Econ chapter 11

C.

A congested side street in your neighborhood is A. excludable and rival in consumption. B. excludable and not rival in consumption. C. not excludable and rival in consumption. D. not excludable and not rival in consumption.

B.

A free rider is a person who A. will only purchase a product on sale. B. receives the benefit of a good but avoids paying for it. C. can produce a good at no cost. D. rides public transit regularly.

D.

A lighthouse is typically considered to be a public good because A. the owner of the lighthouse is able to exclude beneficiaries from enjoying the lighthouse. B. there is rarely another lighthouse nearby to provide competition. C. a nearby port authority cannot avoid paying fees to the lighthouse owner. D. all passing ships are able to enjoy the benefits of the lighthouse without paying.

A.

Even economists who advocate small government agree that A. national defense is a public good and that the government should provide it. B. national defense is a common resource and that the government should provide it. C. national defense is a public good, but many of them believe that it should be provided by private firms rather than by the government. D. national defense is a common resource, but many of them believe that it should be provided by private firms rather than by the government.

D.

Goods that are excludable include both A. club goods and public goods. B. public goods and common resources. C. common resources and private goods. D. private goods and club goods.

C.

Goods that are not excludable include both A. private goods and public goods. B. club goods and common resources. C. common resources and public goods. D. private goods and club goods.

B.

Goods that are not rival in consumption include both A. private goods and common resources. B. club goods and public goods. C. common resources and public goods. D. private goods and club goods.

B.

Goods that are rival in consumption but not excludable would be considered A. club goods. B. common resources. C. public goods. D. private goods.

A.

If a road is congested, then use of that road by an additional person would lead to a A. negative externality. B. positive externality. C. Pigovian externality. D. free-rider problem with rush hour drivers stuck in traffic.

D.

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? A. The lack of a fireworks display in Yankeeville arises because of an externality. B. The lack of a fireworks display in Yankeeville is a case of market failure. C. In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient. D. All of the above are correct.

B.

The provision of public goods gives rise to A. no externalities. B. positive externalities. C. negative externalities. D. rivalries in consumption.

A.

Under which of the following scenarios would a park be considered a club good? A. Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. B. Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. C. Visitors can enter the park free of charge and there are always plenty of empty picnic tables. D. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

C.

Under which of the following scenarios would a park be considered a public good? A. Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. B. Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. C. Visitors can enter the park free of charge and there are always plenty of empty picnic tables. D. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

B.

When a good is excludable, A. one person's use of the good diminishes another person's ability to use it. B. people can be prevented from using the good. C. no more than one person can use the good at the same time. D. everyone will be excluded from using the good.

A.

Who among the following is a free rider? A. Ernie listens to National Public Radio, but does not contribute to any fundraising efforts. B. Bert takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day. C. Grover sends his 5 children to a private school rather than to the public school in his neighborhood. D. Oscar goes to Elmo's house to watch a football game on the local television channel.