Question 1

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 $380 and the 4 homeowners have agreed to split all tree-planting costs equally.Which homeowner(s) would be opposed to planting any trees?

Accepted Answer

A)   only Davis
B)   only Adams and Davis
C)   only Adams,Benitez,and Davis
D)   Adams,Benitez,Chen,and DavisE) B) and D)
F) All of the above

Question 2

In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates) .In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

Accepted Answer

A)   On the questionnaire,some residents are likely to exaggerate the value they associate with the park.
B)   On the questionnaire,some residents are likely to exaggerate the costs they associate with the park.
C)   The use of such a questionnaire in cost-benefit analysis is likely to produce only rough approximations of residents' perceptions of the costs and benefits of a park.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 3

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except

Accepted Answer

A)   assigning land property rights.
B)   auctioning off sheep-grazing permits.
C)   taxing sheep flocks.
D)   subsidizing sheep flocks.E) B) and C)
F) B) and D)

Question 4

Figure 11-1
 
-Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

Accepted Answer

A)   a pair of pants
B)   a lighthouse
C)   a bicycle
D)   a cattle ranchE) A) and B)
F) A) and C)

Question 5

Markets may fail to allocate resources efficiently when property rights are not well established.

Accepted Answer

A) True 
 B)False

Question 6

Market failure associated with the free-rider problem is a result of

Accepted Answer

A)   a problem associated with pollution.
B)   benefits that accrue to those who don't pay.
C)   losses that accrue to providers of the product.
D)   market power.E) All of the above
F) A) and B)

Question 7

A local park filled with picnickers 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) All of the above
F) A) and B)

Question 8

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Accepted Answer

A) True 
 B)False

Question 9

Under which of the following scenarios would a park be considered a public good?

Accepted Answer

A)   Visitors to the park must pay an admittance fee,but there are always plenty of empty picnic tables.
B)   Vistors to the park must pay an admittance fee and frequently all of the picnic tables are in use.
C)   Visitors can enter the park free of charge and there are always plenty of empty picnic tables.
D)   Visitors can enter the park free of charge,but frequently all of the picnic tables are in use.E) A) and D)
F) B) and C)

Question 10

One of the least regulated common resources today is

Accepted Answer

A)   state parks.
B)   the ocean.
C)   forest preserves.
D)   the Great Lakes.E) B) and C)
F) B) and D)

Question 11

At the local park there is a playground for children to use.While anyone is allowed to use the playground,it is often very busy,reducing the enjoyment of many of the children who use it.The playground is a

Accepted Answer

A)   private good.
B)   club good.
C)   common resource.
D)   public good.E) B) and D)
F) None of the above

Question 12

The old lyric "the best things in life are free"

Accepted Answer

A)   is not true for any goods.
B)   is even true for some goods that have a price.
C)   refers to goods provided by nature or the government.
D)   refers to goods provided by the market.E) A) and D)
F) A) and C)

Question 13

Tolls are not effective in altering people's incentives to drive during rush hour.

Accepted Answer

A) True 
 B)False

Question 14

Roads can be considered either public goods or common resources,depending on how congested they are.

Accepted Answer

A) True 
 B)False

Question 15

Private decisions about consumption of common resources and production of public goods usually lead to an

Accepted Answer

A)   efficient allocation of resources and external effects.
B)   efficient allocation of resources and no external effects.
C)   inefficient allocation of resources and external effects.
D)   inefficient allocation of resources and no external effects.E) A) and D)
F) C) and D)

Question 16

When the absence of property rights causes a market failure,the government can potentially solve the problem

Accepted Answer

A)   by clearly defining property rights.
B)   through regulation.
C)   by supplying the good itself.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 17

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

Accepted Answer

A)   Both Zoe and Zach receive low-cost dental care at the local dental school,so neither of them pays the full cost of the care.
B)   Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income.Yet his next door neighbor,Alice,is not eligible for the free lunch.
C)   Bruce owns Buster,a large dog who barks whenever anyone walks near his house.Betty lives next to Bruce,and Buster's barking can be heard whenever anyone walks near her house,too.Thus,Betty receives free protection from burglars because of Buster's barking.
D)   Sam 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) C) and D)
F) B) and C)

Question 18

Markets fail to allocate resources efficiently when

Accepted Answer

A)   prices fluctuate.
B)   people who have property rights abuse their privileges.
C)   property rights are not well established.
D)   the government refuses to intervene in private markets.E) None of the above
F) A) and D)

Question 19

One way to eliminate the Tragedy of the Commons is to

Accepted Answer

A)   increase law enforcement in public areas.
B)   limit access to the commons.
C)   increase access to the commons.
D)   decrease taxes.E) All of the above
F) A) and D)

Question 20

It would always be a mistake to view

Accepted Answer

A)   a tornado siren as a public good.
B)   a congested road as a common resource.
C)   cable TV as a common resource.
D)   a mathematical theorem as a public good.E) B) and C)
F) All of the above

Exam 11: Public Goods and Common Resources

Markets fail to allocate resources efficiently when

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

Correct Answer
verified

Roads can be considered either public goods or common resources,depending on how congested they are.

Correct Answer
verified

Correct Answer
verified

When the absence of property rights causes a market failure,the government can potentially solve the problem

Correct Answer
verified

Under which of the following scenarios would a park be considered a public good?

Correct Answer
verified

Private decisions about consumption of common resources and production of public goods usually lead to an

Correct Answer
verified

One way to eliminate the Tragedy of the Commons is to

Correct Answer
verified

Market failure associated with the free-rider problem is a result of

Correct Answer
verified

At the local park there is a playground for children to use.While anyone is allowed to use the playground,it is often very busy,reducing the enjoyment of many of the children who use it.The playground is a

Correct Answer
verified

Markets may fail to allocate resources efficiently when property rights are not well established.

Correct Answer
verified

It would always be a mistake to view

Correct Answer
verified

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except

Correct Answer
verified

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

Correct Answer
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A local park filled with picnickers is

Correct Answer
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In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates) .In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

Correct Answer
verified

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct Answer
verified

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Correct Answer
verified

The old lyric "the best things in life are free"

Correct Answer
verified

One of the least regulated common resources today is

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Markets fail to allocate resources efficiently when

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Roads can be considered either public goods or common resources,depending on how congested they are.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When the absence of property rights causes a market failure,the government can potentially solve the problem

Correct AnswerverifiedShow Answer

Under which of the following scenarios would a park be considered a public good?

Correct AnswerverifiedShow Answer

Private decisions about consumption of common resources and production of public goods usually lead to an

Correct AnswerverifiedShow Answer

One way to eliminate the Tragedy of the Commons is to

Correct AnswerverifiedShow Answer

Market failure associated with the free-rider problem is a result of

Correct AnswerverifiedShow Answer

At the local park there is a playground for children to use.While anyone is allowed to use the playground,it is often very busy,reducing the enjoyment of many of the children who use it.The playground is a

Correct AnswerverifiedShow Answer

Markets may fail to allocate resources efficiently when property rights are not well established.

Correct AnswerverifiedShow Answer

It would always be a mistake to view

Correct AnswerverifiedShow Answer

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except

Correct AnswerverifiedShow Answer

Figure 11-1 -Refer to Figure 11-1.Which of the following items is not a clear-cut example of the type of good represented by Box A?

Correct AnswerverifiedShow Answer

A local park filled with picnickers is

Correct AnswerverifiedShow Answer

In a certain city,the government is considering acquiring some land and turning it into a park (without any fences or gates) .In an attempt to determine the extent to which residents of the city would value the park,residents are asked to fill out a questionnaire.Which of the following is correct?

Correct AnswerverifiedShow Answer

Tolls are not effective in altering people's incentives to drive during rush hour.

Correct AnswerverifiedShow Answer

The profit motive that stems from private ownership means that elephant populations are best protected as common resources.

Correct AnswerverifiedShow Answer

The old lyric "the best things in life are free"

Correct AnswerverifiedShow Answer

One of the least regulated common resources today is

Correct AnswerverifiedShow Answer

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