ECO-2050 HW Assignment 12, Chapter 11

7. Which of the following statements about the free-rider problem is (are) correct? (x) A free-rider is a person who receives the benefit of a good but avoids paying for it. (y) The free-rider problem is worse if the number of beneficiaries is large. (z) The free rider problem can exist for any good that is nonexcludable. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only

A. (x), (y) and (z) (x) A free-rider is a person who receives the benefit of a good but avoids paying for it. (y) The free-rider problem is worse if the number of beneficiaries is large. (z) The free rider problem can exist for any good that is nonexcludable.

10. According to the textbook, which of the following statements about common resources is (are) correct? (x) Congested non-toll roads are common resources because they are rivalrous and non excludable. (y) The Tragedy of the Commons occurs because common resources are rivalrous in consumption. (z) The pollution of water and air can be viewed as an example of a common resource problem because both air and water are rivalrous and non excludable. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only

A. (x), (y) and (z) (x) Congested non-toll roads are common resources because they are rivalrous and non excludable. (y) The Tragedy of the Commons occurs because common resources are rivalrous in consumption. (z) The pollution of water and air can be viewed as an example of a common resource problem because both air and water are rivalrous and non excludable.

3. Which of the following statements is (are) correct? (x) Both public goods and common resources are nonexcludable but common resources are rivalrous inconsumption and public goods are nonrivalrous in consumption. (y) Both club goods and private goods are excludable but private goods are rivalrous in consumption and club goods are non rivalrous in consumption.(z) A congested public park is a common resource because it is rivalous and non excludable and cable television is a club good because cable television is usually non rivalous and excludable. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (y) only

A. (x), (y) and (z) x) Both public goods and common resources are nonexcludable but common resources are rivalrous inconsumption and public goods are nonrivalrous in consumption. (y) Both club goods and private goods are excludable but private goods are rivalrous in consumption and club goods are non rivalrous in consumption.(z) A congested public park is a common resource because it is rivalous and non excludable and cable television is a club good because cable television is usually non rivalous and excludable.

1. When a good is nonrivalrous in consumption, it means that (x) one person's use of the good does not diminishes another person's ability to use it. (y) more than one person can use the good at the same time. (z) no one will be excluded from obtaining the good. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (x) only

B. (x) and (y) only (x) one person's use of the good does not diminishes another person's ability to use it. (y) more than one person can use the good at the same time.

4. Under which of the following scenarios would a park be considered a public good? A. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use. B. Visitors can enter the park free of charge and there are always plenty of empty picnic tables. C. Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. D. Vistors to the park must pay an admittance fee and frequently all of the picnic tables are in use. E. None of the above

B. Visitors can enter the park free of charge and there are always plenty of empty picnic tables.

2. Which of the following statements is (are) correct? (x) A good is characterized as excludable if it is not prohibitively costly to prevent people from using it (y) If one person's use of a good diminishes another person's enjoyment of it, the good is excludable inconsumption. (z) A sandwich would be considered a private good because it is excludable and rivalrous. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only

C. (x) and (z) only (x) A good is characterized as excludable if it is not prohibitively costly to prevent people from using it (z) A sandwich would be considered a private good because it is excludable and rivalrous.

8. Market failure associated with the free-rider problem (x) is a result of benefits that accrue to those who don't pay. (y) is a result of a problem associated with any good that is nonrivalrous in consumption. (z) occurs because it is impossible to prevent any single person from enjoying the benefit of a good when the good is non excludable A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only

C. (x) and (z) only (x) is a result of benefits that accrue to those who don't pay. (z) occurs because it is impossible to prevent any single person from enjoying the benefit of a good when the good is non excludable

5. If the local government in the small community of Sparkle, North Carolina decides to put on a public fireworksdisplay, the display would probably be A. nonexcludable. B. nonrivalrous in consumption C. a public good. D. All of the above. E. A and B, only

D. All of the above.

6. How can private stations afford to broadcast radio or television signals when, by putting up an antenna, no one can be excluded from receiving the signal while paying the station nothing? A. Because the good is also non rivalrous in consumption, one person's consumption does not reduce anyone else's consumption. B. Because the good is also nonexcludable, one person's consumption does not reduce anyone else' sconsumption. C. Because they all receive subsidies from the Federal Communication Commission (FCC) D. Because the station is seeking your attention, which is an excludable good. E. Because the station is selling commercial air time, which is an excludable good

E. Because the station is selling commercial air time, which is an excludable good

9. Which of the following is an example of the free-rider problem? A. Wendy purchases a burger at a fast-food restaurant and gets a second burger free because the restaurant is having a "buy one, get one free" sale. B. Boris receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next-door neighbor, Natasha, is not eligible for the free lunch. C. Both George and Martha receive low-cost dental care at a dental clinic, so neither of them pays the full cost of the care. D. Thomas sends money to the local public radio station whenever the station asks for donations because he believes that he will feel overwhelming guilt if he does not send money to the wonderful folks at the station that he listens to on a regular basis. E. Betty owns Buddy, a large and active dog who barks whenever anyone walks near her house. Barney lives next to Betty, and Buddy can be seen and his barking can be heard whenever anyone walks near his house, too. Thus, Barney receives free protection from burglars because of Buddy's barking.

E. Betty owns Buddy, a large and active dog who barks whenever anyone walks near her house. Barney lives next to Betty, and Buddy can be seen and his barking can be heard whenever anyone walks near his house, too. Thus, Barney receives free protection from burglars because of Buddy's barking.