Question 1

A good or resource that is both nonrival and nonexcludable is

Accepted Answer

A)  a good that is impossible to produce.
B)  a private good.
C)  a common resource.
D)  a public good.
E)  nonexistent because it is impossible for a good or resource to be both nonrival and nonexcludable.F) A) and E)
G) A) and D)

Question 2

For which type of good is it necessary to sum the marginal benefit curves vertically in order to obtain the economy's marginal benefit curve?

Accepted Answer

A)  public goods
B)  mixed goods
C)  private goods
D)  goods that are subject to the exclusion principle
E)  common resourcesF) C) and D)
G) A) and D)

Question 3

A good that can be consumed even if the consumer does not pay for it

Accepted Answer

A)  is necessarily rival in consumption.
B)  completely avoids the free rider problem.
C)  does not exist because firms won't produce goods for which consumers won't pay.
D)  is nonexcludable.
E)  might be nonexcludable but is definitely nonrival.F) D) and E)
G) A) and C)

Question 4

A public good is

Accepted Answer

A)  rival and excludable.
B)  rival and nonexcludable.
C)  nonrival and excludable.
D)  nonrival and nonexcludable.
E)  a good that has an infinite number of substitutes.F) A) and B)
G) A) and C)

Question 5

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The efficient outcome is ________.

Accepted Answer

A)  0 tons per week
B)  200 tons per week
C)  400 tons per week
D)  500 tons per week
E)  None of the above answers is correct.F) C) and D)
G) B) and E)

Question 6

The marginal benefit curve of a public good

Accepted Answer

A)  slopes downward.
B)  slopes upward.
C)  is vertical.
D)  is horizontal.
E)  is U-shaped.F) C) and E)
G) B) and E)

Question 7

What are the differences between public goods and private goods?

Accepted Answer

Public goods are
∙ nonrival, which means...

Question 8

A private good is defined as a good or service

Accepted Answer

A)  that is something tangible.
B)  that is rival and excludable.
C)  that is rival and nonexcludable.
D)  produced by a single country.
E)  that is nonrival and nonexcludable.F) A) and E)
G) A) and D)

Question 9

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

Accepted Answer

A)  maximum differentiation.
B)  minimum differentiation.
C)  minimum marginal utility.
D)  maximum returns.
E)  agreement.F) A) and E)
G) D) and E)

Question 10

Why isn't national defense provided by free markets?

Accepted Answer

National defense is a public good.This f...

Question 11

The fact that Florida's consumption of national defense does not preclude North Dakota from consuming the same national defense is an example of

Accepted Answer

A)  a private good.
B)  a common resource.
C)  the rival nature of consumption.
D)  excludable goods.
E)  a good that is nonrival in consumption.F) A) and B)
G) C) and D)

Question 12

Suppose a public good is provided in an economy with only two consumers, Popeye and Captain Hook.If Popeye values the public good at $4,000 per year, and Captain Hook values it at $3,000 per year, the economy's marginal benefit of the public good per year is

Accepted Answer

A)  $7,000.
B)  $4,000.
C)  $3,000.
D)  $1,000.
E)  $12,000.F) A) and D)
G) B) and E)

Question 13

A good is a private good if

Accepted Answer

A)  people who do not pay for the good can enjoy it without paying for it.
B)  it is not a common resource.
C)  the good is nonrival.
D)  the good is excludable and rival.
E)  it is both nonexcludable and nonrival.F) A) and D)
G) A) and E)

Question 14

The reason that private provision of a public good often leads to inefficiency is because

Accepted Answer

A)  private property rights are too costly to enforce.
B)  marginal private benefits are too costly to calculate.
C)  no one has the incentive to pay for the good.
D)  no one has an incentive to conserve the good.
E)  the tragedy of the commons occurs and too many public goods are provided.F) A) and B)
G) B) and D)

Question 15

Which of the following is an example of a pure private good?

Accepted Answer

A)  national defense
B)  the Florida State Turnpike, a non-congested toll freeway
C)  Lake Erie
D)  the Metropolitan Museum of Art in New York City
E)  the new heat pump your neighbor bought for her houseF) D) and E)
G) A) and E)

Question 16

Which of the following goods is best described as nonexcludable?

Accepted Answer

A)  flood-control levees
B)  pay-per-view television
C)  a restaurant meal
D)  a college education
E)  a cow grazing in a pastureF) All of the above
G) A) and B)

Question 17

How does the principle of minimum differentiation relate to the free-rider problem?

Accepted Answer

The free-rider problem requires that the...

Question 18

Inefficient overproduction of a public good by the government is

Accepted Answer

A)  the only efficient method of producing public goods.
B)  not likely to occur when voters choose rational ignorance.
C)  the term used to describe a surplus of a public good.
D)  one explanation of why government might be large.
E)  not likely to occur if voters are rationally ignorant.F) A) and D)
G) C) and E)

Question 19

Why are fish in the ocean an example of a resource that suffers from the tragedy of the commons but cattle grazing in a farmer's pasture do not suffer from the tragedy of the commons?

Accepted Answer

Fish in the ocean are a common resource ...

Question 20

When producers are hard to monitor and property rights are too costly, ________ are an effective method to achieve efficient use of a ________.

Accepted Answer

A)  individual transfer quotas; public good
B)  making a government payment equal to the marginal private benefits; public good
C)  individual transferable quotas; common resource
D)  individual transferable quotas; excludable good
E)  making a government payment equal to the marginal private costs; common resourceF) A) and E)
G) A) and D)

Exam 11: Public Goods and Common Resources

The fact that Florida's consumption of national defense does not preclude North Dakota from consuming the same national defense is an example of

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A private good is defined as a good or service

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Suppose a public good is provided in an economy with only two consumers, Popeye and Captain Hook.If Popeye values the public good at $4,000 per year, and Captain Hook values it at $3,000 per year, the economy's marginal benefit of the public good per year is

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For which type of good is it necessary to sum the marginal benefit curves vertically in order to obtain the economy's marginal benefit curve?

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A good that can be consumed even if the consumer does not pay for it

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When producers are hard to monitor and property rights are too costly, ________ are an effective method to achieve efficient use of a ________.

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A public good is

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How does the principle of minimum differentiation relate to the free-rider problem?

Correct AnswerverifiedThe free-rider problem requires that the...View AnswerShow Answer

Which of the following goods is best described as nonexcludable?

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Why isn't national defense provided by free markets?

Correct AnswerverifiedNational defense is a public good.This f...View AnswerShow Answer

The marginal benefit curve of a public good

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Why are fish in the ocean an example of a resource that suffers from the tragedy of the commons but cattle grazing in a farmer's pasture do not suffer from the tragedy of the commons?

Correct AnswerverifiedFish in the ocean are a common resource ...View AnswerShow Answer

The tendency of political parties to propose identical policies which appeal to the maximum number of voters is referred to as the principle of

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Inefficient overproduction of a public good by the government is

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A good is a private good if

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The reason that private provision of a public good often leads to inefficiency is because

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Which of the following is an example of a pure private good?

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A good or resource that is both nonrival and nonexcludable is

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What are the differences between public goods and private goods?

Correct AnswerverifiedPublic goods are∙ nonrival, which means...View AnswerShow Answer

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource.The efficient outcome is ________.

Correct AnswerverifiedShow Answer

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When producers are hard to monitor and property rights are too costly, are an effective method to achieve efficient use of a .

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The free-rider problem requires that the...
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National defense is a public good.This f...
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Fish in the ocean are a common resource ...
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Public goods are
∙ nonrival, which means...
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