Question 1

Which of the following is an example of government intervention to solve a Tragedy of the Commons problem?
A)subsidizing basic research
B)building lighthouses
C)toll charges on congested roads
D)cost-benefit analysis

Accepted Answer

Toll charges on congested roads can be used to solve the Tragedy of the Commons problem by way of reducing traffic congestion and incentivizing people to carpool or use public transportation. This is a common example of government intervention to address the overuse of a commonly shared resource. Subsidizing basic research and cost-benefit analysis are not specifically related to solving a Tragedy of the Commons problem, and building lighthouses may have been a solution in the past but is no longer relevant to addressing the issue.

Question 2

A neighborhood voted to develop a vacant lot into a vegetable garden. All of the neighbors worked the land and sowed the seeds. A few neighbors picked and ate the produce before the other neighbors had a chance. Which of the following could solve this example of the Tragedy of the Commons?
A)The neighborhood divides the lot into equal size plots and each family can plant and harvest only on their plot.
B)The neighborhood continues to work the land and sow the seeds as a group, but sells all of the produce to willing buyers and reinvests the proceeds into the garden for the next year.
C)The neighborhood decides to stop gardening on this land because there is no equitable way to allocate the produce.
D)Both a and b are possible solutions to this example of the Tragedy of the Commons

Accepted Answer

Option A provides a solution by allocating individual plots to each family, ensuring that they are responsible for their own produce and that they cannot consume the produce of the others. Option B suggested that the entire neighborhood still works together but instead sells the produce, which not only prevents a few individuals from consuming it all, but also generates profits that they can reinvest for the benefit of the community. Therefore, both options A and B can solve the Tragedy of the Commons.

Question 3

Which of the following is an example of the Tragedy of the Commons?
A)The number of professional football teams increases to the point where the quality of the games decreases, as does television viewership.
B)The number of satellites increases to the point where they begin running into each other.
C)Disney World becomes so crowded that it institutes a lottery for admissions.
D)A tiger breeding program becomes so successful that local zoos have to build additional exhibits so that visitors can view the cats.

Accepted Answer

The Tragedy of the Commons refers to a situation where individuals, acting in their self-interest, consume a shared resource to the point that it becomes depleted or ruined for everyone. In this case, the increasing number of satellites is consuming the space in the atmosphere to the point where they are starting to collide, which illustrates the concept of the Tragedy of the Commons. None of the other options reflect this concept as closely.

Question 4

Four friends decide to meet at a Chinese restaurant for dinner. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. A Tragedy of the Commons problem is likely for each of the following reasons except
A)each person has an incentive to eat as fast as possible since their individual rate of consumption will not affect their individual cost.
B)there is an externality associated with eating the food on the table.
C)when one person eats, he may not take into account how his choice affects his friends.
D)each dish would be both excludable and rival in consumption.

Accepted Answer

The tragedy of the commons typically arises when a good is non-excludable (meaning people cannot be prevented from accessing it) and rival in consumption (meaning one person's use of the good diminishes its availability to others). In this scenario, the dishes that the friends are sharing would be excludable (since they ordered specific items off the menu) and rivalrous in consumption (since eating the food decreases the amount available to others). Therefore, D is not a reason for a tragedy of the commons problem to arise. A, B, and C all describe potential incentives for individuals to over-consume the shared resource, which could lead to a tragedy of the commons.

Question 5

The degradation of the environment from litter is a
A)a negative externality.
B)free rider problem.
C)Tragedy of the Commons.
D)Both a and c are correct.

Accepted Answer

The degradation of the environment from litter is a negative externality because it imposes costs on society that are not reflected in the private cost of littering. It is also a Tragedy of the Commons because individuals have no incentive not to litter since the cost of littering is spread among all members of society.

Question 6

The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full, the Sunday Service is
A)a private good.
B)a public good.
C)a club good.
D)a common resource.

Accepted Answer

The answer of The sign on a church in your...

Question 7

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that
A)over time, the aquifer is likely to be overused.
B)each farmer has a sufficient incentive to conserve the water.
C)state governments have an incentive to insure that their farmers do not overuse the water.
D)resources would be used more efficiently if the government paid for the pumps farmers use to get the water.

Accepted Answer

The fact that any farmer can pump water out of the aquifer without regulation means that it is likely to be overused over time, leading to depletion and other problems like land subsidence.

Question 8

Which of the following statements is not correct?
A)A free rider is a person who benefits from something for which he or she does not have to pay.
B)The creation of general knowledge is a public good.
C)The Tragedy of the Commons illustrates the underuse of a common resource.
D)A gasoline tax is an imperfect solution to the problem of traffic congestion on public roads.

Accepted Answer

The Tragedy of the Commons illustrates the overuse of a common resource, not the underuse. This occurs when individuals exploit a shared resource, leading to depletion or degradation of the resource over time.

Question 9

A tax on gasoline often reduces road congestion because gasoline
A)and driving are complements.
B)and driving are substitutes.
C)is a normal good, while driving is an inferior good.
D)is an inferior good, while driving is a normal good.

Accepted Answer

A tax on gasoline increases the cost of driving, which reduces the quantity of gasoline demanded and thus reduces driving, as they are complementary goods.

Question 10

The town of Isle is on a small island connected to Big City by a single bridge. Most of the residents of Isle work in Big City. As a result, the bridge becomes very congested for 2 hours each day at the typical morning and evening commute times. Which of the following policies considered by the mayor of Isle would likely be most effective in alleviating the congestion?
A)A fixed toll for the bridge payable by every vehicle crossing the bridge at all days and times.
B)A variable toll for the bridge payable only by vehicles crossing the bridge during the congested commute times.
C)Any vehicle crossing the bridge at any time must have a sticker paid for with a one-time fee of $25.
D)A press conference in which the mayor requests that people try to cross the bridge earlier or later than the typical commute times.

Accepted Answer

Option A would not be very effective in reducing congestion as there would be no incentive for people to change their commuting times. Option C would be unfair for people who only rarely need to cross the bridge, and may not significantly reduce congestion. Option D is a passive option that relies on people voluntarily changing their behavior, which may not be effective. Option B would incentivize people to avoid the congested periods by charging a higher toll during those times. This could help spread out the traffic and reduce congestion during peak periods.

Question 11

Which of the following is correct regarding road tolls as a way to reduce traffic?
A)They can vary based on the amount of traffic that is present.
B)They reduce drivers' explicit cost of driving but increase drivers' implicit cost.
C)Some drivers can be made better off, but some drivers will inevitably made worse off.
D)They are the solution to the free rider problem that occurs on roads.

Accepted Answer

The answer of Which of the following is correct regarding...

Question 12

A New York legislator wanted to create a deposit on cigarettes butts. If implemented, people would have the incentive to (1) not toss cigarette butts onto public streets and sidewalks, and (2) pick butts up to redeem them for the cash. The degradation of the environment from littered cigarette butts is a
A)private goods problem.
B)Nash equilibrium.
C)Tragedy of the Commons.
D)cost-benefit equilibrium.

Accepted Answer

The degradation of the environment from littered cigarette butts is a classic example of the Tragedy of the Commons, where a shared resource is overused and depleted due to individuals' self-interested behavior. In this case, people dispose of cigarette butts on public streets and sidewalks without considering the negative impact it has on the environment. A deposit on cigarette butts would create the incentive to reduce this behavior and promote responsible disposal of the waste.

Question 13

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. Which of the following statements about the aquifer is correct?
A)The aquifer is a public good which must be publicly owned to be used efficiently.
B)The aquifer is a private good which must be privately owned to be used efficiently.
C)The aquifer is a common resource which will be overused if no one owns it.
D)The aquifer is a club good which should be left as it is.

Accepted Answer

The Ogallala aquifer is a common resource, meaning it is owned by no one in particular and can be accessed by anyone. As a result, there is a risk of overuse and depletion of the resource, which is why some form of regulation is needed to ensure its sustainability.

Question 14

What causes the Tragedy of the Commons? (i)
Social and private incentives differ.
(ii)
Common resources are not rival in consumption and are not excludable.(iii)
Common resources are not excludable but are rival in consumption.
A)(i) only
B)(ii) only
C)(i) and (ii) only
D)(i) and (iii) only

Accepted Answer

The Tragedy of the Commons occurs because common resources are not excludable but are rival in consumption, leading to overuse. Additionally, social and private incentives differ, causing individuals to act in their own interest rather than the common good.

Question 15

A toll on a congested road is in essence
A)an interstate highway tax.
B)a Department of Motor Vehicles tax.
C)a gasoline tax.
D)a corrective tax.

Accepted Answer

A toll on a congested road is a form of corrective tax, also known as a congestion charge. It aims to discourage drivers from using the road during peak hours, reducing traffic congestion and improving air quality. It is not an interstate highway tax, a DMV tax, or a gasoline tax.

Question 16

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?
A)reduced travel time during peak hours
B)reduced need for public transportation
C)improved environmental quality
D)improved valuation of a common resource

Accepted Answer

Congestion charges are meant to reduce the number of cars on busy streets, so reducing the need for public transportation is not an advantage of congestion charges. The other options (A, C, D) are advantages, including reduced travel time, improved environmental quality, and a more accurate valuation of a common resource (the road).

Question 17

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to
A)drive at times other than rush hour.
B)use public transit rather than driving.
C)drive more fuel-efficient cars.
D)car-pool.

Accepted Answer

Charging a toll during rush hour does not directly incentivize the use of more fuel-efficient cars; it primarily encourages changes in travel time, mode of transport, or carpooling to reduce congestion.

Question 18

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district?
A)Washington, D.C.
B)Sydney
C)Tokyo
D)London

Accepted Answer

London currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district.

Question 19

The Tragedy of the Commons describes
A)government regulation that is necessary to combat externalities.
B)overuse of a common resource relative to its economically efficient use.
C)the nonrivalry feature of a common resource.
D)an effective cost-benefit analysis.

Accepted Answer

The Tragedy of the Commons refers to the overuse of a common resource beyond its economically efficient use, resulting in depletion or degradation of the resource. This happens when individuals, in pursuit of their self-interest, use the resource without considering the impact of their actions on the resource and other users. Government regulation can be a solution, but the core problem is the overuse of the resource. Nonrivalry and effective cost-benefit analysis are not directly related to the Tragedy of the Commons.

Question 20

On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. An overcrowded picnic area is an example of
A)a private good.
B)a club good.
C)a Tragedy of the Commons.
D)public good.

Accepted Answer

An overcrowded picnic area is an example of the Tragedy of the Commons. The Tragedy of the Commons occurs when a shared resource (in this case, the picnic area) is overused to the point where it becomes depleted or unusable. This is a common problem with public goods and resources that are available to everyone, as there is little incentive for individuals to limit their use and preserve the resource for others.

Quiz 11: Public Goods and Common Resources

Which of the following is an example of government intervention to solve a Tragedy of the Commons problem?

A neighborhood voted to develop a vacant lot into a vegetable garden. All of the neighbors worked the land and sowed the seeds. A few neighbors picked and ate the produce before the other neighbors had a chance. Which of the following could solve this example of the Tragedy of the Commons?

Which of the following is an example of the Tragedy of the Commons?

The degradation of the environment from litter is a

The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full, the Sunday Service is

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

Which of the following statements is not correct?

A tax on gasoline often reduces road congestion because gasoline

Which of the following is correct regarding road tolls as a way to reduce traffic?

The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. Which of the following statements about the aquifer is correct?

What causes the Tragedy of the Commons? (i) Social and private incentives differ. (ii) Common resources are not rival in consumption and are not excludable.(iii) Common resources are not excludable but are rival in consumption.

A toll on a congested road is in essence

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?

A toll collected from each car traveling during rush hour on a congested road is an effective correction to the Tragedy of the Commons for all of the following reasons except the toll provides an incentive for commuters to

Which city currently charges drivers a "congestion toll" to drive into the heart of the city's financial, legal, and entertainment district?

The Tragedy of the Commons describes

On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. An overcrowded picnic area is an example of