Quiz 8: Public Gds, Common Resources
Using the term "spillover" is a less formal means of describing
an externality
Which of the following could be classified as a common resource?
an open community-owned pasture used by villagers
Common resources differ from public goods in that
common resources are rival in consumption while public goods are not
For economists, market failure describes a situation in which a market _________ in a way that balances social costs and benefits.
fails to allocate resources efficiently
An individual who wants others to pay for public goods but plans to use those goods for their own purposes, is often referred to as a _____________________.
free rider
When it is costly or impossible to exclude someone who hasn't paid to use a particular good from using it, then that good is classified as being
nonexcludable
A public good is a good that is _____________________, and thus is difficult for market producers to sell to individual consumers.
nonexcludable and nonrivalrous
When one person uses a good while others are also able to use that good, we say that the good is
nonrival
Cathy can take either of two separate roads to drive to work. The first is a lightly used new toll road that is rarely congested. The second road is a local road with no tolls, but it is often congested and has many potholes. In this instance, the toll road is
nonrivalrous and excludable
If the maintenance fees for a lighthouse are paid in full each year by charging port fees, then the lighthouse is
nonrivalrous and nonexcludable
When it comes to public goods, the primary role of the government is typically to
provide the goods
Private goods can be considered
rival in consumption and excludable
There is a skating rink in your city that is open to anybody to use at any time. They even provide skates for people who don't own any. This is an example of a good that is
rivalrous and nonexcludable
Property rights are
the legal rights of ownership
If large numbers of individuals choose to behave as free riders,
the public good may never be provided
When considering most goods in most markets we would likely observe that
they are private goods
Which of the following would most likely be the role of the government with respect to a common resource?
to prevent the overuse of the resource