Question 1

Clean water in a river is nonexcludable because:

Accepted Answer

A)  it is not possible to prevent consumption by people who do not pay for it.
B)  more than one person can consume the same unit of the good at the same time.
C)  individuals ignore the effect their use has on the amount of the resource remaining for others.
D)  consumption is inefficiently low.E) All of the above
F) A) and B)

Question 2

Volunteer fire departments are good examples of the _____ provision of _____.

Accepted Answer

A)  private;private goods
B)  public;common resources
C)  private;public goods
D)  public;artificially scarce goodsE) B) and C)
F) All of the above

Question 3

_____ are a good that is rival in consumption and nonexcludable.

Accepted Answer

A)  Public parks
B)  Public policy,such as national economic policy
C)  Private beaches
D)  National defenseE) All of the above
F) A) and C)

Question 4

Fish in a public lake are common resources because the private market _____ prevent consumption by people who do not pay for access to fish.Further,the same fish _____ be consumed more than once.

Accepted Answer

A)  can;can
B)  cannot;cannot
C)  can;cannot
D)  cannot;canE) C) and D)
F) A) and B)

Question 5

If a good has a marginal cost of production of zero and an inefficiently low level of consumption,the good must be a(n) :

Accepted Answer

A)  private good.
B)  public good.
C)  common resource.
D)  artificially scarce good.E) C) and D)
F) None of the above

Question 6

For a nonexcludable good like national defense,the private market will lead to _____ of the good.

Accepted Answer

A)  too much production
B)  too much consumption
C)  too little production
D)  the efficient level of consumptionE) All of the above
F) None of the above

Question 7

Use the following to answer question:
Figure: An Individual's Marginal Benefit from a Public Good 
-(Figure: An Individual's Marginal Benefit from a Public Good) Use Figure: An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good;each individual has the marginal benefit curve shown in the figure.What is the marginal social benefit from four units of the public good?

Accepted Answer

A)  $0
B)  $8
C)  $16
D)  $32E) B) and D)
F) A) and D)

Question 8

For a public good,the marginal social benefit will be higher than any individual's marginal benefit of consumption.

Accepted Answer

A) True 
 B)False

Question 9

Which example is considered a nonexcludable good?

Accepted Answer

A)  health care
B)  national defense
C)  education
D)  ice creamE) B) and D)
F) B) and C)

Question 10

Which good is MOST likely a common resource?

Accepted Answer

A)  the Super Bowl
B)  a public park
C)  a pair of pants
D)  the fire departmentE) A) and C)
F) C) and D)

Question 11

Every few months,public radio announces a call for pledge support.During this time,it asks listeners to contribute to their local public radio station.Although they raise money during this time,it often falls short of the amount they wish to raise because:

Accepted Answer

A)  they do not make the pledge period long enough.
B)  listeners know they will be able to hear public radio,even if they don't contribute.
C)  public radio free-rides on the listeners.
D)  the marginal social cost equals the marginal social benefit of public radio listening.E) B) and C)
F) A) and B)

Question 12

In a market economy,goods that are nonrival in consumption are subject to inefficiently low production.

Accepted Answer

A) True 
 B)False

Question 13

For a good to be efficiently provided by the private market,it must be:

Accepted Answer

A)  rival in consumption and nonexcludable.
B)  nonrival in consumption and excludable.
C)  a common resource.
D)  rival in consumption and excludable.E) B) and D)
F) A) and B)

Question 14

Which example is considered an artificially scarce good?

Accepted Answer

A)  a candy bar
B)  a free art exhibit in a city park
C)  a pay-per-view boxing match on cable television
D)  an interstate highway without tollsE) A) and B)
F) C) and D)

Question 15

A common resource is a good or service for which exclusion is _____ and that is _____ in consumption.

Accepted Answer

A)  possible;rival
B)  possible;nonrival
C)  not possible;rival
D)  not possible;nonrivalE) A) and D)
F) None of the above

Question 16

Which example best illustrates a good whose consumption is NOT excludable?

Accepted Answer

A)  clothing
B)  ice cream
C)  a taco
D)  clean airE) None of the above
F) A) and D)

Question 17

Use the following to answer question:
Figure: Market Failure 
-(Figure: Market Failure) Use Figure: Market Failure.In the figure,the equilibrium price is _____,and the equilibrium quantity is _____ for a competitive market.

Accepted Answer

A)  A;E
B)  A;G
C)  B;F
D)  C;EE) All of the above
F) B) and D)

Question 18

(Scenario: Alexander and Vanessa) Use Scenario: Alexander and Vanessa.If the socially optimal level of scientific research is produced and if both Vanessa and Alexander are truthful in disclosing the marginal private benefits they expect to receive from this research,what is the price per unit of research that Vanessa is willing to pay at the social optimum? Scenario: Alexander and Vanessa
Alexander and Vanessa benefit from scientific research.Alexander's marginal private benefit from such research is given by the equation MPB = 200 - Q,where Q refers to the amount of research undertaken and MPB captures the marginal private benefit Alexander gets from different marginal quantities.Meanwhile,Vanessa's marginal private benefit from such research is given by the equation MPB = 100 - Q.The marginal social cost of such research is constant at $100.

Accepted Answer

A)  $0
B)  $50
C)  $100
D)  $300E) A) and B)
F) None of the above

Question 19

Common resources tend to be _____ in private markets.

Accepted Answer

A)  priced too high
B)  efficiently priced
C)  overconsumed
D)  underconsumedE) A) and B)
F) A) and C)

Question 20

The best example of a good whose consumption is NOT excludable is:

Accepted Answer

A)  a yard.
B)  a house.
C)  a bicycle.
D)  national defense.E) C) and D)
F) B) and C)

Exam 17: Public Goods and Common Resources

In a market economy,goods that are nonrival in consumption are subject to inefficiently low production.

Correct Answer
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If a good has a marginal cost of production of zero and an inefficiently low level of consumption,the good must be a(n) :

Correct Answer
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Common resources tend to be _____ in private markets.

Correct Answer
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Every few months,public radio announces a call for pledge support.During this time,it asks listeners to contribute to their local public radio station.Although they raise money during this time,it often falls short of the amount they wish to raise because:

Correct Answer
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Which example is considered an artificially scarce good?

Correct Answer
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The best example of a good whose consumption is NOT excludable is:

Correct Answer
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Volunteer fire departments are good examples of the _ provision of _.

Correct Answer
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Which example is considered a nonexcludable good?

Correct Answer
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A common resource is a good or service for which exclusion is _ and that is _ in consumption.

Correct Answer
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Which good is MOST likely a common resource?

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_____ are a good that is rival in consumption and nonexcludable.

Correct Answer
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For a good to be efficiently provided by the private market,it must be:

Correct Answer
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Fish in a public lake are common resources because the private market _ prevent consumption by people who do not pay for access to fish.Further,the same fish _ be consumed more than once.

Correct Answer
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For a nonexcludable good like national defense,the private market will lead to _____ of the good.

Correct Answer
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For a public good,the marginal social benefit will be higher than any individual's marginal benefit of consumption.

Correct Answer
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Which example best illustrates a good whose consumption is NOT excludable?

Correct Answer
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Use the following to answer question: Figure: Market Failure -(Figure: Market Failure) Use Figure: Market Failure.In the figure,the equilibrium price is _,and the equilibrium quantity is _ for a competitive market.

Correct Answer
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Clean water in a river is nonexcludable because:

Correct Answer
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Exam 17: Public Goods and Common Resources

In a market economy,goods that are nonrival in consumption are subject to inefficiently low production.

Correct AnswerverifiedShow Answer

If a good has a marginal cost of production of zero and an inefficiently low level of consumption,the good must be a(n) :

Correct AnswerverifiedShow Answer

Common resources tend to be _____ in private markets.

Correct AnswerverifiedShow Answer

Every few months,public radio announces a call for pledge support.During this time,it asks listeners to contribute to their local public radio station.Although they raise money during this time,it often falls short of the amount they wish to raise because:

Correct AnswerverifiedShow Answer

Which example is considered an artificially scarce good?

Correct AnswerverifiedShow Answer

The best example of a good whose consumption is NOT excludable is:

Correct AnswerverifiedShow Answer

Volunteer fire departments are good examples of the _____ provision of _____.

Correct AnswerverifiedShow Answer

Which example is considered a nonexcludable good?

Correct AnswerverifiedShow Answer

A common resource is a good or service for which exclusion is _____ and that is _____ in consumption.

Correct AnswerverifiedShow Answer

Which good is MOST likely a common resource?

Correct AnswerverifiedShow Answer

_____ are a good that is rival in consumption and nonexcludable.

Correct AnswerverifiedShow Answer

For a good to be efficiently provided by the private market,it must be:

Correct AnswerverifiedShow Answer

Fish in a public lake are common resources because the private market _____ prevent consumption by people who do not pay for access to fish.Further,the same fish _____ be consumed more than once.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a nonexcludable good like national defense,the private market will lead to _____ of the good.

Correct AnswerverifiedShow Answer

For a public good,the marginal social benefit will be higher than any individual's marginal benefit of consumption.

Correct AnswerverifiedShow Answer

Which example best illustrates a good whose consumption is NOT excludable?

Correct AnswerverifiedShow Answer

Use the following to answer question: Figure: Market Failure -(Figure: Market Failure) Use Figure: Market Failure.In the figure,the equilibrium price is _____,and the equilibrium quantity is _____ for a competitive market.

Correct AnswerverifiedShow Answer

Clean water in a river is nonexcludable because:

Correct AnswerverifiedShow Answer

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Volunteer fire departments are good examples of the _ provision of _.

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A common resource is a good or service for which exclusion is _ and that is _ in consumption.

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Fish in a public lake are common resources because the private market _ prevent consumption by people who do not pay for access to fish.Further,the same fish _ be consumed more than once.

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Use the following to answer question: Figure: Market Failure -(Figure: Market Failure) Use Figure: Market Failure.In the figure,the equilibrium price is _,and the equilibrium quantity is _ for a competitive market.

Correct Answer
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Correct Answer
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