econ chapter 10: public goods and common resources

If a good is excludable, it could be

a private good or a club good

If a good is rival in consumption, it could be

a private good or a common resource

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 for the government to require riders to wear helmets if human life is valued at

$500,000 or more

Refer to the table. Consider the island of Moreau, which has four families, the Washington family, the Xavier family, the Yollo family, and the Zed family. The island does not currently have any playground equipment, and the families are considering the idea of contributing to a pool of money that will be used to buy up to 4 pieces of equipment. The table above shows each family's willingness to pay for each piece of playground equipment. Suppose the cost of a piece of playground equipment is $1000. How many pieces of playground equipment should be bought to maximize the total surplus of the four families?

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Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in

Box D, which represents public goods.

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?

It is efficient for the government to tax the residents $2,000 each and repair the road.

Which of the following is an example of the Tragedy of the Commons?

Unrestricted, unmetered street parking in a city where it is difficult to find a parking spot.

Under which of the following scenarios would a park be considered a common resource?

Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

A city street is

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

A private good is

both rival in consumption and excludable

Which of the following pairs of goods includes a good that is excludable and not rival in consumption as well as a good that is not excludable and not rival in consumption?

cable TV, national defense

A good that is nonrival in consumption and excludable is a ...

club good

A good that is rival in consumption and nonexcludable is a ...

common resource

A negative externality affects market efficiency in a manner similar to

common resource

What type of good: A cabana on the beach that is open to the public

common resource

What type of good: A rowing machine in a fitness room that is open to the public

common resource

What type of good: A parking spot along a residential street that is open to the public

common resource - In this case, a parking spot along a residential street that is open to the public is rival in consumption because two people cannot use the spot at the same time. However, it is nonexcludable since anyone is free to use the street.

The Tragedy of the Commons is a parable that illustrates why

common resources are overconsumed

rival

consumption of the good by one person decreases the ability of other people to consume the good

Nonrival

consumption of the good by one person does not decrease the ability of other people to consume the good

A positive externality affects market efficiency in a manner similar to a

public good

What type of good: A large, beautiful greenspace in a city center

public good

What type of good: A large, beautiful mural in a town plaza

public good

Private goods and club goods are similar because they are both ____________, but they are different because ____________________.

excludable; private goods are rival and club goods are not

what is an example of a common resource

fish in the ocean

A person who regularly watches public television but fails to contribute to public television's fund-raising drives is known as

free rider

what is an example of a club good

gym membership

Advocates of antipoverty programs believe that fighting poverty

is an example of a free-rider problem

non-excludable

it is not possible to prevent an individual from using the good

Which of the following is an example of a club good?

mobile phone service

Which of the following is an example of a public good?

national defense

Which of the following is an example of a common resource?

national park

A public good is

neither rival in consumption nor excludable

A mathematical theorem can be used by anyone without diminishing its use by someone else. For this reason, we say that a mathematical theorem is

not rival in consumption

A club good is

not rival in consumption but excludable.

A congested toll road is

private good

A good that is rival in consumption and excludable is a....

private good

Free riding is least likely to occur with which type of good?

private good

What type of good: A certified pre-owned fully-autonomous vehicle that you use to drive your roommates to class

private good

What type of good: A new drone that you take turns flying with your friends

private good

A textbook is a

private good and the knowledge that one gains from reading the book is a public good.

What type of good: A new synthesizer that you purchase in order to jam with your friends. Why?

private good, - In this case, your new synthesizer is rival in consumption because two people cannot play it at the same time. It is also excludable because you, as the owner, can prevent anyone else from using it. The fact that you choose to play the synthesizer with your friends does not affect your synthesizer's classification as a private good.

A good that is both nonrival in consumption and nonexcludable is a ...

public good

What type of good: A large, beautiful sculpture in a town plaza. Describe why?

public good - In this case, looking at the sculpture does not diminish anyone else's ability to do the same, so the sculpture is nonrival in consumption. It is also nonexcludable because, given its location in a public space, it's impossible to prevent a person from looking at it.

A free rider is a person who

recieves the benefit of a good but avoids paying for it

When governments employ cost-benefit analysis to help them decide whether to provide a public good, measuring benefits is difficult because

respondents to questionnaires have little incentive to tell the truth

If one person's consumption of a good diminishes other people's use of the good, the good is said to be

rival in consumption

A common resource is

rival in consumption but not excludable.

When markets fail to allocate resources efficiently, the ultimate source of the problem is usually

that property rights have not been well established

The overuse of a common resource relative to its economically efficient use is called...

the Tragedy of the Commons.

Public goods are difficult for a private market to provide due to

the free-rider problem

Excludable

those who are unwilling or unable to pay for the good do not obtain its benefits

A university offers a free shuttle that becomes uncomfortably crowded at lunch time. The shuttle is an example of...

tragedy of the commons (Feedback: The crowded shuttle is nonexcludable, because it's free, but rival in consumption, as when an additional passenger steps on, the shuttle becomes more uncomfortable for everyone. In other words, the shuttle is a common resource that has become overused, which means that the Tragedy of the Commons has occurred.)