ECON CH. 11 multiple choice

Which of the following is an example of a common resource? A.)a national park B.)a fireworks display C.)national defense D.)iron ore

A.)a national park

A congested toll rod is A.)a private good B.)a public good C.)a common resource D.)a club good

A.)a private good

A private good is A.)both rival in consumption and excludable B.)neither rival in consumption nor excludable C.)rival in consumption bt not excludable D.)not rival in consumption but excludable

A.)both rival in consumption and excludable

A free rider is a person who A.)receives the benefit of a good but avoids paying for it B.)produces a good but fails to receive payment for the good C.)pays for a good but fails to receive any benefit from the good D.)fails to produce goods but is allowed to consumed goods

A.)receives the benefit of a good but avoids paying for it

A public good A.)both rival in consumption and excludable B.)neither rival in consumption nor excludable C.)rival in consumption bt not excludable D.)not rival in consumption but excludable

B.)neither rival in consumption nor excludable

A positive externality affects market efficiency in a manner similar to a A.)private good B.)public good C.)common resource D.)rival good

B.)public good

When governments employ cost-benefit analysis to help them decide whether to provide a public good, measuring benefits is difficult because A.)one can never place a value on human life or the environment B.)respondents to questionnaires have like incentive to tell the truth C.)there are no benefits to the public because a public good is not excludable D.)there benefits are infinite because public goods is not rival in consumption and infinite amount of people can consume it at the same time

B.)respondents to questionnaires have like incentive to tell the truth

Suppose each of 20 neighbors on a street values street repairs at $3,000. The cost of the street repair is $40,000. Which of the following statements is true? A.)It is not efficient to have the street repaired B.)It is efficient for each neighbor to pay $3000 to repair the section of street in front of his home C.)It is efficient for the government to tax the residents $2000 each and repair the road D.)Non of the above is true

C.)It is efficient for the government to tax the residents $2000 each and repair the road

A negative externality affects market efficiency in a manner similar to A.)a private good B.)a public good C.)a common resource D.)an excludable good

C.)a common resource

A person who regularly watches public television but fails to contribute to public television's fund-raising drives is known as A.)a common resource B.)a costly rider C.)a free rider D.)an unwelcome rider E.)excess baggage

C.)a free rider

The Tragedy of the Commons is a parable that illustrates why A.)public goods are underproduced B.)private goods are under consumed C.)common resources are over consumed D.)club goods are over consumed

C.)common resources are over consumed

If one person's consumption of a good diminishes other people's use of the good, the good is said to be A.)a common resource B.)a club good C.)rival in consumption D.)excludable

C.)rival in consumption

A common resource is A.)both rival in consumption and excludable B.)neither rival in consumption nor excludable C.)rival in consumption but not excludable D.)not rival in consumption but excludable

C.)rival in consumption but not excludable

When markets fail to allocate resources efficiently, the ultimate source of the problem is usually A.)that prices are not high enough so people over consume B.)that prices are not low enough so firm over produce C.)that property rights have no been well established D.)government regulation

C.)that property rights have no been well established

Which of the following are potential solution to the problem of air pollution? A.)auction off pollution permits B.)grant rights of the clean air to citizens so the firms must purchase the right to pollute C.)regulate the amount of pollutants that firms can put in the air D.)all of the above

D.)all of the above

If a person can be prevented from using a good, the good is said to be A.)a common resource B.)a public good C.)rivaling consumption D.)excludable

D.)excludable

Which of the following is a example of a public good? A.)whales in the ocean B.)apples on a tree in a public park C.)hot dogs at a picnic D.)national defense

D.)national defense

A club good is A.)both rival in consumption and excludable B.)neither rival in consumption nor excludable C.)rival in consumption bt not excludable D.)not rival in consumption but excludable

D.)not rival in consumption but excludable

Public goods are difficult for a private market to provide due to A.)the public good problem B.)the rival ness problem C.)the Tragedy of the Commons D.)the free rider problem

D.)the free rider problem

Suppose that requiring motorcycle riders to wear helmets reduces the probability of a motorcycle fatality from 0.3 percent to 0.2 percent over the lifetime of a motorcycle rider and that the cost of. a lifetime supply of helmets is $500. It is efficient of the government to require riders to wear helmets if human life is valued at A.)$100 or more B.)$150 or more C.)$500 or more D.)$50,000 or more E.)$500,000 or more

E.)$500,000 or more