Exam 11: Public Goods and Common Resources

A lighthouse might be considered a private good if

Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. -Refer to Table 11-2. Suppose the cost to install each streetlight is $600 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Brown's like the town to install?

A toll on a congested road is in essence

Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except

It would always be a mistake to view

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

National Public Radio would be considered a club good.

Before considering any public project, the government should (i) Compare the total cost and total benefits of the project. (ii) Conduct a cost-benefit analysis. (iii) Infer that citizens who vote for a project are willing to pay equally for it.

Are common resources excludable? Are they rival in consumption?

Scenario 11-3 Consider the following goods: • a fish fillet served at a restaurant • fish in the ocean • exotic fish in a huge aquarium in a privately-owned building -Refer to Scenario 11-3. Which of these goods is the best example of a private good? Briefly explain.

Figure 11-1 -Refer to Figure 11-1. The box labeled D represents

Which of the following is an example of the Tragedy of the Commons?

Figure 11-1 -Refer to Figure 11-1. A tornado siren in a small town is an example of the type of good represented by Box

The value and cost of goods are easiest to determine when the goods are

A good that is rival in consumption and not excludable is called a

Table 11-5 A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip. -Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $750. How many ferry trips should there be to maximize the total surplus of the four business owners?

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

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

Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?

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