Question 1

The government can increase economic efficiency by using tax revenue to produce public goods.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a list of nonrival private goods only?

Accepted Answer

A)  cable Internet service, toll highways, public roads, soup kitchen meals 
B)  a public beach, soup kitchen meals, public roads, smog reduction 
C)  online video games, a private beach, toll highways, cable Internet service 
D)  national defense, a lighthouse, smog reduction, cable Internet service 
A)  cable Internet service, toll highways, public roads, soup kitchen meals 
B)  a public beach, soup kitchen meals, public roads, smog reduction 
C)  online video games, a private beach, toll highways, cable Internet service 
D)  national defense, a lighthouse, smog reduction, cable Internet service

Question 3

A public good is:

Accepted Answer

A)  nonrival and nonexcludable. 
B)  rival and nonexcludable. 
C)  rival and excludable. 
D)  nonrival and excludable. 
A)  nonrival and nonexcludable. 
B)  rival and nonexcludable. 
C)  rival and excludable. 
D)  nonrival and excludable.

Question 4

A public roadway is an example of a good that is excludable and nonrival.

Accepted Answer

A) True 
 B)False

Question 5

The tragedy of the commons refers to the:

Accepted Answer

A)  underproduction of public goods in economic markets. 
B)  underproduction of a common good. 
C)  overuse of a nonrival and nonexcludable good. 
D)  overuse of a rival but nonexcludable good. 
A)  underproduction of public goods in economic markets. 
B)  underproduction of a common good. 
C)  overuse of a nonrival and nonexcludable good. 
D)  overuse of a rival but nonexcludable good.

Question 6

Although the provision of nonrival private goods is ________, we typically consider it ________.

Accepted Answer

A)  efficient; an inefficient allocation due to its nonrival nature 
B)  inefficient; not that big a deal because we value diversity and creativity 
C)  inefficient; a big deal because it leads to many forced riders 
D)  efficient; a big deal because it leads to other types of market inefficiencies 
A)  efficient; an inefficient allocation due to its nonrival nature 
B)  inefficient; not that big a deal because we value diversity and creativity 
C)  inefficient; a big deal because it leads to many forced riders 
D)  efficient; a big deal because it leads to other types of market inefficiencies

Question 7

In the case of broadcast, antenna television, the ______ problem is partly overcome through the use of advertising.

Accepted Answer

A)  free rider problem 
B)  revenue stream problem 
C)  liquidity problem 
D)  accessibility problem 
A)  free rider problem 
B)  revenue stream problem 
C)  liquidity problem 
D)  accessibility problem

Question 8

The incentive to dedicate private resources to maintaining a common resource is low because:

Accepted Answer

A)  there is no benefit from maintenance of a common resource. 
B)  entrepreneurs have not found a way to profit from common resources. 
C)  the benefits of maintenance are external, not private benefits. 
D)  maintenance is very expensive. 
A)  there is no benefit from maintenance of a common resource. 
B)  entrepreneurs have not found a way to profit from common resources. 
C)  the benefits of maintenance are external, not private benefits. 
D)  maintenance is very expensive.

Question 9

Radio is a:

Accepted Answer

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

Question 10

Which of the following is a list of excludable and nonrival goods only?

Accepted Answer

A)  cable Internet service, toll highways, public roads, soup kitchen meals 
B)  online video games, a private beach, toll highways, cable Internet service 
C)  a public beach, soup kitchen meals, public roads, smog reduction 
D)  national defense, a lighthouse, smog reduction, cable Internet service 
A)  cable Internet service, toll highways, public roads, soup kitchen meals 
B)  online video games, a private beach, toll highways, cable Internet service 
C)  a public beach, soup kitchen meals, public roads, smog reduction 
D)  national defense, a lighthouse, smog reduction, cable Internet service

Question 11

The tragedy of the commons is the tendency for any good which is:

Accepted Answer

A)  rival and excludable to be underused and overmaintained. 
B)  nonrival and nonexcludable to be underused and overmaintained. 
C)  rival and nonexcludable to be overused and undermaintained. 
D)  nonrival and excludable to be overused and undermaintained. 
A)  rival and excludable to be underused and overmaintained. 
B)  nonrival and nonexcludable to be underused and overmaintained. 
C)  rival and nonexcludable to be overused and undermaintained. 
D)  nonrival and excludable to be overused and undermaintained.

Question 12

Many states have strict regulations regarding the hunting of big game animals (i.e., bison, elk, moose, etc.). For example, in the state of Washington, hunters wishing to hunt elk must purchase a tag. Upon purchase of the tag, individuals must decide in advance on the area in which they wish to hunt and with which weapon, and they are locked into these decisions for the entire season. Each person may purchase only one tag per year and, in 2009, the cost for a nonresident of Washington to purchase a tag was $396.Why would state governments impose such strict regulations on the hunting of big game in their states? Would the cost of an elk tag for residents of Washington be higher or lower than the cost for nonresidents? Explain.

Accepted Answer

Governments impose these regulations to

Question 13

In 2008, Google lobbied the Federal Communications Commission to open up some of the available wireless spectrum to Google so that they may offer a free national wireless Internet service. Given that Internet subscribers currently pay anywhere from $10 to $100 per month for service, explain why Google would be willing to give such a valuable service away for free.

Accepted Answer

Giving away the service without charge g

Question 14

To use a ______ good without paying is typically legal. To use a ______ good without paying is typically illegal.

Accepted Answer

A)  private; public 
B)  public; private 
C)  public; inexpensive 
D)  inexpensive; private 
A)  private; public 
B)  public; private 
C)  public; inexpensive 
D)  inexpensive; private

Question 15

Already, nearly 30% of seafood species have collapsed.

Accepted Answer

A) True 
 B)False

Question 16

A good is nonrival if:

Accepted Answer

A)  the good does not cause rivalry between the people using the good. 
B)  the good potentially creates rivalry between the people using the good. 
C)  one person's use of the good reduces the ability of another person to use the same good. 
D)  one person's use of the good does not reduce the ability of another person to use the same good. 
A)  the good does not cause rivalry between the people using the good. 
B)  the good potentially creates rivalry between the people using the good. 
C)  one person's use of the good reduces the ability of another person to use the same good. 
D)  one person's use of the good does not reduce the ability of another person to use the same good.

Question 17

A rival good is one where:

Accepted Answer

A)  one person's use does not impinge on another person's ability to enjoy the same good. 
B)  one person's use prevents another person's ability to use that good at the same time. 
C)  two people can use the same good at the same time. 
D)  the good is simultaneously nonexcludable and public. 
A)  one person's use does not impinge on another person's ability to enjoy the same good. 
B)  one person's use prevents another person's ability to use that good at the same time. 
C)  two people can use the same good at the same time. 
D)  the good is simultaneously nonexcludable and public.

Question 18

Which of the following statements is FALSE?

Accepted Answer

A)  The total benefit of a public good equals the sum of the benefits to each person. 
B)  It is harder for society to produce optimal amounts of public goods than it is for private goods. 
C)  The United States Postal Service is not a public good. 
D)  People value public goods differently. 
A)  The total benefit of a public good equals the sum of the benefits to each person. 
B)  It is harder for society to produce optimal amounts of public goods than it is for private goods. 
C)  The United States Postal Service is not a public good. 
D)  People value public goods differently.

Question 19

Which of the following scenarios best describes a tragedy of the commons problem?

Accepted Answer

A)  Neighborhood residents discover strawberry plants in the flower beds at the city park. 
B)  Illegal immigrants who do not pay taxes benefit from tax-funded police patrols. 
C)  Pacifists become forced riders in tax hikes to fund national defense plans. 
D)  There is overcrowding on otherwise nice public beaches. 
A)  Neighborhood residents discover strawberry plants in the flower beds at the city park. 
B)  Illegal immigrants who do not pay taxes benefit from tax-funded police patrols. 
C)  Pacifists become forced riders in tax hikes to fund national defense plans. 
D)  There is overcrowding on otherwise nice public beaches.

Question 20

A solution to the tragedy of the commons is to convert common resources to public goods.

Accepted Answer

A) True 
 B)False

Exam 19: Public Goods and the Tragedy of the Commons

The government can increase economic efficiency by using tax revenue to produce public goods.

Which of the following is a list of nonrival private goods only?

A public good is:

A public roadway is an example of a good that is excludable and nonrival.

The tragedy of the commons refers to the:

Although the provision of nonrival private goods is ________, we typically consider it ________.

In the case of broadcast, antenna television, the ______ problem is partly overcome through the use of advertising.

The incentive to dedicate private resources to maintaining a common resource is low because:

Radio is a:

Which of the following is a list of excludable and nonrival goods only?

The tragedy of the commons is the tendency for any good which is:

To use a ______ good without paying is typically legal. To use a ______ good without paying is typically illegal.

Already, nearly 30% of seafood species have collapsed.

A good is nonrival if:

A rival good is one where:

Which of the following statements is FALSE?

Which of the following scenarios best describes a tragedy of the commons problem?

A solution to the tragedy of the commons is to convert common resources to public goods.

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

Although the provision of nonrival private goods is , we typically consider it .

To use a good without paying is typically legal. To use a good without paying is typically illegal.