Question 1

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

Accepted Answer

A)  are forced to pursue any project in which a single human life is saved. 
B)  are likely to make decisions that optimally allocate society's scarce resources. 
C)  would not pursue any public project that would not save human life. 
D)  would be forced to rely on private markets to provide public goods. 
A)  are forced to pursue any project in which a single human life is saved. 
B)  are likely to make decisions that optimally allocate society's scarce resources. 
C)  would not pursue any public project that would not save human life. 
D)  would be forced to rely on private markets to provide public goods.

Question 2

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except

Accepted Answer

A)  assigning land property rights. 
B)  auctioning off sheep-grazing permits. 
C)  taxing sheep flocks. 
D)  subsidizing sheep flocks. 
A)  assigning land property rights. 
B)  auctioning off sheep-grazing permits. 
C)  taxing sheep flocks. 
D)  subsidizing sheep flocks.

Question 3

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

Accepted Answer

Eliminating poverty is not a good that t

Question 4

A pair of jeans is rival but non-excludable.

Accepted Answer

A) True 
 B)False

Question 5

A free-rider is someone who receives the benefit of a good but avoids paying for it.

Accepted Answer

A) True 
 B)False

Question 6

An AM radio transmission of a baseball game is

Accepted Answer

A)  excludable and rival in consumption. 
B)  excludable and not rival in consumption. 
C)  not excludable and rival in consumption. 
D)  not excludable and not rival in consumption. 
A)  excludable and rival in consumption. 
B)  excludable and not rival in consumption. 
C)  not excludable and rival in consumption. 
D)  not excludable and not rival in consumption.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Table 11-3
This table describes the defense demands for three groups of people in Happyville.The second,third,and fourth column shows the quantity that a group will demand for a given price (the first column).
  
-Refer to Table 11-3.If the marginal cost of national defense is constant at $24 per unit,what is the efficient level of national defense to provide?

Accepted Answer

A)  3 units 
B)  6 units 
C)  13 units 
D)  22 units 
A)  3 units 
B)  6 units 
C)  13 units 
D)  22 units

Question 9

Elephant populations in some African countries have started to rise because

Accepted Answer

A)  poachers and environmentalists are working together to save the elephants. 
B)  new laws make killing elephants and selling their ivory illegal. 
C)  some elephants have been made a private good,and people are allowed to kill elephants on their own property. 
D)  high ivory taxes make it hard to earn a decent return on elephant tusks. 
A)  poachers and environmentalists are working together to save the elephants. 
B)  new laws make killing elephants and selling their ivory illegal. 
C)  some elephants have been made a private good,and people are allowed to kill elephants on their own property. 
D)  high ivory taxes make it hard to earn a decent return on elephant tusks.

Question 10

Mayor Bloomberg of New York proposed a plan in which the city could be "greater" and "greener" by 2030.The plan included imposing a congestion toll.Which of the following is not a characteristic of proposed toll?

Accepted Answer

A)  Car drivers would be charged $8.00 to enter the congestion zone between 6am and 6pm. 
B)  Truck drivers would be charged $21.00 to enter the congestion zone between 6am and 6pm. 
C)  Transit fares would increase by 20 percent. 
D)  Taxis are exempt from the toll. 
A)  Car drivers would be charged $8.00 to enter the congestion zone between 6am and 6pm. 
B)  Truck drivers would be charged $21.00 to enter the congestion zone between 6am and 6pm. 
C)  Transit fares would increase by 20 percent. 
D)  Taxis are exempt from the toll.

Question 11

The provision of a public good generates a

Accepted Answer

A)  positive externality,as does the use of a common resource. 
B)  positive externality and the use of a common resource generates a negative externality. 
C)  negative externality,as does the use of a common resource. 
D)  negative externality and the use of a common resource generates a positive externality. 
A)  positive externality,as does the use of a common resource. 
B)  positive externality and the use of a common resource generates a negative externality. 
C)  negative externality,as does the use of a common resource. 
D)  negative externality and the use of a common resource generates a positive externality.

Question 12

Table 11-2
Consider a small town with only three families,the Jones family,the Harris family,and the Wong 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 $200.How many streetlights should the town install to maximize total surplus from the streetlights?

Accepted Answer

A)  1 streetlight 
B)  2 streetlights 
C)  3 streetlights 
D)  4 streetlights 
A)  1 streetlight 
B)  2 streetlights 
C)  3 streetlights 
D)  4 streetlights

Question 13

Which of the following would not be considered a private good?

Accepted Answer

A)  a pair of jeans 
B)  an apple 
C)  a Honda Civic 
D)  cable TV service 
A)  a pair of jeans 
B)  an apple 
C)  a Honda Civic 
D)  cable TV service

Question 14

A common theme among examples of market failure is

Accepted Answer

A)  the good being provided harms society in some systematic way. 
B)  some item of value does not have an owner with the legal authority to control it. 
C)  cost-benefit analysis will show that private markets should provide the goods and services. 
D)  government intervention decreases the social benefits. 
A)  the good being provided harms society in some systematic way. 
B)  some item of value does not have an owner with the legal authority to control it. 
C)  cost-benefit analysis will show that private markets should provide the goods and services. 
D)  government intervention decreases the social benefits.

Question 15

Which of the following is a disadvantage of government provision of a public good such as national defense?

Accepted Answer

A)  (i)only 
B)  (i)and (ii)only 
C)  (i)and (iii)only 
D)  (i),(ii),and (iii) 
A)  (i)only 
B)  (i)and (ii)only 
C)  (i)and (iii)only 
D)  (i),(ii),and (iii)

Question 16

Goods that are rival in consumption include both

Accepted Answer

A)  natural monopolies and public goods. 
B)  public goods and common resources. 
C)  common resources and private goods. 
D)  private goods and natural monopolies. 
A)  natural monopolies and public goods. 
B)  public goods and common resources. 
C)  common resources and private goods. 
D)  private goods and natural monopolies.

Question 17

Table 11-2
Consider a small town with only three families,the Jones family,the Harris family,and the Wong 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 $400 and the families have agreed to split the cost of the streetlights equally.If the families vote to determine the number of streetlights to install,basing their decision solely on their own willingness to pay (and trying to maximize their own surplus),what is the greatest number of streetlights for which the majority of families would vote "yes?"

Accepted Answer

A)  1 streetlight 
B)  2 streetlights 
C)  3 streetlights 
D)  4 streetlights 
A)  1 streetlight 
B)  2 streetlights 
C)  3 streetlights 
D)  4 streetlights

Question 18

In the Tragedy of the Commons,joint action among the individual citizens would be necessary to solve their common resource problem unless the government intervenes.

Accepted Answer

A) True 
 B)False

Question 19

Markets do not ensure that the air we breathe is clean because

Accepted Answer

A)  clean air has no value. 
B)  the government prevents markets from doing so. 
C)  property rights are not well established for clean air. 
D)  clean air is impossible to produce . 
A)  clean air has no value. 
B)  the government prevents markets from doing so. 
C)  property rights are not well established for clean air. 
D)  clean air is impossible to produce .

Question 20

A tax on gasoline often reduces road congestion because gasoline

Accepted Answer

A)  and driving are complements. 
B)  and driving are substitutes. 
C)  is a normal good,while driving is an inferior good. 
D)  is an inferior good,while driving is a normal good. 
A)  and driving are complements. 
B)  and driving are substitutes. 
C)  is a normal good,while driving is an inferior good. 
D)  is an inferior good,while driving is a normal good.

Exam 11: Public Goods and Common Resources

When an infinite value is placed on human life,policymakers who rely on cost-benefit analysis

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except

Some advocates of antipoverty programs claim that fighting poverty is a public good.Describe why government intervention may be necessary to reduce poverty.

A pair of jeans is rival but non-excludable.

A free-rider is someone who receives the benefit of a good but avoids paying for it.

An AM radio transmission of a baseball game is

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

Elephant populations in some African countries have started to rise because

Mayor Bloomberg of New York proposed a plan in which the city could be "greater" and "greener" by 2030.The plan included imposing a congestion toll.Which of the following is not a characteristic of proposed toll?

The provision of a public good generates a

Which of the following would not be considered a private good?

A common theme among examples of market failure is

Which of the following is a disadvantage of government provision of a public good such as national defense?

Goods that are rival in consumption include both

In the Tragedy of the Commons,joint action among the individual citizens would be necessary to solve their common resource problem unless the government intervenes.

Markets do not ensure that the air we breathe is clean because

A tax on gasoline often reduces road congestion because gasoline

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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