Microeconomics Chapter 11

Some goods can be either common resources or public goods depending on

whether the good is rival in consumption.

Refer to Figure 11-1. Which of the following statements is correct?

A congested nontoll road is an example of the type of good represented by Box C.

Which of the following is not a way for the government to solve the problem of excessive use of common resources?

turning the common resource into a public good

Without government intervention, public goods tend to be

underproduced and common resources tend to be overconsumed.

Refer to Table 11-1. Suppose the cost to build the park is $24 per acre and that the residents have agreed to split the cost of building the park equally. To maximize his own surplus, how many acres would Cedric like Springfield to build?

0 acres

Refer to Table 11-1. Suppose the cost to build the park is $24 per acre. How many acres should the park be to maximize total surplus from the park in Springfield?

3 acres

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

All of the above are correct.

Which of the following goods is nonrival in consumption and excludable?

Disney World on a rainy, cool day

Under which of the following scenarios would a park be considered a public good?

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

Which of the following statements is not correct?

When African elephants were privatized, the survival of the species deteriorated.

On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. An overcrowded picnic area is an example of

a Tragedy of the Commons.

Four roommates share an off-campus house and equally share the cost of rent. Everyone says that she values a clean house, yet the house is usually dirty. To an economist, a clean house in this case represents

a common resource problem.

A city street is

a common resource when it is congested, but it is a public good when it is not congested.

A toll on a congested road is in essence

a corrective tax.

Which of the following would be considered a private good?

a swimming suit

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is

both rival in consumption and excludable.

Goods that are not rival in consumption include both

club goods and public goods.

Pay-per-view broadcasts are

club goods.

Goods that are not excludable include both

common resources and public goods.

Neither public goods nor common resources are

excludable, but only public goods are not rival in consumption.

Goods that are not excludable are usually

free of charge.

Private decisions about consumption of common resources and production of public goods usually lead to an

inefficient allocation of resources and external effects.

Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. Because the cost to build the swimming pool is only $1,000,000, Manager Miller arranges to have the pool built. Everyone in town enjoys the pool, but when Manager Miller asks for donations to pay for the pool, he only collects $250,000. Manager Miller soon realizes that

most residents of the town are probably free-riders at the pool.

Which of the following goods is the best example of a public good?

music that is broadcast over the airwaves by a privately-owned FM radio station

If a road is congested, then use of that road by an additional person would lead to a

negative externality.

A view of a spectacular sunset along a private beach is an example of a

nonrival but excludable good.

The U.S. military defends Jacob from foreign attackers. The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it. For this reason, we say that national defense is

not rival in consumption.

Refer to Table 11-4. Suppose the cost to plant each tree is $380 and the 4 homeowners have agreed to split all tree-planting costs equally. Which homeowner(s) would be opposed to planting any trees?

only Davis

The provision of public goods gives rise to

positive externalities, whereas the use of common resources gives rise to negative externalities.

Goods that are excludable include both

private goods and club goods.

A streetlight is a

public good.

The U.S. government protects fish, a common resource, by

selling fishing licenses and regulating fish lengths.

The Tragedy of the Commons occurs because

social and private incentives differ.

Which of the following is not a typical solution to the "Tragedy of the Commons?"

turning the common resource into a club good