Econ 201 Ch. 19

(Table: Types of Goods) Refer to the table. Which of the following statements is TRUE?

Section 3 includes cable TV

People have little incentive to produce a public good because:

of the free rider problem.

The tragedy of commons refers to the:

overuse of a rival but non-excludable good.

A forced rider is someone who:

pays a share of the costs of public good but who does not enjoy the benefits.

A free rider is a person who:

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

A tragedy of the commons often results from _____ and ______.

rivalry; non-excludability

An example of a common resource would be:

the environment.

Compared to private goods, the free market would _______ public goods.

under-produce

In which of the case below is there the potential for a free-rider problem?

voluntary payments for a smog reduction program

Both public goods and common resources are:

non-excludable

Solving a tragedy of the commons problem could be done through: I. establishment of property rights over the common resource. II. the invisible hand. III. government-armed protection

I and III only

(Table: Types of Goods) Refer to the table. Which of the following statements is TRUE?

I, II, III, and IV

Which of the following is a list of common resources only?

a public beach, soup kitchen meals, public roads

Which of the following solutions allows for an efficient allocation of a public good?

advertising

A person _____ be cheaply prevented from using national defense, a(n) ______ good.

cannot; non-excludable

The tragedy of commons is more likely to apply to:

forests, fish, elephants