Question 1

When a Clarke tax is used to finance a public good,each person's tax equals

Accepted Answer

The Clarke tax, also known as the Clarke pivot rule, is designed to encourage truthful revelation of preferences for a public good. Each person's tax equals the cost of the public good minus the value that other people claim to receive from it. This mechanism aims to make individuals pay for the externalities their votes impose on others, encouraging them to reveal their true valuation of the public good.

Question 2

Which of the following is excludable but not rivalrous in consumption?

Accepted Answer

The answer of Which of the following is excludable but...

Question 3

Consider the following:

Accepted Answer

The answer of Consider the following:
 ...

Question 4

GA 400 is a state highway that runs through part of Atlanta,GA.In order to travel on one portion of GA 400,drivers are required to pay a toll.It follows that section of GA 400 will exhibit non-rivalry in consumption if

Accepted Answer

Non-rivalry in consumption means that an additional user does not reduce the ability of others to use the good. In this case, the toll payment does not affect the ability of others to use the road, but it does create a barrier to entry. Removing the toll payment would increase the number of users and potentially lead to congestion, which would reduce the benefit of using the road. Therefore, the best choice is B, because it does not depend on the toll payment and indicates that the road is not congested, meaning that users can enjoy the benefits of non-rival consumption without the negative effects of congestion.

Question 5

Cleantown and Grimyville are identical except for the inferior air quality in Grimyville.All potential residents have identical tastes.Apartments in Cleantown rent for $400 per month.The cost of breathing Grimyville air is $75 per month.The quantity of apartments in each town is fixed.

Accepted Answer

The answer of Cleantown and Grimyville are identical except for...

Question 6

Describe how a Clarke tax is designed and explain how it leads a person to correctly reveal his preferences for a public good.

Accepted Answer

The answer of Describe how a Clarke tax is designed...

Question 7

The purpose of a Clarke tax is to

Accepted Answer

The purpose of a Clarke tax is to give people an incentive to truthfully reveal their preferences for a public good. This is achieved by offering a tax refund to individuals who state that they are willing to pay for the public good, and then setting the tax on everyone else based on the highest amount offered. This encourages honest reporting, as individuals who report false values may end up paying more than they otherwise would have.

Question 8

Consider a lake stocked with fish.The total value of fish caught at the lake depends on the number of fishers,as shown in the accompanying table.As the table indicates,1 fisher can catch $36 worth of fish in a day,2 fishers can catch a total of $66 worth of fish,3 fishers can catch a total of $90 worth of fish,and so forth.The fishers are identical,and the opportunity cost of a day at the lake is $18 for each fisher.

Accepted Answer

The answer of Consider a lake stocked with fish.The total...

Question 9

What is one problem with using a Clarke tax to finance government provision of a public good?

Accepted Answer

The problem with using a Clarke tax to finance government provision of a public good is that the revenues collected from the tax may not be sufficient to cover the cost of the public good. This means that the government may have to supplement the revenues collected from the tax with other sources of funding, which could be inefficient or unfair.

Question 10

Which of the following would be the most accurate means for the government to obtain information about the value of irrigation water for farmers to be supplied by the construction of a new dam?

Accepted Answer

The answer of Which of the following would be the...

Question 11

When access to a common property is unrestricted,why does the resulting social gain fail to be as large as possible? How can an entrance fee increase social gain in this situation?

Accepted Answer

The answer of When access to a common property is...

Question 12

Free-riding is a problem associated with

Accepted Answer

The answer of Free-riding is a problem associated with
...

Question 13

Consider the following:

Accepted Answer

The answer of Consider the following:
 ...

Question 14

There are two people in an economy.Person A's demand for a public good is Q = 10 - P and person B's demand is Q = 20 - 2P.The highest total that A and B will be willing to pay for six units of the public good is

Accepted Answer

To find the highest total that A and B will be willing to pay for six units of the public good, we need to find the price each is willing to pay for the sixth unit and sum those amounts. For person A, setting Q = 6 in their demand equation (Q = 10 - P) gives 6 = 10 - P, solving for P gives P = 4. For person B, setting Q = 6 in their demand equation (Q = 20 - 2P) gives 6 = 20 - 2P, solving for P gives P = 7. The total highest amount they are willing to pay for the sixth unit is 4 (from A) + 7 (from B) = $11.

Quiz 14: Common Property and Public Goods

When a Clarke tax is used to finance a public good,each person's tax equals

Which of the following is excludable but not rivalrous in consumption?

Consider the following:

GA 400 is a state highway that runs through part of Atlanta,GA.In order to travel on one portion of GA 400,drivers are required to pay a toll.It follows that section of GA 400 will exhibit non-rivalry in consumption if

Cleantown and Grimyville are identical except for the inferior air quality in Grimyville.All potential residents have identical tastes.Apartments in Cleantown rent for $400 per month.The cost of breathing Grimyville air is $75 per month.The quantity of apartments in each town is fixed.

Describe how a Clarke tax is designed and explain how it leads a person to correctly reveal his preferences for a public good.

The purpose of a Clarke tax is to

What is one problem with using a Clarke tax to finance government provision of a public good?

Which of the following would be the most accurate means for the government to obtain information about the value of irrigation water for farmers to be supplied by the construction of a new dam?

When access to a common property is unrestricted,why does the resulting social gain fail to be as large as possible? How can an entrance fee increase social gain in this situation?

Free-riding is a problem associated with

Consider the following:

There are two people in an economy.Person A's demand for a public good is Q = 10 - P and person B's demand is Q = 20 - 2P.The highest total that A and B will be willing to pay for six units of the public good is