Question 1

The degradation of the environment from litter is a

Accepted Answer

A)   a negative externality.
B)   free rider problem.
C)   Tragedy of the Commons.
D)   both a and cE) B) and D)
F) A) and C) D

Question 2

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)   decrease camping permit fees.
C)   require all visitors to register upon entering the park.
D)   sell the land that the parks currently occupy.E) A) and D)
F) C) and D)

Question 3

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial,legal,and entertainment district?

Accepted Answer

A)   Washington,D.C.
B)   Sydney
C)   Tokyo
D)   LondonE) C) and D)
F) None of the above

Question 4

Tom is a non-union employee at General Power.The majority of the employees at General Power are unionized.The union at General Power has negotiated very good benefits.Even though he is not a union member and he does not have to pay union dues,Tom receives all the benefits that the union has negotiated.Tom'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 C)
F) All of the above

Question 5

A congested side street in your neighborhood is

Accepted Answer

A)   excludable and rival in consumption.
B)   excludable and not rival in consumption.
C)   not excludable and rival in consumption.
D)   not excludable and not rival in consumption.E) None of the above
F) A) and D)

Question 6

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Accepted Answer

A)   those who stand to gain have an incentive to tell the truth.
B)   those who stand to lose have an incentive to exaggerate their true costs.
C)   answers to the survey questions will always be downwardly biased.
D)   not everyone asked will be using the highway.E) A) and B)
F) B) and C)

Question 7

Some goods can be either common resources or public goods depending on

Accepted Answer

A)   whether the good is rival in consumption.
B)   whether the good is excludable.
C)   the marginal cost of the good.
D)   None of the above is correct.E) B) and C)
F) C) and D)

Question 8

Which of the following is an example of the free-rider problem?

Accepted Answer

A)   Both Fred and Wilma receive low-cost dental care at the local dental school,so neither of them pays the full cost of the care.
B)   Elmer receives a free lunch from the local "Meals on Wheels" program because of his low monthly income.Yet his next door neighbor,Dorothy,is not eligible for the free lunch.
C)   Max owns Fido,a large dog who barks whenever anyone walks near his house.Sally lives next to Max,and Fido's barking can be heard whenever anyone walks near her house,too.Thus,Sally receives free protection from burglars because of Fido's barking.
D)   David purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one,get one free sale.E) All of the above
F) A) and B)

Question 9

An ice cream cone is

Accepted Answer

A)   excludable and rival in consumption.
B)   excludable and not rival in consumption.
C)   not excludable and rival in consumption.
D)   not excludable and not rival in consumption.E) A) and D)
F) None of the above A

Question 10

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $15,000.If the traffic light reduces the risk of fatality by 0.4 percent,and the value of a human life is estimated to be $10 million,you should

Accepted Answer

A)   install the light because the expected benefit of $40,000 is greater than the cost.
B)   install the light because the expected benefit of $20,000 is greater than the cost.
C)   not install the light because the expected benefit of $15,000 is only equal to the cost.
D)   not install the light because the expected benefit of $4,000 is less than the cost.E) A) and B)
F) None of the above

Question 11

One economically efficient way to eliminate the Tragedy of the Commons is to

Accepted Answer

A)   tax the owners of the resource.
B)   prevent anyone from using the resource.
C)   reduce the marginal social benefit of the resource.
D)   establish private ownership of the resource.E) B) and C)
F) A) and D)

Question 12

Highway engineers have proposed improving a dangerous stretch of highway at a cost of $1.5 million.They expect that it will reduce the risk of someone dying in an accident over the life of the highway from 18.3 percent to 7.8 percent.The project would be worth doing as long as a human life is worth at least

Accepted Answer

A)   $117,000.
B)   $157,500.
C)   $274,500.
D)   $1.5 million.E) B) and C)
F) A) and C)

Question 13

If we can conclude that human life has a finite value,cost-benefit analysis can lead to solutions in which human life is worth less than the cost of a potential project.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

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

Question 15

Table 11-2
Consider a small town with only three families,the Jones family,the Harris family,and the Wong 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 $400 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Wong's like the town to install?

Accepted Answer

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

Question 16

Governments that chose to make endangered elephants private goods have met with more success protecting elephants than governments that chose to make killing elephants illegal.

Accepted Answer

A) True 
 B)False

Question 17

The Tragedy of the Commons occurs because

Accepted Answer

A)   a common resource is rival in consumption.
B)   a common resource is underutilized.
C)   crimes are committed in public places.
D)   common resources are subject to exclusionary rules.E) C) and D)
F) A) and B)

Question 18

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 19

A cheeseburger 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) C) and D)
F) A) and C)

Question 20

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) All of the above
F) None of the above

Exam 11: Public Goods and Common Resources

The degradation of the environment from litter is a

Correct Answer
verified
D

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

Correct Answer
verified

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial,legal,and entertainment district?

Correct Answer
verified

Correct Answer
verified

A congested side street in your neighborhood is

Correct Answer
verified

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Correct Answer
verified

Some goods can be either common resources or public goods depending on

Correct Answer
verified

Which of the following is an example of the free-rider problem?

Correct Answer
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An ice cream cone is

Correct Answer
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A

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $15,000.If the traffic light reduces the risk of fatality by 0.4 percent,and the value of a human life is estimated to be $10 million,you should

Correct Answer
verified

One economically efficient way to eliminate the Tragedy of the Commons is to

Correct Answer
verified

Correct Answer
verified

If we can conclude that human life has a finite value,cost-benefit analysis can lead to solutions in which human life is worth less than the cost of a potential project.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
D

Governments that chose to make endangered elephants private goods have met with more success protecting elephants than governments that chose to make killing elephants illegal.

Correct Answer
verified

The Tragedy of the Commons occurs 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

A cheeseburger is

Correct Answer
verified

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

Correct Answer
verified

Exam 11: Public Goods and Common Resources

The degradation of the environment from litter is a

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial,legal,and entertainment district?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A congested side street in your neighborhood is

Correct AnswerverifiedShow Answer

Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because

Correct AnswerverifiedShow Answer

Some goods can be either common resources or public goods depending on

Correct AnswerverifiedShow Answer

Which of the following is an example of the free-rider problem?

Correct AnswerverifiedShow Answer

An ice cream cone is

Correct AnswerverifiedA

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $15,000.If the traffic light reduces the risk of fatality by 0.4 percent,and the value of a human life is estimated to be $10 million,you should

Correct AnswerverifiedShow Answer

One economically efficient way to eliminate the Tragedy of the Commons is to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If we can conclude that human life has a finite value,cost-benefit analysis can lead to solutions in which human life is worth less than the cost of a potential project.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

Governments that chose to make endangered elephants private goods have met with more success protecting elephants than governments that chose to make killing elephants illegal.

Correct AnswerverifiedShow Answer

The Tragedy of the Commons occurs 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

A cheeseburger is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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D

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A

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D

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