Question 1

Four roommates share an off-campus house and equally share the cost of rent.Everyone says that she values a clean house,yet the house is usually dirty.To an economist,a clean house in this case represents

Accepted Answer

A)   a common resource problem.
B)   a public good.
C)   a natural monopoly.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 2

Table 11-1
Consider the town of Anywhere with only three residents,Mary,Bill,and Tricia.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 $33 per acre and that the residents have agreed to split the cost of building the park equally.If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park,how much total surplus will Bill receive?

Accepted Answer

A)   -$2
B)   $2
C)   $9
D)   $10E) A) and B)
F) B) and D)

Question 3

Too few resources are devoted to the creation of knowledge because profit-seeking firms

Accepted Answer

A)   undervalue knowledge in their pursuit of revenues.
B)   overuse their patents.
C)   tend to free-ride on the knowledge that others have developed.
D)   tend to rely on existing employee knowledge.E) All of the above
F) A) and B)

Question 4

Phil owns 10 acres of beautiful wooded land.When Phil 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.Phil wants an efficient way to prevent overcrowding at the park,so he should require

Accepted Answer

A)   that no park visitors ever pay an entry fee.
B)   that the park limit the number of visitors to 500 per day,without an entry fee.
C)   an entry fee be charged on summer weekend days when many people tend to visit the park
D)   an entry fee be charged every day of the year,regardless of the number of people who would like to visit the park.E) None of the above
F) B) and C)

Question 5

Which of the following is not a reason why government agencies subsidize basic research?

Accepted Answer

A)   The private market devotes too few resources to basic research.
B)   The general knowledge developed through basic research can be used without charge.
C)   The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies.
D)   The government wants to attract the brightest researchers away from private research firms.E) A) and C)
F) A) and D)

Question 6

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

Accepted Answer

A)   basic research is not a public good.
B)   the benefits of basic research are hard to measure.
C)   members of Congress usually have little expertise in science.
D)   Both b and c are correct.E) A) and B)
F) A) and C)

Question 7

Because elephants roam freely in many countries in Africa,each individual African elephant poacher has

Accepted Answer

A)   a strong incentive to kill as many elephants as he can find.
B)   a strong incentive to protect the elephants.
C)   the ability to save the elephants.
D)   None of the above is correct.E) B) and D)
F) None of the above

Question 8

At the local park there is a playground that anyone may use.There is rarely anyone using the playground,so children who use the playground receive full enjoyment from its use.The playground is

Accepted Answer

A)   rival in consumption and is excludable.
B)   not rival in consumption,but is excludable.
C)   rival in consumption,but is not excludable.
D)   not rival in consumption nor is it excludable.E) A) and C)
F) C) and D)

Question 9

Table 11-3
This table describes the defense demands for three equal sized groups of people in Nirvanaville.The second,third,and fourth column shows the quantity that a group will demand for a given price (the first column) .
 rd unit of national defense in Nirvanaville? A)  $0 B)  $2 C)  $4 D)  $6" class="answers-bank-image d-inline" rel="preload" >
-Refer to Table 11-3.What is the value of the 33rd unit of national defense in Nirvanaville?

Accepted Answer

A)   $0
B)   $2
C)   $4
D)   $6E) A) and D)
F) A) and B)

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

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Accepted Answer

A) True 
 B)False

Question 12

Because the benefits of basic research are obvious and easy to measure,it is likely that the public sector pays for the right amount and the right kinds of basic research.

Accepted Answer

A) True 
 B)False

Question 13

Advocates of antipoverty programs claim that fighting poverty

Accepted Answer

A)   is best accomplished by charities.
B)   is a public good.
C)   is more efficiently accomplished by the market.
D)   should not be attempted with tax dollars.E) B) and C)
F) B) and D)

Question 14

Antonio,Vanessa,and Norah 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.Antonio values the garden at $25,Vanessa at $15,and Norah at $30.The flowers and labor for the garden cost $55.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) B) and D)
F) A) and D)

Question 15

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 C)
F) None of the above

Question 16

Which of the following statements is not correct?

Accepted Answer

A)   Environmental degradation is an example of the Tragedy of the Commons.
B)   Cost-benefit analysis is an important tool that economists use to evaluate the benefits of providing a public good.
C)   Some goods,such as lighthouses,may be either private or public goods.
D)   The free-rider problem prevents governments from supplying public goods.E) B) and C)
F) None of the above

Question 17

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 private goods.
C)   cows are a common resource,while elephants are private goods.
D)   it is legal to kill cows but not elephants.E) B) and D)
F) A) and B)

Question 18

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

Accepted Answer

A) True 
 B)False

Question 19

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

Question 20

Table 11-4
There are four homes along Belmont Circle,which surrounds a small plot of land.The land currently has no trees,and the 4 homeowners -- Adams,Benitez,Chen,and Davis -- are considering the idea of contributing to a pool of money that will be used to plant up to 4 trees.The table represents their willingness to pay,that is,the maximum amount that each homeowner is willing to contribute toward each tree.
 
-Refer to Table 11-4.Suppose the cost to plant each tree is $220 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s) would be in favor of planting at least 3 trees?

Accepted Answer

A)   only Benitez
B)   only Benitez and Chen
C)   only Benitez,Chen,and Davis
D)   Adams,Benitez,Chen,and DavisE) A) and B)
F) A) and C)

Exam 11: Public Goods and Common Resources

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

Correct Answer
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Correct Answer
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Correct Answer
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Elephants are endangered,but cows are not because

Correct Answer
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Phil owns 10 acres of beautiful wooded land.When Phil 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.Phil wants an efficient way to prevent overcrowding at the park,so he should require

Correct Answer
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At the local park there is a playground that anyone may use.There is rarely anyone using the playground,so children who use the playground receive full enjoyment from its use.The playground is

Correct Answer
verified

Elephant populations in some African countries have started to rise because

Correct Answer
verified

Because the benefits of basic research are obvious and easy to measure,it is likely that the public sector pays for the right amount and the right kinds of basic research.

Correct Answer
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Because elephants roam freely in many countries in Africa,each individual African elephant poacher has

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

Correct Answer
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Which of the following is not a reason why government agencies subsidize basic research?

Correct Answer
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Correct Answer
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Four roommates share an off-campus house and equally share the cost of rent.Everyone says that she values a clean house,yet the house is usually dirty.To an economist,a clean house in this case represents

Correct Answer
verified

Advocates of antipoverty programs claim that fighting poverty

Correct Answer
verified

Too few resources are devoted to the creation of knowledge because profit-seeking firms

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

Goods that are rival in consumption include both

Correct Answer
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Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Correct Answer
verified

Exam 11: Public Goods and Common Resources

It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Elephants are endangered,but cows are not because

Correct AnswerverifiedShow Answer

Phil owns 10 acres of beautiful wooded land.When Phil 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.Phil wants an efficient way to prevent overcrowding at the park,so he should require

Correct AnswerverifiedShow Answer

At the local park there is a playground that anyone may use.There is rarely anyone using the playground,so children who use the playground receive full enjoyment from its use.The playground is

Correct AnswerverifiedShow Answer

Elephant populations in some African countries have started to rise because

Correct AnswerverifiedShow Answer

Because the benefits of basic research are obvious and easy to measure,it is likely that the public sector pays for the right amount and the right kinds of basic research.

Correct AnswerverifiedShow Answer

Because elephants roam freely in many countries in Africa,each individual African elephant poacher has

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

When goods are available free of charge,the market forces that normally allocate resources in our economy are absent.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a reason why government agencies subsidize basic research?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Four roommates share an off-campus house and equally share the cost of rent.Everyone says that she values a clean house,yet the house is usually dirty.To an economist,a clean house in this case represents

Correct AnswerverifiedShow Answer

Advocates of antipoverty programs claim that fighting poverty

Correct AnswerverifiedShow Answer

Too few resources are devoted to the creation of knowledge because profit-seeking firms

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

Goods that are rival in consumption include both

Correct AnswerverifiedShow Answer

Common resources and public goods have in common that they are not excludable and they are not rival in consumption.

Correct AnswerverifiedShow Answer

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