Question 1

Advertising is a way for club goods to be given away free.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following statements is TRUE?

Accepted Answer

A)  A forced rider is someone who helps pay for a public good but doesn't get any benefit from it. 
B)  Public schooling is a private good. 
C)  Public goods should be produced up to the point where consumer surplus equals producer surplus. 
D)  The government cannot produce private goods. 
A)  A forced rider is someone who helps pay for a public good but doesn't get any benefit from it. 
B)  Public schooling is a private good. 
C)  Public goods should be produced up to the point where consumer surplus equals producer surplus. 
D)  The government cannot produce private goods. A

Question 3

A common resource is:

Accepted Answer

A)  likely to be overutilized. 
B)  a good that, when used by one person, leaves less for everyone else. 
C)  rival but nonexcludable. 
D)  All of the answers are correct. 
A)  likely to be overutilized. 
B)  a good that, when used by one person, leaves less for everyone else. 
C)  rival but nonexcludable. 
D)  All of the answers are correct. D

Question 4

Private goods:
I. are excludable.
II. can be priced.
III. are rival in consumption.

Accepted Answer

A)  I only 
B)  II only 
C)  I and III only 
D)  I, II, and III 
A)  I only 
B)  II only 
C)  I and III only 
D)  I, II, and III

Question 5

The need to produce public goods provides a strong argument for:

Accepted Answer

A)  regulation and subsidy. 
B)  regulation and government provision. 
C)  taxation and subsidy. 
D)  taxation and government provision. 
A)  regulation and subsidy. 
B)  regulation and government provision. 
C)  taxation and subsidy. 
D)  taxation and government provision.

Question 6

The tragedy of the commons is often the result of:

Accepted Answer

A)  excludability and rivalry. 
B)  excludability and nonrivalry. 
C)  nonexcludability and rivalry. 
D)  nonexcludability and nonrivalry. 
A)  excludability and rivalry. 
B)  excludability and nonrivalry. 
C)  nonexcludability and rivalry. 
D)  nonexcludability and nonrivalry.

Question 7

Asteroid defense is likely to be ______ by the market because ______.

Accepted Answer

A)  efficiently provided; there are low transaction costs to collecting the operational funding, as suggested by the Coase theorem. 
B)  overprovided; of the market power of the military-industrial complex. 
C)  either overprovided or underprovided; it is a common good. 
D)  underprovided; there is an incentive to free ride. 
A)  efficiently provided; there are low transaction costs to collecting the operational funding, as suggested by the Coase theorem. 
B)  overprovided; of the market power of the military-industrial complex. 
C)  either overprovided or underprovided; it is a common good. 
D)  underprovided; there is an incentive to free ride.

Question 8

A public good is a good produced in the public sector.

Accepted Answer

A) True 
 B)False

Question 9

If a consumer could pay $100 for a new pair of jeans or $100 toward asteroid deflection, what would that consumer likely choose?
I. purchase the jeans
II. purchase asteroid deflection
III. purchase both the jeans and asteroid deflection

Accepted Answer

A)  I only 
B)  II only 
C)  III only 
D)  I and II only 
A)  I only 
B)  II only 
C)  III only 
D)  I and II only

Question 10

Which of the following scenarios describes how a tragedy of the commons problem occurs?

Accepted Answer

A)  A radio station goes out of service because it cannot raise enough money from advertising. 
B)  Illegal immigrants who do not pay taxes benefit from tax-funded school systems. 
C)  Farmers harvest deer out of season rather than pay the high price of beef. 
D)  The establishment of tradable pollution allowances helps reduce pollution. 
A)  A radio station goes out of service because it cannot raise enough money from advertising. 
B)  Illegal immigrants who do not pay taxes benefit from tax-funded school systems. 
C)  Farmers harvest deer out of season rather than pay the high price of beef. 
D)  The establishment of tradable pollution allowances helps reduce pollution.

Question 11

Private goods can be provided by competitive markets because they are:

Accepted Answer

A)  excludable, providing an incentive to pay for and thus to produce these goods. 
B)  excludable, since the market for buying and selling these goods is distinguishable. 
C)  nonexcludable, providing an incentive to pay for and thus to produce these goods. 
D)  nonexcludable, since the market for buying and selling these goods cannot be distinguished. 
A)  excludable, providing an incentive to pay for and thus to produce these goods. 
B)  excludable, since the market for buying and selling these goods is distinguishable. 
C)  nonexcludable, providing an incentive to pay for and thus to produce these goods. 
D)  nonexcludable, since the market for buying and selling these goods cannot be distinguished.

Question 12

Which of the following is an example of a forced rider?

Accepted Answer

A)  a Canadian-American who pays taxes that help maintain the U.S. army in case of a Canadian invasion 
B)  someone without children who recently had to start paying a community fee for the maintenance of a new playground 
C)  a city resident who pays a city tax for a weekly trash removal service 
D)  someone who dislikes the noise coming from a privately owned park and pays taxes to maintain public parks 
A)  a Canadian-American who pays taxes that help maintain the U.S. army in case of a Canadian invasion 
B)  someone without children who recently had to start paying a community fee for the maintenance of a new playground 
C)  a city resident who pays a city tax for a weekly trash removal service 
D)  someone who dislikes the noise coming from a privately owned park and pays taxes to maintain public parks

Question 13

Some researchers estimate that all saltwater fish will be extinct by 2048, in large part due to overfishing. But surveys also show that more households eat chicken and beef than fish; however, neither chickens nor beef are in danger of extinction. Which of the following best explains these observations?

Accepted Answer

A)  The supply of fish has always been less than the supply of chicken and beef. 
B)  Fish tend to be nonexcludable resources, whereas chicken and beef are excludable. 
C)  Fish tend to be nonrival resources, whereas chicken and beef are rival. 
D)  The price of fish is much higher than the price of chicken and beef. 
A)  The supply of fish has always been less than the supply of chicken and beef. 
B)  Fish tend to be nonexcludable resources, whereas chicken and beef are excludable. 
C)  Fish tend to be nonrival resources, whereas chicken and beef are rival. 
D)  The price of fish is much higher than the price of chicken and beef.

Question 14

A tornado warning siren is an example of a:

Accepted Answer

A)  private good. 
B)  public good. 
C)  common resource. 
D)  rival public good. 
A)  private good. 
B)  public good. 
C)  common resource. 
D)  rival public good.

Question 15

If you're camping with a few friends, which of the following is a public good?

Accepted Answer

A)  the food 
B)  the campfire 
C)  the tents 
D)  the toilet paper 
A)  the food 
B)  the campfire 
C)  the tents 
D)  the toilet paper

Question 16

HBO shows are not considered club goods.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following goods is nonexcludable?

Accepted Answer

A)  a can of Coke 
B)  a concert at Radio City Music Hall 
C)  national defense 
D)  an apartment building 
A)  a can of Coke 
B)  a concert at Radio City Music Hall 
C)  national defense 
D)  an apartment building

Question 18

Owned resources still face the tragedy of the commons.

Accepted Answer

A) True 
 B)False

Question 19

A good is excludable if:

Accepted Answer

A)  the government can regulate the availability of the good. 
B)  it is a normal good. 
C)  several people can enjoy the good simultaneously. 
D)  people can be prevented from using it. 
A)  the government can regulate the availability of the good. 
B)  it is a normal good. 
C)  several people can enjoy the good simultaneously. 
D)  people can be prevented from using it.

Question 20

Both public goods and common resources are:

Accepted Answer

A)  rival in consumption. 
B)  nonexcludable. 
C)  excludable. 
D)  nonrival in consumption. 
A)  rival in consumption. 
B)  nonexcludable. 
C)  excludable. 
D)  nonrival in consumption.

Exam 19: Public Goods and the Tragedy of the Commons

Advertising is a way for club goods to be given away free.

Which of the following statements is TRUE?

A common resource is:

Private goods: I. are excludable. II. can be priced. III. are rival in consumption.

The need to produce public goods provides a strong argument for:

The tragedy of the commons is often the result of:

Asteroid defense is likely to be ______ by the market because ______.

A public good is a good produced in the public sector.

If a consumer could pay $100 for a new pair of jeans or $100 toward asteroid deflection, what would that consumer likely choose? I. purchase the jeans II. purchase asteroid deflection III. purchase both the jeans and asteroid deflection

Which of the following scenarios describes how a tragedy of the commons problem occurs?

Private goods can be provided by competitive markets because they are:

Which of the following is an example of a forced rider?

A tornado warning siren is an example of a:

If you're camping with a few friends, which of the following is a public good?

HBO shows are not considered club goods.

Which of the following goods is nonexcludable?

Owned resources still face the tragedy of the commons.

A good is excludable if:

Both public goods and common resources are:

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

Asteroid defense is likely to be by the market because .