Question 1

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Accepted Answer

A)  are forced to pursue any project in which a single human life is saved.
B)  are likely to make decisions that optimally allocate society's scarce resources.
C)  would not pursue any public project that would not save human life.
D)  would be forced to rely on private markets to provide public goods.E) A) and D)
F) B) and C)

Question 2

The U.S.patent system

Accepted Answer

A)  makes general knowledge excludable.
B)  makes specific, technical knowledge excludable.
C)  creates a disincentive to invent.
D)  Both a and b are correct.E) All of the above
F) B) and C)

Question 3

Studies that compare the wages of more risky and less risky occupations estimate the value of a human life to be about

Accepted Answer

A)  $1 million.
B)  $5 million.
C)  $10 million.
D)  $20 million.E) A) and B)
F) All of the above

Question 4

Which of the following statements is not correct?

Accepted Answer

A)  A free rider is a person who benefits from something for which he or she does not have to pay.
B)  The creation of knowledge is a public good.
C)  The Tragedy of the Commons illustrates the underuse of a common resource.
D)  A gasoline tax is an imperfect solution to the problem of traffic congestion on public roads.E) B) and D)
F) All of the above

Question 5

In 2004,per person expenditures on national defense in the U.S.amounted to about

Accepted Answer

A)  $800.
B)  $1,200.
C)  $1,500.
D)  $2,000.E) A) and D)
F) A) and C)

Question 6

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Accepted Answer

A) True 
 B)False

Question 7

Respondents to cost-benefit surveys

Accepted Answer

A)  are unable to evaluate the effect of the project on their personal satisfaction.
B)  typically do not receive a direct benefit from government projects.
C)  have a difficult time identifying explicit costs.
D)  have little incentive to tell the truth.E) A) and C)
F) A) and B)

Question 8

Very few entrepreneurs operate their own nature parks in the U.S.because

Accepted Answer

A)  urban sprawl is encroaching on rural areas.
B)  government-sponsored national parks set entrance fees below costs.
C)  restrictive laws prohibit private citizens from owning parks.
D)  private citizens demand fewer parks each year.E) B) and C)
F) None of the above

Question 9

Governments can grant private property rights over resources that were previously viewed as public,such as fish or elephants.Why would governments want to do so?

Accepted Answer

A)  to prevent overuse
B)  to decrease taxes
C)  to fight poverty
D)  to increase consumptionE) A) and D)
F) B) and D)

Question 10

Cost-benefit analysis is important to determine the role of government in our economy because

Accepted Answer

A)  the government should provide all goods for which the benefits exceed the costs.
B)  cost-benefit analysis identifies the possible gains to society from government provision of a particular good.
C)  markets for private goods cannot effectively assign costs and benefits.
D)  cost-benefit analysis is the best tool to identify market failures.E) A) and B)
F) A) and C)

Question 11

Which of the following is a disadvantage of government provision of a public good such as national defense? (i) 	The government does not know the exact willingness of consumers to pay for the public good.
(ii) 	The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good.
(iii) 	Taxpayers do not agree on the optimal quantity of the public good that the government should provide.

Accepted Answer

A)  (i)  only
B)  (i)  and (ii)  only
C)  (i)  and (iii)  only
D)  (i) , (ii) , and (iii) E) B) and D)
F) A) and B)

Question 12

The local fire department wants to buy some new equipment at a cost of $1 million.If a human life is worth $10 million,the equipment is worth buying if it reduces the risk of someone dying in a fire over the life of the equipment by at least

Accepted Answer

A)  1 percentage point.
B)  5 percentage points.
C)  7 percentage points.
D)  10 percentage points.E) A) and D)
F) None of the above

Question 13

Each of the following would be considered a common resource except

Accepted Answer

A)  clean air.
B)  congested nontoll roads.
C)  national defense.
D)  open grazing land.E) B) and C)
F) A) and B)

Question 14

When one person uses a common resource,such as fish in the ocean,which of the following would not be correct?

Accepted Answer

A)  Other people are likely to be worse off.
B)  Other people will not be compensated for their loss.
C)  The person does not account for external effects.
D)  There will still be enough left for other people, since one person cannot make a major impact.E) B) and D)
F) All of the above

Question 15

Which of the following is an approach used by economists to calculate the value of a human life?

Accepted Answer

A)  comparing the salaries of people who live in cities with more traffic lights to those who live in cities with fewer traffic lights
B)  comparing the wages of more risky occupations to less risky occupations
C)  comparing the costs of vehicles with safety features such as side-impact airbags to those without such safety features
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 16

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)  no more than one person can use the good at the same time.
D)  everyone will be excluded from obtaining the good.E) All of the above
F) C) and D)

Question 17

Suppose that Martin owns a lighthouse,and Lewis owns a nearby port.Martin's lighthouse benefits only those ships that enter Lewis's port.Which of the following statements is not correct?

Accepted Answer

A)  Martin's lighthouse may be considered a private good.
B)  Martin can reduce the free-rider problem by charging Lewis a usage fee.
C)  Martin can exclude Lewis's port from benefiting from the lighthouse by simply turning the power off.
D)  Martin's lighthouse would be considered a common resource.E) None of the above
F) B) and C)

Question 18

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

Accepted Answer

A) True 
 B)False

Question 19

It is common knowledge that many U.S.national parks have become overused.One possible solution to this problem is to

Accepted Answer

A)  increase entrance fees.
B)  conduct a study to determine the daily attendance capacity of the individual parks.
C)  reduce the national park service budget.
D)  All of the above are possible solutions.E) A) and D)
F) C) and D)

Question 20

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

Exam 11: Public Goods and Common Resources

When a good is rival in consumption,

Correct Answer
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Each of the following would be considered a common resource except

Correct Answer
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Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Correct Answer
verified

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Correct Answer
verified

When one person uses a common resource,such as fish in the ocean,which of the following would not be correct?

Correct Answer
verified

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

Correct Answer
verified

The U.S.patent system

Correct Answer
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Respondents to cost-benefit surveys

Correct Answer
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Correct Answer
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The local fire department wants to buy some new equipment at a cost of $1 million.If a human life is worth $10 million,the equipment is worth buying if it reduces the risk of someone dying in a fire over the life of the equipment by at least

Correct Answer
verified

It is common knowledge that many U.S.national parks have become overused.One possible solution to this problem is to

Correct Answer
verified

Cost-benefit analysis is important to determine the role of government in our economy because

Correct Answer
verified

Governments can grant private property rights over resources that were previously viewed as public,such as fish or elephants.Why would governments want to do so?

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Very few entrepreneurs operate their own nature parks in the U.S.because

Correct Answer
verified

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

Correct Answer
verified

Suppose that Martin owns a lighthouse,and Lewis owns a nearby port.Martin's lighthouse benefits only those ships that enter Lewis's port.Which of the following statements is not correct?

Correct Answer
verified

In 2004,per person expenditures on national defense in the U.S.amounted to about

Correct Answer
verified

Which of the following is an approach used by economists to calculate the value of a human life?

Correct Answer
verified

Studies that compare the wages of more risky and less risky occupations estimate the value of a human life to be about

Correct Answer
verified

Exam 11: Public Goods and Common Resources

When a good is rival in consumption,

Correct AnswerverifiedShow Answer

Each of the following would be considered a common resource except

Correct AnswerverifiedShow Answer

Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

Correct AnswerverifiedShow Answer

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Correct AnswerverifiedShow Answer

When one person uses a common resource,such as fish in the ocean,which of the following would not be correct?

Correct AnswerverifiedShow Answer

One person's use of common resources does not reduce the enjoyment other people receive from the resource.

Correct AnswerverifiedShow Answer

The U.S.patent system

Correct AnswerverifiedShow Answer

Respondents to cost-benefit surveys

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The local fire department wants to buy some new equipment at a cost of $1 million.If a human life is worth $10 million,the equipment is worth buying if it reduces the risk of someone dying in a fire over the life of the equipment by at least

Correct AnswerverifiedShow Answer

It is common knowledge that many U.S.national parks have become overused.One possible solution to this problem is to

Correct AnswerverifiedShow Answer

Cost-benefit analysis is important to determine the role of government in our economy because

Correct AnswerverifiedShow Answer

Governments can grant private property rights over resources that were previously viewed as public,such as fish or elephants.Why would governments want to do so?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Very few entrepreneurs operate their own nature parks in the U.S.because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose that Martin owns a lighthouse,and Lewis owns a nearby port.Martin's lighthouse benefits only those ships that enter Lewis's port.Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

In 2004,per person expenditures on national defense in the U.S.amounted to about

Correct AnswerverifiedShow Answer

Which of the following is an approach used by economists to calculate the value of a human life?

Correct AnswerverifiedShow Answer

Studies that compare the wages of more risky and less risky occupations estimate the value of a human life to be about

Correct AnswerverifiedShow Answer

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