Question 1

What is the tragedy of the commons?

Accepted Answer

The tragedy of the commons is the absenc

Question 2

-The figure above shows the marginal cost and marginal benefit of police protection in the city of Hugo,Oklahoma.Police protection is a public good.If the city of Hugo hires 25 officers,then

Accepted Answer

A)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is more than 25. 
B)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is less than 25. 
C)  marginal benefit will exceed marginal cost, which means that Hugo should reduce the number of officers they hire. 
D)  marginal benefit equals marginal cost. 
E)  None of the above answers is correct. 
A)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is more than 25. 
B)  marginal cost will exceed marginal benefit, which means that the efficient number of officers is less than 25. 
C)  marginal benefit will exceed marginal cost, which means that Hugo should reduce the number of officers they hire. 
D)  marginal benefit equals marginal cost. 
E)  None of the above answers is correct.

Question 3

The government can be large in size because of

Accepted Answer

A)  inefficient overprovision caused by high voter turnout in elections. 
B)  efficient overprovision caused by rational voter ignorance. 
C)  inefficient overprovision caused by rational voter ignorance. 
D)  efficient overprovision caused by irrational voter ignorance. 
E)  inefficient overprovision caused by rational politician/bureaucrat ignorance. 
A)  inefficient overprovision caused by high voter turnout in elections. 
B)  efficient overprovision caused by rational voter ignorance. 
C)  inefficient overprovision caused by rational voter ignorance. 
D)  efficient overprovision caused by irrational voter ignorance. 
E)  inefficient overprovision caused by rational politician/bureaucrat ignorance.

Question 4

Which of the following is necessary for competition in the political marketplace to result in the production of the efficient amount of a public good?

Accepted Answer

A)  bureaucrats practice self-interest 
B)  well informed voters and political parties 
C)  rational ignorance 
D)  maximum differentiation of political competitors 
E)  Answers A, B and D are correct. 
A)  bureaucrats practice self-interest 
B)  well informed voters and political parties 
C)  rational ignorance 
D)  maximum differentiation of political competitors 
E)  Answers A, B and D are correct.

Question 5

-In the figure above,the efficient quantity of satellites to produce is

Accepted Answer

A)  200, because this is where marginal benefit equals marginal cost. 
B)  200, because this is where the market is in equilibrium. 
C)  anywhere below 200, i.e., where marginal benefit exceeds marginal cost. 
D)  anywhere above 200, i.e., where marginal benefit is below marginal cost. 
E)  zero, because no one is willing to pay for satellites. 
A)  200, because this is where marginal benefit equals marginal cost. 
B)  200, because this is where the market is in equilibrium. 
C)  anywhere below 200, i.e., where marginal benefit exceeds marginal cost. 
D)  anywhere above 200, i.e., where marginal benefit is below marginal cost. 
E)  zero, because no one is willing to pay for satellites.

Question 6

The marginal benefit of a public good ________ as more of the good is produced.

Accepted Answer

A)  increases 
B)  decreases 
C)  stays the same 
D)  None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether the marginal cost increases, decreases, or does not change as more is produced. 
E)  None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether more, fewer, or the same number of people consume the good as more is produced. 
A)  increases 
B)  decreases 
C)  stays the same 
D)  None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether the marginal cost increases, decreases, or does not change as more is produced. 
E)  None of the above is correct because the marginal benefit could increase, decrease, or not change depending on whether more, fewer, or the same number of people consume the good as more is produced.

Question 7

A natural monopoly,such as the Internet,is

Accepted Answer

A)  nonrival and excludable. 
B)  rival and excludable. 
C)  nonrival and nonexcludable. 
D)  rival and nonexcludable. 
E)  None of the above answers is correct. 
A)  nonrival and excludable. 
B)  rival and excludable. 
C)  nonrival and nonexcludable. 
D)  rival and nonexcludable. 
E)  None of the above answers is correct.

Question 8

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Tons of } \
\text { fish }
\end{array} & \begin{array} { c } 
\text { Marginal social } \
\text { benefit } \
\text { (dollars per hour) }
\end{array} \
\hline 100 & 700 \
\hline 200 & 600 \
\hline 300 & 500 \
\hline 400 & 400 \
\hline 500 & 300 \
\hline 600 & 200 \
\hline
\end{array}$$
-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers,$300 per hour.The marginal social cost is twice the marginal private cost.With no government intervention,the market is

Accepted Answer

A)  catching the efficient quantity of fish. 
B)  underproducing by 100 tons of fish. 
C)  underproducing by 300 tons of fish. 
D)  overproducing by 300 tons of fish. 
E)  overproducing by 200 tons of fish. 
A)  catching the efficient quantity of fish. 
B)  underproducing by 100 tons of fish. 
C)  underproducing by 300 tons of fish. 
D)  overproducing by 300 tons of fish. 
E)  overproducing by 200 tons of fish.

Question 9

A private good is defined as a good or service

Accepted Answer

A)  that is something tangible. 
B)  that is rival and excludable. 
C)  that is rival and nonexcludable. 
D)  produced by a single country. 
E)  that is nonrival and nonexcludable. 
A)  that is something tangible. 
B)  that is rival and excludable. 
C)  that is rival and nonexcludable. 
D)  produced by a single country. 
E)  that is nonrival and nonexcludable.

Question 10

Which of the following can bring about an efficient level of public goods being provided by the government?

Accepted Answer

A)  voters who do not care about benefits and costs of public goods 
B)  rational ignorance on the part of voters 
C)  competition between political parties trying to win an election 
D)  self-interest among government bureaucrats 
E)  free riding on the part of voters 
A)  voters who do not care about benefits and costs of public goods 
B)  rational ignorance on the part of voters 
C)  competition between political parties trying to win an election 
D)  self-interest among government bureaucrats 
E)  free riding on the part of voters

Question 11

Suppose the government is producing a public good.If the marginal benefit of the last unit of a public good produced is greater than the marginal cost of that unit,to achieve the efficient amount of production,what should be done?

Accepted Answer

A)  The government should produce more units. 
B)  The government should cease production. 
C)  Private firms should take over the production and sale of the good. 
D)  Nothing, because the government is already producing the efficient quantity of the public good. 
E)  The government should produce fewer units. 
A)  The government should produce more units. 
B)  The government should cease production. 
C)  Private firms should take over the production and sale of the good. 
D)  Nothing, because the government is already producing the efficient quantity of the public good. 
E)  The government should produce fewer units.

Question 12

The marginal benefit of a public good is the

Accepted Answer

A)  sum of the marginal benefits of all the individuals at each quantity. 
B)  marginal benefit of the individual person who places the lowest value on the good, multiplied by the number of people in the economy. 
C)  marginal benefit of the individual person who places the highest value on the good, multiplied by the number of people in the economy. 
D)  benefit of the last person's consumption. 
E)  average of the marginal benefits of all the individuals at each quantity. 
A)  sum of the marginal benefits of all the individuals at each quantity. 
B)  marginal benefit of the individual person who places the lowest value on the good, multiplied by the number of people in the economy. 
C)  marginal benefit of the individual person who places the highest value on the good, multiplied by the number of people in the economy. 
D)  benefit of the last person's consumption. 
E)  average of the marginal benefits of all the individuals at each quantity.

Question 13

If a good or resource is rival,it could be a

Accepted Answer

A)  public good. 
B)  private good. 
C)  common resource. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct. 
A)  public good. 
B)  private good. 
C)  common resource. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct.

Question 14

A public good

Accepted Answer

A)  only yields benefits to those that decide to buy it. 
B)  is the same as a common resource. 
C)  is nonrival and nonexcludable. 
D)  is rival. 
A)  only yields benefits to those that decide to buy it. 
B)  is the same as a common resource. 
C)  is nonrival and nonexcludable. 
D)  is rival.

Question 15

A public good is

Accepted Answer

A)  rival and excludable. 
B)  rival and nonexcludable. 
C)  nonrival and excludable. 
D)  nonrival and nonexcludable. 
E)  a good that has an infinite number of substitutes. 
A)  rival and excludable. 
B)  rival and nonexcludable. 
C)  nonrival and excludable. 
D)  nonrival and nonexcludable. 
E)  a good that has an infinite number of substitutes.

Question 16

The marginal benefit curve of a public good

Accepted Answer

A)  slopes downward. 
B)  slopes upward. 
C)  is vertical. 
D)  is horizontal. 
E)  is U-shaped. 
A)  slopes downward. 
B)  slopes upward. 
C)  is vertical. 
D)  is horizontal. 
E)  is U-shaped.

Question 17

When producers are hard to monitor and property rights are too costly,________ is (are)an effective method to achieve efficient use of a(n)________.

Accepted Answer

A)  individual transfer quotas; public good 
B)  making a government payment equal to the marginal private benefits; public good 
C)  individual transferable quotas; common resource 
D)  individual transferable quotas; excludable good 
E)  making a government payment equal to the marginal private costs; common resource 
A)  individual transfer quotas; public good 
B)  making a government payment equal to the marginal private benefits; public good 
C)  individual transferable quotas; common resource 
D)  individual transferable quotas; excludable good 
E)  making a government payment equal to the marginal private costs; common resource

Question 18

Which of the following is NOT   a potential solution to the tragedy of the commons?

Accepted Answer

A)  setting a production quota 
B)  granting individual transferable quotas 
C)  subsidizing use of the resource 
D)  establishing property rights to the resource 
E)  None of the above is correct because they are all potential solutions to the tragedy of the commons. 
A)  setting a production quota 
B)  granting individual transferable quotas 
C)  subsidizing use of the resource 
D)  establishing property rights to the resource 
E)  None of the above is correct because they are all potential solutions to the tragedy of the commons.

Question 19

One important feature that distinguishes a private good from a public good is that

Accepted Answer

A)  only the government can produce private goods. 
B)  nobody can be excluded from enjoying the benefits of a private good. 
C)  a private good is excludable and a public good is nonexcludable. 
D)  if you consume a unit of a private, that means there is no less for someone else. 
E)  a private good is nonrival and a public good is rival. 
A)  only the government can produce private goods. 
B)  nobody can be excluded from enjoying the benefits of a private good. 
C)  a private good is excludable and a public good is nonexcludable. 
D)  if you consume a unit of a private, that means there is no less for someone else. 
E)  a private good is nonrival and a public good is rival.

Question 20

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Minutes of } \
\text { fireworks }
\end{array} & \begin{array} { c } 
\text { Anita's } \boldsymbol { M B } \
\text { (dollars per } \
\text { minute) }
\end{array} & \begin{array} { c } 
\text { Steve's } \boldsymbol { M B } \
\text { (dollars per } \
\text { minute) }
\end{array} \
\hline 16 & \$ 20 & \$ 28 \
\hline 17 & 18 & 25 \
\hline 18 & 16 & 22 \
\hline 19 & 14 & 19 \
\hline 20 & 12 & 16 \
\hline
\end{array}$$
-The table above shows Anita and Steve's marginal benefits for the annual 4th of July fireworks show at City Park.If Anita and Steve are the only two people in the economy,what is the economy's marginal benefit from the 19th minute of fireworks?

Accepted Answer

A)  $38 
B)  $30 
C)  $162 
D)  $129 
E)  $33 
A)  $38 
B)  $30 
C)  $162 
D)  $129 
E)  $33

What is the tragedy of the commons?

-The figure above shows the marginal cost and marginal benefit of police protection in the city of Hugo,Oklahoma.Police protection is a public good.If the city of Hugo hires 25 officers,then

The government can be large in size because of

Which of the following is necessary for competition in the political marketplace to result in the production of the efficient amount of a public good?

-In the figure above,the efficient quantity of satellites to produce is

The marginal benefit of a public good ________ as more of the good is produced.

A natural monopoly,such as the Internet,is

A private good is defined as a good or service

Which of the following can bring about an efficient level of public goods being provided by the government?

Suppose the government is producing a public good.If the marginal benefit of the last unit of a public good produced is greater than the marginal cost of that unit,to achieve the efficient amount of production,what should be done?

The marginal benefit of a public good is the

If a good or resource is rival,it could be a

A public good

A public good is

The marginal benefit curve of a public good

When producers are hard to monitor and property rights are too costly, is (are)an effective method to achieve efficient use of a(n).

Which of the following is NOT a potential solution to the tragedy of the commons?

One important feature that distinguishes a private good from a public good is that

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Public Goods and Common Resources

What is the tragedy of the commons?

-The figure above shows the marginal cost and marginal benefit of police protection in the city of Hugo,Oklahoma.Police protection is a public good.If the city of Hugo hires 25 officers,then

The government can be large in size because of

Which of the following is necessary for competition in the political marketplace to result in the production of the efficient amount of a public good?

-In the figure above,the efficient quantity of satellites to produce is

The marginal benefit of a public good ________ as more of the good is produced.

A natural monopoly,such as the Internet,is

A private good is defined as a good or service

Which of the following can bring about an efficient level of public goods being provided by the government?

Suppose the government is producing a public good.If the marginal benefit of the last unit of a public good produced is greater than the marginal cost of that unit,to achieve the efficient amount of production,what should be done?

The marginal benefit of a public good is the

If a good or resource is rival,it could be a

A public good

A public good is

The marginal benefit curve of a public good

When producers are hard to monitor and property rights are too costly,________ is (are)an effective method to achieve efficient use of a(n)________.

Which of the following is NOT a potential solution to the tragedy of the commons?

One important feature that distinguishes a private good from a public good is that

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

When producers are hard to monitor and property rights are too costly, is (are)an effective method to achieve efficient use of a(n).