correct Answer
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The government assigns and protects the ...
View Answer

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Correct Answer
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