Question 1

When what people pay does not necessarily reflect the real value they put on a good,it is likely that:

Accepted Answer

A)  the free rider problem exists.
B)  the good will be undersupplied.
C)  the good is not easily excludable.
D)  All of these statements are true.E) B) and C)
F) None of the above D

Question 2

Nonexcludable goods tend to be undersupplied because:

Accepted Answer

A)  the free rider problem persists.
B)  people do not pay the true value of the good.
C)  people rarely willingly pay for something they could get for free,regardless of how much they value it.
D)  All of these statements are true.E) None of the above
F) A) and C)

Question 3

When a good is not easily excludable,what people pay for it will:

Accepted Answer

A)  not necessarily reflect the real value they place on it.
B)  reflect the real value they place on it.
C)  exactly equal the social benefit of the good.
D)  All of these statements are true.E) A) and B)
F) B) and D)

Question 4

A government ban on a good that suffers from overconsumption may be ineffective if:

Accepted Answer

A)  the likelihood of being caught breaking the ban is very low.
B)  the likelihood of being caught breaking the ban is sufficiently high.
C)  the punishment for breaking the ban is severe.
D)  the public did not participate in setting the punishments.E) A) and D)
F) B) and C)

Question 5

When the government bans a good:

Accepted Answer

A)  it is attempting to solve the nonexcludability problem.
B)  it makes acquiring that good illegal.
C)  the cost of breaking the ban changes the trade-offs consumers face.
D)  All of these statements are true.E) B) and C)
F) C) and D)

Question 6

When we consider solving a free rider problem through changing social norms,it is helpful to remember:

Accepted Answer

A)  all costs aren't financial.
B)  social disapproval can be considered a cost.
C)  conflict with those in your community can be considered a cost.
D)  All of these statements are true.E) B) and D)
F) A) and B)

Question 7

An example of a public good that the government has made excludable is:

Accepted Answer

A)  city buses.
B)  sewer systems.
C)  police protection.
D)  All of these are excludable public goods.E) B) and C)
F) A) and B)

Question 8

When the government bans a good:

Accepted Answer

A)  the cost of breaking the ban needs to be sufficiently high in order to be effective.
B)  it changes the trade-offs consumers face.
C)  it will only be effective if it can be easily enforced.
D)  All of these statements are true.E) A) and D)
F) B) and C)

Question 9

Most goods are:

Accepted Answer

A)  rival in consumption.
B)  exclusive.
C)  public goods.
D)  None of these statements is true.E) A) and B)
F) A) and C)

Question 10

The similarity between markets for common resources and markets with externalities is that:

Accepted Answer

A)  the price that competitive firms charge does not capture the true costs and benefits of consumption.
B)  the equilibrium quantity is too high in terms of society.
C)  government involvement is needed to reach an efficient outcome.
D)  All of these statements are true.E) C) and D)
F) A) and B)

Question 11

Fireworks would be considered:

Accepted Answer

A)  a common resource.
B)  a private good.
C)  a public good.
D)  an artificially scarce good.E) None of the above
F) B) and C) C

Question 12

When faced with a market failure,the government:

Accepted Answer

A)  usually tries to redistribute the existing surplus more fairly.
B)  always takes over the market.
C)  often encourages the well-functioning firms to stay through protectionist policy.
D)  None of these statements is true.E) B) and C)
F) None of the above

Question 13

Streaming Netflix movies would be considered:

Accepted Answer

A)  a common resource.
B)  a private good.
C)  a public good.
D)  an artificially scarce good.E) B) and C)
F) A) and C)

Question 14

An example of a public good that is difficult to make excludable is:

Accepted Answer

A)  toll roads.
B)  city buses.
C)  state universities.
D)  None of these is a nonexcludable public good.E) A) and D)
F) B) and D)

Question 15

An example of a good that is not excludable is:

Accepted Answer

A)  fish in the ocean.
B)  wireless connection to the Internet.
C)  a movie in a theater.
D)  None of these is excludable.E) A) and B)
F) All of the above

Question 16

Using tradable allowances instead of quotas may be a better solution to the provision of common resources because:

Accepted Answer

A)  tradable allowances allocate the good in the most efficient way,and quotas do not.
B)  tradable allowances ensure that the resource is allocated to those with the highest willingness to pay,while quotas do not.
C)  tradable allowances assign private property rights-and an incentive,as owners,to make sure that the common resource does not get overused,and quotas do not.
D)  All of these statements are true.E) C) and D)
F) A) and D) D

Question 17

When a good is excludable:

Accepted Answer

A)  it is possible for sellers to prevent its use by those who have not paid for it.
B)  one person's consumption prevents or decreases others' ability to consume it.
C)  consumers have a perception of scarcity of that good.
D)  the government has specific import policies limiting its supply.E) A) and B)
F) B) and C)

Question 18

When a good ends up overconsumed and depleted,we can assume it is:

Accepted Answer

A)  a common resource.
B)  a private good.
C)  a public good.
D)  an artificially scarce good.E) B) and D)
F) C) and D)

Question 19

If the punishment associated with breaking a ban is not severe enough,it may:

Accepted Answer

A)  not alter the trade-offs enough to change the consumption patterns of the banned good.
B)  cause even more consumption of the good,exaggerating the problem.
C)  still decrease the consumption of the good if the price of the good changes.
D)  still be effective if it gains media attention.E) C) and D)
F) A) and B)

Question 20

When the free rider problem is present in a market:

Accepted Answer

A)  what people pay often does not reflect the real value they put on a good.
B)  the good will likely be overconsumed.
C)  the good is rival in consumption.
D)  All of these statements are true.E) None of the above
F) A) and C)

Exam 19: Public Goods and Common Resources

When what people pay does not necessarily reflect the real value they put on a good,it is likely that:

Correct AnswerverifiedD

Nonexcludable goods tend to be undersupplied because:

Correct AnswerverifiedShow Answer

When a good is not easily excludable,what people pay for it will:

Correct AnswerverifiedShow Answer

A government ban on a good that suffers from overconsumption may be ineffective if:

Correct AnswerverifiedShow Answer

When the government bans a good:

Correct AnswerverifiedShow Answer

When we consider solving a free rider problem through changing social norms,it is helpful to remember:

Correct AnswerverifiedShow Answer

An example of a public good that the government has made excludable is:

Correct AnswerverifiedShow Answer

When the government bans a good:

Correct AnswerverifiedShow Answer

Most goods are:

Correct AnswerverifiedShow Answer

The similarity between markets for common resources and markets with externalities is that:

Correct AnswerverifiedShow Answer

Fireworks would be considered:

Correct AnswerverifiedC

When faced with a market failure,the government:

Correct AnswerverifiedShow Answer

Streaming Netflix movies would be considered:

Correct AnswerverifiedShow Answer

An example of a public good that is difficult to make excludable is:

Correct AnswerverifiedShow Answer

An example of a good that is not excludable is:

Correct AnswerverifiedShow Answer

Using tradable allowances instead of quotas may be a better solution to the provision of common resources because:

Correct AnswerverifiedD

When a good is excludable:

Correct AnswerverifiedShow Answer

When a good ends up overconsumed and depleted,we can assume it is:

Correct AnswerverifiedShow Answer

If the punishment associated with breaking a ban is not severe enough,it may:

Correct AnswerverifiedShow Answer

When the free rider problem is present in a market:

Correct AnswerverifiedShow Answer

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified