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On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would k efficient for such a display to be produced. Which of the following statements is correct? The lack of a fireworks display in Yankeeville arises because of an externality. The lack of a fireworks display in Yankeeville is a case of market failure. In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient. All of the above are correct.

All of the above are correct.

A Virginia State road 5 pm Christmas Eve is an example of: • Public good • Private good • Common Resource • Club good.

Common Resource

Who among the following is a free rider? Ernie listens to National Public Radio, but does not contribute to any fundraising efforts. Bert takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day. Grover sends his 5 children to a private school rather than to the public school in his neighborhood. Oscar goes to Elmo's house to watch a football game on the local television channel.

Ernie listens to National Public Radio, but does not contribute to any fundraising efforts

Which of the following statements is true of the tax on gasoline? The cost of collecting a gasoline tax outweighs the revenues raised by the tax. It is preferred to tolls as the best solution to road congestion. It discourages driving on noncongested roads, even though there is no congestion externality for these roads.

It discourages driving on noncongested roads, even though there is no congestion externality for these roads

Which of the following statements is correct? The efficient provision of private goods is intrinsically more difficult than the efficient provision of public goods The efficient provision of public goods is intrinsically more difficult than the efficient provision of private goods. Private markets provide quantities of public goods that exceed the socially-efficient quantities of those goods. Private decision makers utilize quantities of

The efficient provision of public goods is intrinsically more difficult than the efficient provision of private goods

What do clean air in New York City and elephants in Africa have in common? • They are both common resources. • They are both public goods. • They are both club goods • Both are excludable

They are both common resources.

On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. Suppose that the Minnesota State Park Service institutes a variable fee structure. On weekdays when the picnic areas get little use, the fee is zero. On normal weekends, the fee is $8 per perso On holiday weekends, the fee is $14 per person. The fee system corrects a problem known as the • Coase theorem. • free rider problem. Tragedy of the Commons. O public goods problem.

Tragedy of the Commons.

A city street is always a public good, whether or not it is congested. a public good when it is congested, but it is a common resource when it is not congested. a common resource when it is congested, but it is a public good when it is not congested. always a common resource, whether or not it is congested.

a common resource when it is congested, but it is a public good when it is not congested

Because elephants roam freely in many countries in Africa, each individual African elephant poacher has a strong incentive to kill as many elephants as he can find. a strong incentive to protect the elephants. • the ability to save the elephants. • None of the above is correct.

a strong incentive to kill as many elephants as he can find

Resources tend to be allocated inefficiently when goods • are private goods. are rival in consumption and excludable. are available free of charge. are available only at very high prices.

are available free of charge.

Governments can improve market outcomes for • public goods but not common resources. • common resources but not public goods. • both public goods and common resources. • neither public goods nor common resources.

both public goods and common resources.

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is • both rival in consumption and excludable. • neither rival in consumption nor excludable. • excludable, but not rival in consumption. O rival in consumption, but not excludable.

both rival in consumption and excludable.

Which of the following would not be considered a private good? • a pair of scissors • a pair of shoes • an SUV • cable TV service

cable TV service

The Mansfield Public Library has a large number of books that anyone with a library card may borrow. Anyone can obtain a card for free. Because the number of copies of each book is limited, not everyone can have the same book at the same tim What type of good would the library books be classified as in this case? • private goods • club goods • common resources O public goods

common resources

A pizza is • excludable and rival in consumption • excludable and nonrival in consumption. • nonexcludable and rival in consumption. • nonexcludable and nonrival in consumption.

excludable and rival in consumption

The failure of markets to adequately protect the environment can viewed either as a problem of externalities or as a problem of common resources. • externalities or as a problem of private goods. the overprovision of public goods or as a problem of the underprovision of private goods. club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity.

externalities or as a problem of common resources.

Imagine a 2,000-acre park with picnic benches, trees and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking, and the trash cans overflow with food wrappers on summer afternoons. Otherwise, it is a great place. The park is a common resource because • people can be prevented from using it. • access is limited due to driving distances. if too many people use it, one person's use diminishes other peoples' use. anyone can use it without affecting anyone else.

if too many people use it, one person's use diminishes other peoples' use

The U.S. patent system • makes general knowledge excludable. • makes specific, technical knowledge excludable. • creates a disincentive to invent. • Both a and b are correct.

makes specific, technical knowledge excludable.

Which of the following is not a common resource? • clean air • clean water open grazing land national defense

national defense

A television broadcast is an example of a good that is • private. • not rival in consumption. • social. • normal.

not rival in consumption.

The Tragedy of the Commons describes government regulation that is necessary to combat externalities. overuse of a common resource relative to its economically efficient use. • the nonrivalry feature of a common resource. • an effective cost-benefit analysis.

overuse of a common resource relative to its economically efficient use.

When a good is excludable, one person's use of the good diminishes another person's ability to use it. • people can be prevented from using the good. no more than one person can use the good at the same time. • everyone will be excluded from using the good.

people can be prevented from using the good.

Goods that are excludable include both • club goods and public goods. public goods and common resources. • common resources and private goods. private goods and club goods.

private goods and club goods.

A tornado siren is a • private good. O club good. • common resource. • public good.

public good.