Exam 11: Public Goods and Common Resources

Reggie,Rachael,and Rudy all enjoy looking at flowers blooming in gardens in their neighborhood.The neighborhood association is considering planting a flower garden around the sign at the entrance to the neighborhood.Reggie values the garden at $20,Rachael at $35,and Rudy at $50.The flowers and labor for the garden cost $85.What should the neighborhood association do?

On holiday weekends thousands of people picnic in state parks.Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero.Suppose that the Wisconsin State Park Service institutes a variable fee structure.On weekdays when the picnic areas get little use,the fee is zero.On normal weekends,the fee is $5 per person.On holiday weekends,the fee is $15 per person.The fee system corrects a problem known as the

When something of value has no price attached to it,

Which of the following is not an advantage of road tolls as a way to reduce traffic?

A Maine legislator wanted to create a deposit on cigarettes butts.If implemented,people would have the incentive to (1)not toss cigarette butts onto public streets and sidewalks,and (2)pick butts up to redeem them for the cash.The degradation of the environment from littered cigarette butts is a

If Toby and Pete are the only two fishermen in town and neither is bothered by the other's fishing,the lake they fish in is not a common resource.

Governments can improve market outcomes for

Which of the following statements is not correct?

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

One solution to the "Tragedy of the Commons" is to turn the common resource into a private good.

The Occupational Safety and Health Administration (OSHA)has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of diet soft drinks is 0.0005.The cost of imposing a regulation that would ban the chemical is $18 million.If the value of a human life is equal to $10 million,how many people must the policy affect in order for the benefits to exceed the costs?

The Whitefish Bay Public Library has a large number of books that anyone with a library card may borrow.Anyone can obtain a card for free.Because the number of copies of each book is limited,not everyone can have the same book at the same time.What type of good would the library books be classified as in this case?

The Tragedy of the Commons can be corrected by

Which of the following is not a public good?

Table 11-1 Consider the town of Tritown with only three residents,Ed,Jim,and Tony.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 $30 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?"

The national defense of the United States is not rival because

Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

Bill owns 3 acres of beautiful wooded land.When Bill decides to move to be closer to his grandchildren,he donates the land to the state with the understanding that the land will be used as a state park.This state park is large enough that it is not congested.It is an example of a good that is

Why has the value of ivory threatened the extinction of the elephant,whereas the value of beef has enhanced the survival of the cow?

One proposed solution to overused,deteriorating national parks would be to