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Exam 11: Public Goods and Common Resources

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Question 71

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Figure 11-1 -Refer to Figure 11-1. For which two boxes is it the case that externalities arise because something of value has no price attached to it?

A) Box A and Box B
B) Box A and Box C
C) Box B and Box D
D) Box C and Box D

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

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Question 72

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Which of the following is not a common resource?

A) clean air
B) clean water
C) open grazing land
D) national defense

E) B) and D)
F) B) and C)

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Question 73

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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?

An economics professor, upset about the rising cost of textbooks, proposed that his department purchase 50 copies of a statistics book so the students in the statistics class would not have to purchase their own books but rather could borrow a book for the semester and then return it for the next class to use. Which of the following strategies would not prevent a common resource problem with the textbooks?

The pollution market failure is an example of the free rider problem.

Figure 11-1 -Refer to Figure 11-1. Which of the following items is not an example of the type of good represented by Box D?

The goal of requiring licenses for hunting and fishing is

In determining whether and how much of a public good to provide, cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Suppose that installing an overhead pedestrian walkway would cost a college town $150,000. The walkway is expected to reduce the risk of fatality by 3 percent, and the cost of a human life is estimated at $10 million. The town should

Table 11-6 Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning. ​ ​ -Refer to Table 11-6. Suppose the cost to clean the lake is $40 per hour and that the residents have agreed to split the cost of cleaning the lake equally. If it was decided that the lake will be cleaned for the number of hours that maximizes total surplus of Widgetapolis, how much individual surplus will John receive in total?

The town of Isle is on a small island connected to Big City by a single bridge. Most of the residents of Isle work in Big City. As a result, the bridge becomes very congested for 2 hours each day at the typical morning and evening commute times. Which of the following policies considered by the mayor of Isle would likely be most effective in alleviating the congestion?

Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

Each of the following would be considered a common resource except a

Table 11-1 Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. 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 $24 per acre and that the residents have agreed to split the cost of building the park equally. If the residents vote to determine the size of park to build, basing their decision solely on their own willingness to pay (and trying to maximize their own surplus) , what is the largest park size for which the majority of residents would vote "yes?"

An example of the "Tragedy of the Commons" is litter in the picnic area of a local park.

Cost-benefit analysis is important to determine the role of government in our economy because

Goods that are not excludable are usually

To achieve the optimal provision of public goods, the

Which of the following is not a public good?

Which of the following goods is rival in consumption and excludable?