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Exam 11: Public Goods and Common Resources

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Question 51

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For the government to provide a product with tax revenue,what must be the case

A) The total cost must exceed the total benefit.
B) The government must be able to produce the product cheaper than the private market could.
C) The total benefit must exceed the total cost.
D) The marginal benefit must exceed the marginal cost.

E) A) and C)
F) A) and D)

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Question 52

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The Arkell Spring Grounds is a high yielding bedrock aquifer that produces numerous fresh water springs along the Eramosa River northeast of the village of Arkell.Any farmer with land above the aquifer can at present pump water out of it.Using economic terms,what is the aquifer

A) The aquifer is a public good that must be publicly owned to be used efficiently.
B) The aquifer is a private good that must be privately owned to be used efficiently.
C) The aquifer is a common property resource that will be overused if nobody owns it.
D) The aquifer is a club good that should be left as it is.

E) A) and D)
F) A) and B)

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Question 53

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How can the free-rider problem become worse

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

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

The local fire department wants to buy some new equipment at a cost of $2 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 which of the following

What have Canadian studies shown is the approximate value of a statistical life

What,in essence,is a toll on congested roads

There are no goods in this day and age that can be consumed without paying for them.

When one person enjoys the benefit of national defence,he or she reduces the benefit to others.

The government developed the patent system so that private inventors could make a reasonable profit from their own inventions.

Why are proposals to use road tolls in an effort to reduce traffic congestion often rejected by the public

What can we do to deal with the externalities associated with public goods and common resources

The citizens of Smalltown,Canada like seeing fireworks on Canada Day.Each of the town's 1000 residents places a $5 value on the experience.The cost of putting on a fireworks display is $1000.Should there be a fireworks display What is socially optimal Would the private market result in a fireworks display

What is one way for the government to practically address the problem of road congestion

In an economy,when goods do not have a price,who or what primarily ensures that the good is produced

What are both public goods and common resources

If one person's use of a good diminishes another person's enjoyment of it,how is the good described

You are the mayor of a small town with 2000 residents.The head of your economic development agency recently conducted a survey in which the 2000 residents said that a public concert in the centre of town would be worth $20 to each of them.Since it costs only $5000 to hold the concert,you organized and held the concert,which everyone in town enjoyed.But when you asked for donations to pay for the concert,you only collected $30 in total.What do you know

The privately owned school system in Smalltown has a virtually unlimited capacity.It accepts all applicants and operates on both tuition and private donations.Although every resident places value on having an educated community,the school's revenues have suffered lately due to a large decline in private donations from the elderly population.If the private market quantity of education is below the socially desirable quantity,how can Smalltown remedy its problem