ECON 1110 Reading Check Chpt 11
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
Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Greene's like the town to install?
3 streetlights
Refer to Figure 11-1. A gym membership at a gym that always has space in classes and on machines is an example of the type of good represented by Box
B.
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 that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?
Estimating the value of a human life is difficult but necessary to evaluate the proposal.
A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it.
False
A regional lobster management board recently proposed a five-year moratorium on lobster fishing in the Atlantic waters south of Cape Cod based on a study of the lobster population. Which of the following statements is not correct?
If left unregulated, the lobster population will likely increase.
Advocates of antipoverty programs claim that fighting poverty is a public good.
True
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.
Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach. Seymour wants an efficient way to prevent overcrowding at the beach, so he should require
an entry fee be charged on summer weekend days when many people tend to visit the beach.
Knowledge that is patented is a
club good, whereas knowledge that is not patented is a public good.
At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a
common resource.
One economically efficient way to eliminate the Tragedy of the Commons is to
establish private ownership of the resource.
A cable television broadcast of a movie is
excludable and not rival in consumption.
If the use of a common resource is not regulated,
it will be overused.
A congested side street in your neighborhood is
not excludable and rival in consumption.
When a good is rival in consumption,
one person's use of the good diminishes another person's ability to use it.
The provision of public goods gives rise to
positive externalities, whereas the use of common resources gives rise to negative externalities.
In a cost-benefit analysis, the value of a human life is sometimes calculated on the basis of
the risks that a person voluntarily exposes herself to in her job and/or recreational choices.
A free rider problem arises when
there are many beneficiaries and exclusion of any one of them is impossible.
