Ch.11 Public Goods and Common Resources

Why do elephants face the threat of extinction while cows do not?

Cattle are owned by ranchers, while elephants are owned by no one.

A negative externality that can be viewed as a common-resource problem.

Pollution

"What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others." illustates what?

Tragedy of the commons

T or F- Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day.

True

- are politically unpopular because people do not like the idea of paying for a good that they used to consume without paying for it directly. - rise when traffic volume increases to ensure the speed on the road is kept high. - are an effective way of correcting the common resource problem on roads.

Variable tolls on roads

The Tragedy of the Commons can be corrected by

assigning property rights to individuals

a public good is patented, whereas knowledge that is not patented is a ____ ____

club good

Pay-per-view broadcasts are

club goods

The Great Lakes are

common resources

Goods that are rival in consumption include both

common resources and private goods

an approach used by economists to calculate the value of a human life

comparing the wages of more risky occupations to less risky occupations

Goods that are not excludable are usually

free of charge

Most lighthouses are operated by the government because

of the free-rider problem

A good is excludable if

people can be prevented from using it

The provision of public goods gives rise to

positive externalities

For most goods in an economy, the primary signal that guides the decisions of buyers and sellers is

price

Most goods in the economy are

private goods

What are the types of goods that are rival in consumption?

private goods and common resources

A free rider is a person who

receives the benefit of a good but avoids paying for it

The old lyric "the best things in life are free"

refers to goods provided by nature or the government.

Without government intervention, public goods tend to be

underproduced and common resources tend to be over consumed