ECON chapter 19
The tragedy of commons is more likely to apply to:
-forests, fish, and elephants.
Both public goods and common resources are:
-non-excludable
Solving a tragedy of the commons problem could be done through: I. establishment of property rights over the common resource. II. the invisible hand. III. government-armed protection.
-I and III only
Table: Types of Goods Excludable Nonexcludable Rival 1 2 Nonrival 3 4 Reference: Ref 19-1 (Table: Types of Goods) Refer to the table. Which of the following statements is TRUE? I. Section 1 may contain fruit, chicken, and underwear. II. Section 2 may contain fish in the ocean, public roads, and public hunting grounds. III. Section 3 may contain Wi-Fi, cable TV, and digital music. IV. Section 4 may contain asteroid deflection, national defense, and radio.
-I, II, III, and IV
Table: Types of Goods Excludable Nonexcludable Rival 1 2 Nonrival 3 4 Reference: Ref 19-1 (Table: Types of Goods) Refer to the table. Which of the following statements is TRUE?
-Section 3 includes cable TV.
Which of the following is a list of common resources only?
-a public beach, soup kitchen meals, public roads
Which of the following solutions allows for an efficient allocation of a public good?
-advertising
A person ________ be cheaply prevented from using national defense, a(n) ________ good.
-cannot; nonexcludable
Private goods can be provided by competitive markets because they are:
-excludable, providing an incentive to pay for and thus to produce these goods.
Nonrival private goods are likely to have ________ fixed costs and ________ marginal costs.
-large; small
People have little incentive to produce a public good because:
-of the free rider problem.
The tragedy of the commons refers to the:
-overuse of a rival but nonexcludable good.
A forced rider is someone who:
-pays a share of the costs of a public good but who does not enjoy the benefits.
A free rider is a person who:
-receives the benefits of a good but avoids paying for it.
A tragedy of the commons often results from ______ and ______.
-rivalry; nonexcludability
An example of a common resource would be:
-the environment.
Compared to private goods, the free market would ________ public goods.
-underproduce
In which of the case below is there the potential for a free-rider problem?
-voluntary payments for a smog reduction program