Quiz 8: Public Gds, Common Resources

Using the term "spillover" is a less formal means of describing

an externality

Which of the following could be classified as a common resource?

an open community-owned pasture used by villagers

Common resources differ from public goods in that

common resources are rival in consumption while public goods are not

For economists, market failure describes a situation in which a market _________ in a way that balances social costs and benefits.

fails to allocate resources efficiently

An individual who wants others to pay for public goods but plans to use those goods for their own purposes, is often referred to as a _____________________.

free rider

When it is costly or impossible to exclude someone who hasn't paid to use a particular good from using it, then that good is classified as being

nonexcludable

A public good is a good that is _____________________, and thus is difficult for market producers to sell to individual consumers.

nonexcludable and nonrivalrous

When one person uses a good while others are also able to use that good, we say that the good is

nonrival

Cathy can take either of two separate roads to drive to work. The first is a lightly used new toll road that is rarely congested. The second road is a local road with no tolls, but it is often congested and has many potholes. In this instance, the toll road is

nonrivalrous and excludable

If the maintenance fees for a lighthouse are paid in full each year by charging port fees, then the lighthouse is

nonrivalrous and nonexcludable

When it comes to public goods, the primary role of the government is typically to

provide the goods

Private goods can be considered

rival in consumption and excludable

There is a skating rink in your city that is open to anybody to use at any time. They even provide skates for people who don't own any. This is an example of a good that is

rivalrous and nonexcludable

Property rights are

the legal rights of ownership

If large numbers of individuals choose to behave as free riders,

the public good may never be provided

When considering most goods in most markets we would likely observe that

they are private goods

Which of the following would most likely be the role of the government with respect to a common resource?

to prevent the overuse of the resource