Chapter 11 Econ quizzes

a. receives the benefit of a good but avoids paying for it

A free rider is a person who a. receives the benefit of a good but avoids paying for it. b. can produce a good at no cost c. will only purchase a product on sale d. rides public transit regularly

b. it is possible for a retired or disabled person to have no value to society

When the value of a human life is calculated according to the economic contribution a person makes to society (as reflected in her income-earnings potential), the troubling implication is that a. economists are more valuable than entrepreneurs. b. it is possible for a retired or disabled person to have no value to society c. all workers have equal value. d. retired people who volunteer in their communities are more valuable than physicians.

d. 2

A small strip mall contains four retail stores, and crime has recently been on the increase in the neighborhood of the strip mall. The owners of the four stores -- Stores A,B, C, and D -- are considering contributing to a pool of money that will be used to hire up to 4 security guards. The table represents their willingness to pay, that is, the maximum amount that each store owner is willing to contribute, per day, to hire each security guard. Refer to Table 11-5. Suppose the cost to hire each individual guard is $100 per day. How many guards should be hired to maximize the total surplus of the four stores owners? a. 3 b. 4 c. 1 d. 2

a. private good and the knowledge that one gains from reading the book is a public good

A textbook is a a. private good and the knowledge that one gains from reading the book is a public good b. common resource and the knowledge that one gains from reading the book is a public good c. private good and the knowledge that one gains from reading the book is a common resource d. common resource and the knowledge that one gains from reading the book is a private good

a. benefits are hard to measure

As with many public goods, determining the appropriate level of government support for the production of general knowledge is difficult because a. benefits are hard to measure b. members of Congress are often experts in the sciences c. the costs always exceed the benefits d. patents correct for an unknown portion of the externality

b. common resource

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a a. club good b. common resource c. private good d. public good

d. 4 streetlights

Consider a small town with only three families, the Johnson family, the Marshall family, and the Walker family. The town does not currently have an streetlights so it is very dark at night. The three families are considering putting in street lights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. Refere to Table 11-2. Suppose the cost to install each streetlight is $180 and the families have agreed to spilt the cost of the streetlights to install basing their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the greatest number of streetlights for which the majority of families would vote "yes?" a. 2 streetlights b. 3 streetlights c. 1 streetlight d. 4 streetlights

c. 4 streetlights

Consider a small town with only three families, the Johnson family, the Marshall family, and the Walker family. The town does not currently have an streetlights so it is very dark at night. The three families are considering putting in street lights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. Refer to Table 11- 2. Suppose the cost to install each streetlight is $180. How many streetlights should the town install to maximize total surplus from the streetlights? a. 3 streetlights b. 1 streetlight c. 4 streetlights d. 2 streetlights

b. they are all the result of a failure to establish clear property rights over something of value

Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near-extinction of the wild rhinoceros. What do these problems have in common? a. They would all go away if the government sponsored an intensive public-information campaign. b. they are all the result of a failure to establish clear property rights over something of value c. They are all the result of a failure of corrective taxes. d. Private markets could easily solve them if governments left the markets alone.

b. evaluate the risks people are willing to take and what they wold have to be paid to take them

Economists think that the best way to determine the value of a human life it to a. evaluate the value of a person's expected earnings in the labor market b. evaluate the risks people are willing to take and what they would have to be paid to take them c. determine a person's accumulated wealth at the time of death d. do nothing; human life is priceless

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

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 a. anyone can use it without affecting anyone else b. if too many people use it, one persons use diminishes other peoples use c. people can be prevented from using it. d. access is limited due to driving distances.

c. excludability of the good

In deciding whether a good is a public good, one must determine the a. incomes of those who benefit from the good. b. value of the external benefits that accrue to resource owners. c. excludability of the good d. all of the above are correct

b. cable TV as a common resource

It would always be a mistake to view a. a congested road as a common resource b. cable Tv as a common resource c. a tornado siren as a public good d. a mathematical theorem as a public good

a. private good

Labor is a a. private good b. common resource c. public good d. club good

b. Cows are privately owned, whereas many endangered species are owned by no one

Many species of animal are common resources, and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species even though there is such a high demand for beef? a. there is a natural ecological balance between the birth rate of cows and human consumption b. Cows are privately owned, whereas many endangered species are owned by no one. c. Public policies protect cows from predators and diseases. d. Cows reproduce at a high rate and have adapted well to their environment.

d. a private good and the deer he hunts are common resources

Mitch hunts deer. His shotgun is a. rival in consumption and the deer he hunts are not rival in consumption. b. not rival in consumption and the deer he hunts are not rival in consumption. c. a private good and the deer he hunts are public goods. d. a private good and the deer he hunts are common resources

d. excludable, but only public goods are not rival in consumption

Neither public goods nor common resources are a. rival in consumption, but only common resources are not excludable. b. excludable, but only common resources are not rival in consumption. c. rival in consumption, but only public goods are not excludable. d. excludable, but only public goods are not rival in consumption

d. Tragedy of the Commons

On Holiday weekends thousands of people picnic in state parks Some picnic areas become so overcrowded the befit 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 a little use, the dee is zero. On normal weekends, the fee is $8 per person. On holiday weekends, the fee is $14 per person. The fee system corrects a problem known as the a. public goods problem b. Coase theorem c. free rider problem d. Tragedy of the Commons

Box C, which represents common resources

Refer to Figure 11-1. The more Jane uses good x, the less of that good there is for other people to use. Neither Jane nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in a. Box D, which represents public goods b. Box C, which represents common resources c. Box B, which represents common resources d. Box A, which represents private goods

a. neither rival in consumption nor excludable

Reggie owns 3 acres of beautiful wooded land. When Reggie decides to move to be closer to his grandchildren, he donates the land to the state with the understanding that the land will be used as a state park. This state park is large enough that it is not connected it is an example of a good that is. a. neither rival in consumption nor excludable b. both rival in consumption and excludable c. nontrivial in consumption and excludable d. rival in consumption and non excludable

a. whether the good is rival in consumption

Some goods can be either common resources or public goods depending on a. whether the good is rival in consumption b. whether the good is excludable. c. None of the above is correct. d. the marginal cost of the good.

b. $10 million

Studies that compare the wages of more risky and less risky occupations estimate the value of a human life to be about a. $20 million b. $10 million c. $5 million d. $1 million

b. not rival in consumption

The U.S. military defends Jacob from foreign attackers. The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it. For their reason, we say that nations defense is a. not excludable b. not rival in consumption c. rival in consumption d. excludable

d. to reduce the use of a common resource

The goal of requiring licenses for hunting and fishing is a. to ensure that the people hunting and fishing are qualified. b. to generate revenue for the government. c. to monitor compliance with federal gun laws. d. to reduce the use of the a common resource

b. all of the above are reasons the ocean remains one of the largest unregulated resources

The ocean remains one of the largest unregulated resources for each of the following reasons except a. it is difficult to get international cooperation among countries that hold different values b. all of the above are reasons the ocean remains one of the largest unregulated resources c. the oceans are so vast that enforcing any agreements would be difficult d. many countries have access to the ocean

c. subsidizing sheep flocks

The tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except a. auctioning off sheep-grazing permits b. assigning land property rights c. subsidizing sheep flocks d. taxing sheep flocks

d. overuse of a common resources relative to its economically efficient use

The tragedy of the commons describes a. an effective cost-benefit analysis b. the non rivalry feature of a common resources c. government regulation that is necessary to combat externalities d. overuse of a common resources relative to its economically efficient use

b. all of the above are correct

Variable tolls on roads a. rise when traffic volume increases to ensure the speed on the road is kept high b. all of the above are correct c. are politically unpopular because people do not like the idea of paying for a good that they used to consume without paying for it directly d. are an effective way of correcting the common resource problem on roads

b. "what is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others."

Which of the following quotations illustrates the tragedy of the commons? a. "A bird in the hand is worth two in the bush." b. "what is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." c. "The only difference between the rich and other people is that the rich have more money." d. "Anyone who is not a socialist before he is 30 has no heart; anyone who is still a socialist after he is 30 has no head."

c. underproduced and common resources tend to be overconsumed

Without government intervention, pubic goods tend to be a. underproduced and common resources tend to be under-consumed. b. overproduced and common resources tend to be under-consumed. c. underproduced and common resources tend to be over consumed d. overproduced and common resources tend to be over consumed