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Exam 11: Public Goods and Common Resources

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Question 171

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Without government intervention, public goods tend to be

A) overproduced and common resources tend to be overconsumed.
B) overproduced and common resources tend to be underconsumed.
C) underproduced and common resources tend to be overconsumed.
D) underproduced and common resources tend to be underconsumed.

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Question 172

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The provision of public goods gives rise to

A) positive externalities, as does the use of common resources.
B) positive externalities, whereas the use of common resources gives rise to negative externalities.
C) negative externalities, whereas the use of common resources gives rise to positive externalities.
D) negative externalities, as does the use of common resources.

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Question 173

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Nontoll roads can be either public goods or common resources, depending upon the degree of congestion.

The free-rider problem arises when the number of beneficiaries is large and exclusion of any of them is impossible.

Pay-per-view broadcasts are

Some goods can be classified as either public goods or private goods depending on the circumstances.

Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. -Refer to Table 11-2. Suppose the cost to install each streetlight is $900. How many streetlights should the town install to maximize total surplus from the streetlights?

Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near- extinction of the wild rhinoceros. What do these problems have in common?

A cable television broadcast of a movie is

Fire protection is a

Which of the following goods is both excludable and rival in consumption?

If people can be prevented from using a certain good, then that good is called

It would always be a mistake to view

What do we mean when we say that a good is rival in consumption?

Which of the following is a disadvantage of government provision of a public good?

Scenario 11-1 Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late. -Refer to Scenario 11-1. Due to traffic, Becky expects to be 20 minutes late to pick up her children. How much would she be willing to pay for a variable toll road that would get her to the daycare center on time?

Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances.

Each of the following would be considered a common resource except a

If Dave and Jesse are the only two fishermen in town and neither is bothered by the other's fishing, the lake they fish in is not a common resource.

The Occupational Safety and Health Administration OSHA) has determined that 100 workers are exposed to a hazardous chemical used in the production of diet soft drinks. The cost of imposing a regulation that would ban the chemical is $10 million. OSHA has calculated that each person saved by this regulation has a value equal to $10 million. If the benefits are exactly equal to the costs, what probability is OSHA using to assess the likelihood of a fatality from exposure to this chemical?