AREC Quiz 12

The following data show the relationship between the number of drivers who leave for work at 8:00 am, their average commute time, and their marginal benefit on commuting. If commuters view highway use as having a price of zero, then one can predict that ______ drivers will leave for downtown at 8:00 am.

500

The following data show the relationship between the number of drivers who leave for work at 8:00 am, their average commute time, and their marginal benefit on commuting. One way for the government to increase economic efficiency would be for it to:

Charge a toll to use the highway during rush hour.

If a good is nonrival, then:

Consumption of the good by one person does not diminish its availability to others

Early settlers in the town Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town. (An aquifer is an underground body of water). As more people settled in Dry Gulch, the aquifer level fell and new wells had to be drilled deeper at higher cost. The residence of Dry Gulch will overuse water relative to the social optimum because _______.

Each resident will fail to adequately consider the external cost of his or her own water use

The tragedy of the commons refers to the:

Overuse of resources that have no price

The following data show the relationship between the number of drivers who leave for work at 8:00 am, their average commute time, and their marginal benefit on commuting. If there is no charge to use the highway, then one would expect that _____ than socially optimal number of drivers will leave at 8:00am because

More; each driver's use of the highway imposes an external cost on other drivers by increasing the commute time.

The essential cause of the tragedy of the commons is the fact that

One person's use of a commonly held resource imposes an external cost on others

Since the cost of using more of any resource is _______, viewing any resource's price as zero leads to ______

Positive; overutilization

A good or service that is highly nonrival and highly nonexcludable is a(n) ______ good

Pure public

If a good can be consumed by one person without reducing its availability to others, then it is a ______ good

nonrival