Econ 1-B Chapter 19 Final Review
New Zealand's individual transfer quotas: I. work by limiting the amount of fish that each individual fisherman can fish. II. resulted in reduced fish catches after they were established. III. work just like the tradable pollution allowances in the United States.
I and III only
Voting and other democratic procedures: I. provide information about an individual's preferences for public goods. II. result in an efficient allocation of resources. III. result in the government underproducing public goods, just like the market would.
I only
Solving a tragedy of the commons problem could be done through: I. societal expectations. II. tradable allowances. III. government command and control methods.
I, II, and III
Which of the following explains why it is difficult to determine the optimal quantity of public goods that the government should produce?
It is difficult to assess exactly how much each individual values a public good.
Suppose that a firm plans to provide defense against asteroids striking the earth. Which of the following is TRUE?
Most people will not pay a firm for asteroid defense.
Why have systems similar to New Zealand's "individual transfer quota" system NOT been able to protect all animal life that is in danger of being overexploited?
Property rights are difficult to establish in animals that migrate over borders.
Tuna fish are being driven to extinction because of overfishing. If all the fishermen know about this, why don't they fish less to slow down the extinction?
There is a lack of well-defined property rights over the stock of tuna fish in the sea
Which of the following is a list of nonexcludable and rival goods only?
a public beach, soup kitchen meals, public roads
Suppose your city has had an increase in crime and the city government decides that more police are needed to patrol at night. Which of the following funding solutions avoids the free-rider problem involved with additional police officers?
an increase in the city's sales tax
Ocean tuna is an example of a:
common resource.
Goods that are not excludable include both:
common resources and public goods.
When entrepreneurs use advertising to pay for the provision of a public good, the outcome is typically:
efficient because the market price is zero and hence equal to the marginal cost of providing the public good.
Private goods can be provided by competitive markets because they are:
excludable, providing an incentive to pay for and thus to produce these goods.
A college student who must pay fees toward a recreational facility that will be built after he has graduated and moved away is a:
forced rider.
Markets tend to be inefficient when it comes to public goods because:
free riders lead to an underproduction of the good.
If markets underproduce public goods because of the free rider problem,
it may be more efficient for the government to tax individuals to pay for the production of the public good.
The tragedy of the commons applies especially strongly to resources like fish, forests, and agricultural land because these resources
must be carefully maintained to remain useful.
Which of the following is a list of public goods only?
national defense, a lighthouse, smog reduction
The tragedy of the commons is often the result of:
nonexcludability and rivalry.
Public goods are those goods that are:
nonrival and nonexcludable.
Mosquito control is an example of a good that:
people still get to enjoy even without paying for it, that is a nonexcludable good.
Hamburgers are an example of a:
private good.
Uncongested, nontoll roads are a good example of a:
public good.
For some public goods, such as Internet search engines, which are nonrival but potentially excludable, it is more profitable for the providers to:
sell advertising and provide its services for free.
If you're camping with a few friends, which of the following is a public good?
the campfire
