Deck 17: Public Goods Common Resources

Question 1

Which of the following goods is most likely a public good?

A) the Internet
B) a city park
C) a pair of pants
D) fire protection

Answer 1

D

Question 2

Which of the following goods best fits the characteristics of a private good?

A) national defense
B) clean water
C) a pizza
D) police protection

Answer 2

C

Question 3

A public good is a good or service for which exclusion is _____ and which is _____ in consumption.

A) possible; rival
B) possible; nonrival
C) not possible; rival
D) not possible; nonrival

Answer 3

D

Question 4

The best example of a private good is:

A) an automobile.
B) public education.
C) national defense.
D) law enforcement.

Question 5

Which of the following goods BEST fits the characteristics of a private good?

A) a professor giving a lecture in a large classroom
B) an ice-cream cone
C) fire protection
D) disease prevention

Question 6

Which of the following is an example of a nonexcludable good?

A) health care
B) national defense
C) education
D) ice cream

Question 7

A(n) _____ is nonexcludable and nonrival in consumption.

A) private good
B) artificially scarce good
C) public good
D) common resource

Question 8

Which of the following goods is most likely a common resource?

A) the Super Bowl
B) a public park
C) a pair of pants
D) the fire department

Question 9

Which of the following goods is most likely an artificially scarce good?

A) tickets to a boxing match
B) pay-per-view of a boxing match
C) health care
D) the police department

Question 10

Clean water in a river is nonexcludable because:

A) it is not possible to prevent consumption by people who do not pay for it.
B) more than one person can consume the same unit of the good at the same time.
C) individuals ignore the effect their use has on the amount of the resource remaining for others.
D) consumption is inefficiently low.

Question 11

A private good is _____ in consumption.

A) excludable and rival
B) nonexcludable and nonrival
C) excludable and nonrival
D) nonexcludable and rival

Question 12

The best example of a public good is:

A) a court of law.
B) clothing.
C) food.
D) a state university.

Question 13

A good is most likely to be artificially scarce if:

A) it is nonexcludable and nonrival.
B) the seller is a monopolist.
C) it is nonexcludable but rival.
D) it is excludable but nonrival.

Question 14

A common resource is a good or service for which exclusion is _____ and which is _____ in consumption.

A) possible; rival
B) possible; nonrival
C) not possible; rival
D) not possible; nonrival

Question 15

A(n) _____ is excludable and rival in consumption.

A) private good
B) artificially scarce good
C) public good
D) common resource

Question 16

Television programs are nonrival because:

A) the supplier cannot prevent consumption by people who do not pay for it.
B) more than one person can consume the same unit of the good at the same time.
C) individuals ignore the effect of their use on the amount of the resource remaining for others.
D) the market suffers from inefficiently low consumption.

Question 17

When Joe watched a television movie, his viewing was _____ in consumption because other people _____ able to view the movie at the same time Joe did.

A) nonrival; were
B) rival; were
C) rival; were not
D) nonrival; were not

Question 18

Whether or not they pay for them, people cannot be excluded from receiving the benefits of:

A) private goods.
B) public goods.
C) common resources.
D) either public goods or common resources.

Question 19

An artificially scarce good is a good or service for which exclusion is _____ and which is _____ in consumption.

A) possible; rival
B) possible; nonrival
C) not possible; rival
D) not possible; nonrival

Question 20

A private good is a good or service for which exclusion is _____ and which is _____ in consumption.

A) possible; rival
B) possible; nonrival
C) not possible; rival
D) not possible; nonrival

Question 21

An electronic book is an artificially scarce good because the private market _____ prevent consumption by people who do not pay for it. Further, the same e-book _____ be consumed by more than one person at the same time.

A) can; can
B) cannot; cannot
C) can; cannot
D) cannot; can

Question 22

National defense and e-books are similar in that both are _____, but they differ in that national defense is _____, while e-books are not.

A) rival in consumption; excludable
B) nonrival in consumption; nonexcludable
C) excludable; rival in consumption
D) nonexcludable; nonrival in consumption

Question 23

The best example of a public good is:

A) legal services.
B) national defense.
C) a municipal library.
D) cable television programming.

Question 24

The best example of an artificially scarce good is:

A) legal services.
B) national defense.
C) a municipal library.
D) cable television programming.

Question 25

If the market produces an efficient level of a good, then we know that the good must be _____ and _____ in consumption.

A) nonexcludable; nonrival
B) nonexcludable; rival
C) excludable; nonrival
D) excludable; rival

Question 26

Bluefin tuna travel in schools throughout the world's oceans. Fishing boats from many nations harvest bluefin tuna as the schools migrate through their national waters. The schools of bluefin tuna are best described as:

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

Question 27

When comparing the characteristics of common resources and artificially scarce goods, we find that:

A) they are both nonrival in consumption.
B) they are both excludable.
C) common resources are nonrival in consumption (while artificially scarce goods are not), and artificially scarce goods are nonexcludable (while common resources are not).
D) artificially scarce goods are nonrival in consumption (while common resources are not), and common resources are nonexcludable (while artificially scarce goods are not).

Question 28

The best example of a common resource is:

A) public education.
B) a municipal library.
C) clean water.
D) cable television programming.

Question 29

Which of the following is a private good?

A) traffic lights
B) mountain bike trails in a national forest
C) a fast-food cheeseburger
D) cell phone service

Question 30

A whale is a common resource because the private market _____ prevent consumption by people who do not pay for it, and the same whale _____ be consumed more than once.

A) can; can
B) cannot; cannot
C) can; cannot
D) cannot; can

Question 31

Stephanie stops at a gas station to fill up the tank of her car. The unleaded gasoline in her tank is best described as a(n):

A) private good.
B) public good.
C) artificially scarce good.
D) common resource.

Question 32

The best example of a good that is excludable in consumption is:

A) a park.
B) an ocean.
C) a bicycle.
D) national defense.

Question 33

Josh has an iPhone, and he frequently downloads songs from the iTunes website. He pays a small fee for each download, but downloading a song does not remove it from the iTunes inventory. Other consumers can also pay the fee and download a song that Josh might have already accessed. The iTunes service is best described as(n):

A) private good.
B) public good.
C) artificially scarce good.
D) common resource.

Question 34

Wenqin lives in a city that has a huge public rose garden. Residents can stroll through the rose garden, enjoy the scenic vistas, or have a picnic, all without paying a fee. The public rose garden is best described as:

A) rival and excludable.
B) nonrival and excludable.
C) rival and nonexcludable.
D) nonrival and nonexcludable.

Question 35

If a good has a marginal cost of production of zero and an inefficiently low level of consumption, the good must be a(n):

A) private good.
B) public good.
C) common resource.
D) artificially scarce good.

Question 36

Although most citizens have access to police protection, they also take measures, such as putting locks on their doors, to protect themselves. For most citizens police protection is a(n) _____ good, while self-protection is a(n) _____ good.

A) public; private
B) public; artificially scarce good
C) common resource; private
D) artificially scarce good; common resource

Question 37

DeVonda owns a music store. One night, vandals broke her store's front window. DeVonda called the police, and the police investigated the crime. The police services that DeVonda used are best described as a(n):

A) private good.
B) public good.
C) artificially scarce good.
D) common resource.

Question 38

Public goods differ from common resources in that both are _____, but public goods are _____, while common resources are _____.

A) nonrival in consumption; excludable; nonexcludable
B) excludable; nonrival in consumption; rival in consumption
C) nonexcludable; are nonrival in consumption; rival in consumption
D) rival in consumption; nonexcludable; excludable

Question 39

As a big music fan, you want to attend a weekend blues festival in your town. The purchase of a wristband gives you and thousands of other fans access to the outdoor concert pavilion. The blues festival is a good that has the characteristics of being:

A) rival and excludable.
B) nonrival and excludable.
C) rival and nonexcludable.
D) nonrival and nonexcludable.

Question 40

National defense and clean air are similar in that both are _____, but they differ in that national defense is _____, while clean air is not.

A) rival in consumption; excludable
B) nonrival in consumption; excludable
C) excludable; rival in consumption
D) nonexcludable; nonrival in consumption

Question 41

A software program is similar to an apple in that it is _____, but it is also similar to public safety in that it is _____.

A) rival in consumption; nonexcludable
B) nonrival in consumption; excludable
C) excludable; nonrival in consumption
D) nonexcludable; rival in consumption

Question 42

When the allocation of resources is such that a different allocation would increase society's welfare, economists say:

A) market failure has occurred.
B) the efficiency condition is met.
C) decision makers have faced the full marginal benefits and marginal costs of their decisions.
D) producers have maximized total cost.

Question 43

An artificially scarce good is similar to a public good in that it is _____, but it is also similar to a private good in that it is _____.

A) nonrival in consumption; nonexcludable
B) nonrival in consumption; excludable
C) excludable; nonrival in consumption
D) nonexcludable; rival in consumption

Question 44

The free-rider problem is a direct result of:

A) the inability to exclude nonpayers.
B) marginal-cost pricing.
C) full-cost pricing.
D) horizontally summed supply curves.

Question 45

If a good is subject to the free-rider problem and an inefficiently low level of production when left to the private market, the good must be a(n):

A) private good.
B) public good.
C) common resource.
D) artificially scarce good.

Question 46

If left to the private market, the amount of police protection provided in a city would be _____ than it is now, and free riders would pay _____ for police protection.

A) more; more
B) more; nothing
C) less; nothing
D) less; a higher price

Question 47

The tendency of people to avoid paying for a good's benefits when the benefits can be obtained for free is called the _____ problem.

A) free-cost
B) free-rider
C) free-goods
D) free-market

Question 48

If a good is subject to the free-rider problem and an inefficiently high level of consumption, the good must be a(n):

A) private good.
B) public good.
C) common resource.
D) artificially scarce good.

Question 49

The free-rider problem refers to:

A) the situation in the Old West when land was largely unfenced and riders had unfettered access to private range land.
B) qualifications, or riders, that clients do not request, but which lawyers tend to include in contracts anyway.
C) a variation on the phrase "There's no such thing as a free lunch," which is replaced by "There's no such thing as a free ride."
D) lack of incentive for consumers to pay for a nonexcludable good.

Question 50

When the market does NOT result in an efficient allocation of scarce resources, economists say there has been:

A) market dropout.
B) normative economics.
C) market disincentives.
D) market failure.

Question 51

You work in an office and one of your coworkers has announced his retirement. You have offered to purchase the retirement gift, so you place a collection jar in the lunch room for anonymous donations to help pay for the gift. After a week you find very little money in the jar, so you end up paying for a large share of the retirement gift. You are the victim of the _____ problem.

A) common resource
B) private good
C) overuse of a common resource
D) free-rider

Question 52

An e-book is similar to a published book in that it is _____, but it is also similar to national defense in that it is _____.

A) rival in consumption; nonexcludable
B) nonrival in consumption; excludable
C) excludable; nonrival in consumption
D) nonexcludable; rival in consumption

Question 53

For a nonrival good like pay-per-view television programs, the private market will lead to:

A) production of too much of the good.
B) consumption of too much of the good.
C) consumption of too little of the good.
D) outsourcing its production.

Question 54

Most neighborhood streets are illuminated at night by streetlights. The streetlights are _____ and _____. Therefore, they are likely to be _____ by the competitive market.

A) nonrival; nonexcludable; underprovided
B) nonrival; nonexcludable; overprovided
C) rival; excludable; efficiently provided
D) nonrival; excludable; underprovided

Question 55

An inefficient allocation of resources will occur when:

A) decision makers are faced with the full costs and benefits of their actions.
B) there are clearly defined property rights.
C) no alternative would increase the welfare of society.
D) decision makers are not faced with the full benefits and costs of their choices.

Question 56

An individual is MOST likely to be a free rider when a good is:

A) private.
B) nonexcludable.
C) nonrival.
D) artificially scarce.

Question 57

The tendency of people or firms to consume a public good without paying for it is called the _____ problem.

A) free-cost
B) free-rider
C) free-goods
D) free-market

Question 58

For a nonexcludable good like national defense, the private market will lead to _____ of the good.

A) too much production
B) too much consumption
C) too little production
D) the efficient level of consumption

Question 59

A public good is _____ and _____ in consumption.

A) excludable; rival
B) nonexcludable; nonrival
C) excludable; nonrival
D) nonexcludable; rival

Question 60

For a good to be efficiently provided by the private market, it must be:

A) rival in consumption.
B) excludable.
C) a common resource.
D) rival in consumption and excludable.

Question 61

Use the following to answer questions:
(Table: Street Cleanings) Look at the table Street Cleanings. What is the marginal social benefit for Peter and Wendy together when the number of street cleanings per month increases from 4 to 5?

A) $30
B) $60
C) $6
D) $15

Question 62

Use the following to answer questions:
Figure: Traffic Lights in Plymouth
(Figure: Traffic Lights in Plymouth) Look at the figure Traffic Lights in Plymouth. Plymouth has 1,000 residents. Each of the residents has the same individual marginal benefit per traffic light. Without government intervention, the town will have _____ traffic lights.

A) 0
B) 4
C) 8
D) 12

Question 63

Public goods are NOT sold in efficient quantities in the marketplace because:

A) once supplied to a buyer, they can be made available at no cost to someone else.
B) the more one person has, the less another person has.
C) they are usually so costly that only the wealthy can afford them.
D) they are usually very poor quality goods.

Question 64

In the United Kingdom, most public television programming is paid for by a yearly license fee assessed on every household. Television detection vans go through neighborhoods to detect unlicensed households and keep them from viewing without paying. This is a good example of the _____ provision of _____.

A) public; private goods
B) public; goods that are made artificially excludable in consumption
C) public; common resources
D) private; artificially scarce goods

Question 65

A public good is a good:

A) whose consumption is nonexcludable and nonrival.
B) for which the marginal cost of adding another consumer is high.
C) that the market will usually provide efficiently.
D) whose consumption is rival.

Question 66

The best example of a good whose consumption is NOT excludable is:

A) a yard.
B) a house.
C) a bicycle.
D) national defense.

Question 67

Public goods should be produced up to the point at which the marginal cost of production equals:

A) the maximum price any individual is willing to pay for that unit.
B) the sum of the individual marginal benefits from all consumers of that unit.
C) zero, which is the marginal cost of allowing another individual to consume the good.
D) the highest marginal benefit from any individual consumer of the good.

Question 68

Which of the following activities is a public good?

A) going to school
B) voting
C) smoking
D) getting a flu shot

Question 69

Use the following to answer questions:
(Table: Street Cleanings) Look at the table Street Cleanings. Suppose that the marginal cost of each street cleaning is $18. Which statement is TRUE?

A) If the city decided to clean the streets only once per month, Peter would be willing to pay the entire cost of the cleaning.
B) If the city decided to clean the streets only once per month, Wendy would be willing to pay the entire cost of the cleaning.
C) If Wendy and Peter were the only people in society, the efficient number of street cleanings would be one per month.
D) If Wendy and Peter were the only people in society, the efficient number of street cleanings would be at least two per month.

Question 70

For a public good, nonpayers _____ excluded from obtaining the benefits of the good.

A) can be
B) are automatically
C) usually are
D) cannot be

Question 71

Which of the following is the best example of a good whose consumption is NOT excludable?

A) clothing
B) ice cream
C) a taco
D) national defense

Question 72

Use the following to answer questions:
(Table: Street Cleanings) Look at the table Street Cleanings. Increasing the number of street cleanings per month from _____ would yield a marginal social benefit (for Peter and Wendy together) equal to $12.

A) one to two
B) two to three
C) three to four
D) four to five

Question 73

Suppose the town of Falls Valley has a mosquito problem. After a bad summer, the town accountants explain that the marginal cost of providing one more treatment for mosquito control is $100,000. The town should provide the additional mosquito control only if the marginal:

A) benefit for any individual citizen is at least $100,000.
B) benefit for all individual citizens adds up to at least $100,000.
C) social cost of mosquito control is more than $100,000.
D) social cost of mosquito control is less than $100,000.

Question 74

For which of the following goods is the marginal social benefit necessarily greater than the marginal private benefit?

A) public goods
B) common resources
C) artificially scarce goods
D) private goods

Question 75

Use the following to answer questions:
Figure: Traffic Lights in Plymouth
(Figure: Traffic Lights in Plymouth) Look at the figure Traffic Lights in Plymouth. Plymouth has 1,000 residents. Each of the residents has the same individual marginal benefit per traffic light. If the town's population doubles and the new residents share the identical individual marginal benefit of the existing residents, the socially efficient quantity of traffic lights will:

A) stay the same.
B) fall.
C) rise.
D) fall to zero.

Question 76

A key element that a public good displays is:

A) overproduction.
B) rival consumption.
C) payment through charitable contributions.
D) nonexclusion.

Question 77

Which of the following are used to provide public goods? I. voluntary contributions
II) taxes
III) self-interested business firms

A) I only.
B) I and II.
C) II and III.
D) I, II, and III.

Question 78

No individual is willing to pay to provide the efficient level of a public good, since the:

A) marginal cost of production is zero.
B) good will be nonrival and thus underconsumed.
C) individual's marginal benefit is less than the marginal social benefit.
D) marginal benefit of allowing one more individual to consume the good is zero.

Question 79

Since the public safety that a police force provides is _____ in consumption, the efficient price _____.

A) rival; is zero
B) nonrival; is zero
C) rival; equals marginal social benefit
D) nonrival; equals marginal social benefit

Question 80

Volunteer fire departments are good examples of the _____ provision of _____.

A) private; private goods
B) public; common resources
C) private; public goods
D) public; artificially scarce goods