ECON chapter 19

The tragedy of commons is more likely to apply to:

-forests, fish, and elephants.

Both public goods and common resources are:

-non-excludable

Solving a tragedy of the commons problem could be done through: I. establishment of property rights over the common resource. II. the invisible hand. III. government-armed protection.

-I and III only

Table: Types of Goods Excludable Nonexcludable Rival 1 2 Nonrival 3 4 Reference: Ref 19-1 (Table: Types of Goods) Refer to the table. Which of the following statements is TRUE? I. Section 1 may contain fruit, chicken, and underwear. II. Section 2 may contain fish in the ocean, public roads, and public hunting grounds. III. Section 3 may contain Wi-Fi, cable TV, and digital music. IV. Section 4 may contain asteroid deflection, national defense, and radio.

-I, II, III, and IV

Table: Types of Goods Excludable Nonexcludable Rival 1 2 Nonrival 3 4 Reference: Ref 19-1 (Table: Types of Goods) Refer to the table. Which of the following statements is TRUE?

-Section 3 includes cable TV.

Which of the following is a list of common resources only?

-a public beach, soup kitchen meals, public roads

Which of the following solutions allows for an efficient allocation of a public good?

-advertising

A person ________ be cheaply prevented from using national defense, a(n) ________ good.

-cannot; nonexcludable

Private goods can be provided by competitive markets because they are:

-excludable, providing an incentive to pay for and thus to produce these goods.

Nonrival private goods are likely to have ________ fixed costs and ________ marginal costs.

-large; small

People have little incentive to produce a public good because:

-of the free rider problem.

The tragedy of the commons refers to the:

-overuse of a rival but nonexcludable good.

A forced rider is someone who:

-pays a share of the costs of a public good but who does not enjoy the benefits.

A free rider is a person who:

-receives the benefits of a good but avoids paying for it.

A tragedy of the commons often results from ______ and ______.

-rivalry; nonexcludability

An example of a common resource would be:

-the environment.

Compared to private goods, the free market would ________ public goods.

-underproduce

In which of the case below is there the potential for a free-rider problem?

-voluntary payments for a smog reduction program