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Exam 11: Public Goods and Common Resources

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Question 81

Multiple Choice

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The phenomenon of free riding is most closely associated with which type of good?

A) Private goods
B) Club goods
C) Inferior goods
D) Public goods

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

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Question 82

Multiple Choice

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Which of the following pairs of goods includes a good that is excludable and rival in consumption as well as a good that is not excludable and not rival in consumption?

A) Tablet computer, membership at a gym that always has plenty of open equipment and classes
B) Tablet computer, national defense
C) Congested nontoll road, national defense
D) Online music subscription, streetlight

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

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Question 83

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Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

In what way do common resources give rise to negative externalities?

Which of the following is not a common resource?

The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.

Pay-per-view broadcasts are

Which two types of goods are excludable?

Someone who uses a good without paying for it is called a ?

Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?

Imagine a 2,000-acre park with picnic benches, trees, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking, and the trash cans overflow with food wrappers on summer afternoons. Otherwise, it is a great place. The park is a common resource because

The mayor of Newton is considering proposals to deal with an unsafe intersection. She could install a traffic light at a cost of $50,000 or she could install stop signs at a cost of $5,000. The traffic light is expected to reduce the risk of fatality by 0.45 percent and the stop signs are expected to reduce the risk of fatality by 0.054 percent. If the value of human life is estimated to be $10 million, what choice should the mayor make? Briefly explain.

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

Are public goods excludable? Are they rival in consumption?

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

Under which of the following scenarios would a park be considered a common resource?

In what way do public goods give rise to positive externalities?

Pollution is a negative externality, but it is not appropriate to view the problem of pollution as a common-resource problem.

"Given that most people like to get 'free stuff,' it follows that goods that are available free of charge are produced and consumed in the proper amounts in a market economy." What is wrong with this statement?

Which of the following is a disadvantage of government provision of a public good?