Question 1

One example of private provision of a public good is:
A)everyone paying for free-to-air television through taxes
B)everyone paying for television according to the programs they watch
C)broadcasters showing advertisements during their programs
D)the government requiring households to pay broadcasters a subscription

Accepted Answer

Private broadcasters provide free-to-air television, which is a public good. However, they fund their operations through advertisements, which can be seen as a form of private provision of a public good. This is because while the television is free for the public, the funding for its operation is provided by private businesses. Choices A, B, and D are not examples of private provision of a public good. A is an example of government provision of a public good through taxes, B is an example of a private pay-per-view model, and D is an example of a government-mandated subscription model.

Question 2

What effect would a tax on petrol have?
A)It would have no effect on driving behaviour
B)It would discourage people from driving on congested roads only
C)It would discourage people form driving on uncongested roads only
D)It would discourage people from driving on congested and uncongested roads

Accepted Answer

A tax on petrol would increase the cost of driving, making it less attractive to drivers. This would discourage people from driving both on congested and uncongested roads. As a result, it would lead to a reduction in traffic, resulting in improved road safety and reduced air pollution. However, it may also have a negative impact on the economy as higher transportation costs would increase the cost of goods and services.

Question 3

If it is common knowledge that a given national park has become overused, why might raising the entrance fee to the park NOT solve the problem of overcrowding?
A)no-one would go to the park if the fees were increased
B)additional revenue from the higher fee might not be used for the betterment of the park
C)the lower usage might more than offset the higher entrance fees, resulting in a loss of revenue
D)after they have spent their time and money in travelling to the park, people might not be discouraged from visiting the park by a higher entrance fee

Accepted Answer

Raising the entrance fee might not deter visitors who have already invested time and money in traveling to the park, thus not effectively reducing overcrowding.

Question 4

If all citizens in a certain city were given identical debit cards to pay for their use of toll roads, which of the following statements would be true if the debit cards could be sold privately from person to person?
A)this would be a very egalitarian policy
B)this system would end up being a redistribution of income from those that drive more to those that drive less
C)this system could potentially be a redistribution of income from the rich to the poor if the poor drive less
D)all of the above are true

Accepted Answer

The policy could be seen as egalitarian because everyone starts with the same means to pay for tolls. It could lead to a redistribution of income from those who drive more to those who drive less if people who don't use their cards much sell them to those who need more credit. This could also result in a redistribution from the rich to the poor if the trend holds that the poor drive less and sell their excess credit to wealthier individuals who drive more.

Question 5

Many species of animals are common resources and many must be protected by law to keep them from extinction.Why is the cow not one of these endangered species, even though there is such a high demand for beef?
A)cows reproduce at a high rate and have adapted well to their environment
B)public policies have been implemented to protect cows from predators and diseases
C)cows are privately owned and many endangered species are owned by no-one
D)there is a natural ecological balance between the birth rate of cows and human consumption

Accepted Answer

Cows are privately owned, which provides an economic incentive for their owners to breed and maintain their populations, unlike many endangered species that are not privately owned and lack such incentives.

Question 6

An easy solution to the problem of excessive fishing is prevented because:
(i) many countries have access to the oceans so any solution would require international cooperation
(ii) fishing rights are only assigned by the UN and the process to obtain them is very long
(iii) the oceans are very vast and it is thus very difficult to enforce an agreement
A)(i)
B)(i) and (ii)
C)(i) and (iii)
D)(ii) and (iii)

Accepted Answer

The problem of excessive fishing involves multiple countries and their access to the oceans. As a result, any solution would require international cooperation (i). Additionally, the vastness of the oceans would make it difficult to enforce an agreement (iii). Fishing rights are assigned by various organizations, not just the UN, and while the process can be long, it is not the main reason why an easy solution is not possible.

Question 7

Why do elephants face the threat of extinction while cows do not?
A)cattle are a valuable source of income for many people and elephants have no market value
B)there is a high demand for products that come only from the cow
C)there are still lots of cattle that roam free, while most elephants are in zoos
D)cattle are owned by ranchers, while elephants are owned by no-one

Accepted Answer

Elephants face extinction because they are not privately owned and protected like cattle, which are managed and bred by ranchers for economic purposes.

Question 8

Proposals to use road tolls in an effort to reduce traffic congestion are often rejected by the public because:
A)there is no longer sufficient government intervention
B)they tax only those who chose to drive on the toll roads
C)they allow the rich to drive more than the poor
D)all of the above are true

Accepted Answer

The public often rejects road tolls because they perceive them as unfair, allowing wealthier individuals to afford the tolls and drive more, while poorer individuals may be priced out.

Question 9

In many countries in Africa, elephants roam freely.Each individual African elephant poacher has:
A)a strong incentive to kill as many elephants as he can find
B)a strong incentive to protect the elephants
C)the ability to save the elephants
D)all of the above

Accepted Answer

Poachers are motivated by the high value of elephant tusks (ivory) in the black market, leading them to kill as many elephants as they can to maximize their profit.

Question 10

The use of road tolls to reduce traffic can be desirable for which of the following reasons?
(i) they charge people according to consumption
(ii) they can help bring usage closer to its optimal level
(iii) rates can differ according to the time of day
(iv) the administrative costs are virtually non-existent
A)(i) and (ii)
B)(ii) and (iii)
C)(ii), (iii) and (iv)
D)(i), (ii), and (iii)

Accepted Answer

Road tolls charge users based on their consumption (i), can optimize usage levels by managing demand (ii), and can vary rates by time to manage peak and off-peak flows (iii). Administrative costs exist, making (iv) incorrect.

Question 11

It is sometimes possible for households to use their neighbours' wireless internet without permission.What type of problem is encountered in this situation and what might be done about it?
A)Without a password the internet is a public good and the neighbours should impose a password to make it more like a private good
B)Without a password the internet is a common resource and the neighbours should impose a password to make it more like a club good
C)Without a password the internet is a common resource and the neighbours should demand the government impose a tax on wifi
D)The neighbours should ascertain who has the property rights in order to figure out the optimal solution

Accepted Answer

The answer of It is sometimes possible for households to...

Question 12

Uncongested roads are a good example of a:
A)public good
B)car prices that are too low
C)common resource
D)a toll road

Accepted Answer

Uncongested roads are a public good because their use by one person does not diminish their availability to others. Additionally, it is difficult to exclude individuals from using them.

Question 13

Congested roads are a good example of a:
A)public good
B)car prices that are too low
C)common resource
D)toll road

Accepted Answer

Congested roads are a classic example of a common resource, which is a resource that is available to everyone but may be overused or depleted if not managed properly. In this case, if too many drivers use the road at the same time, traffic will slow down or come to a standstill, which imposes a cost on everyone through increased travel time, fuel consumption, and air pollution. Toll roads, on the other hand, are a way to address the problem of congestion by charging drivers a fee to use the road and reducing the number of cars on it. However, toll roads may not be politically feasible or economically viable in all cases, and they can create equity concerns if low-income drivers are excluded from using them. Therefore, managing common resources like roads requires a careful balance between providing access to everyone and ensuring that the resource is used in a sustainable way.

Question 14

Jack, Aaron and Katie have a new television, which has stopped working.For a long time, no one takes the television to be fixed.Why might this have occurred?
A)The television is considered a private good but they can't remember who it belongs to
B)The television is considered a public good and they are each worried the others will free ride if they pay the repair fee
C)The television is considered a common resource and they are worried it will break again from being used too much
D)The television is considered a club good and they are worried about the negative externality from watching too much television

Accepted Answer

In this scenario, the television is considered a public good, meaning that it is non-excludable (they cannot prevent others from using it) and non-rival (one person's use does not diminish the others' use). Each individual may be worried about paying for repairs, as they fear the others will "free ride" and not contribute, leading to resentment or conflict. This could be a barrier to taking action to fix the television.

Question 15

In Singapore, the road tolls are charged to drivers according to:
A)the time of day when driving occurs
B)the pollution problem for the day
C)the particular roads used
D)all of the above

Accepted Answer

Singapore's road toll system, known as Electronic Road Pricing (ERP), charges drivers based on the time of day, with higher charges during peak hours to reduce congestion. It also varies by the specific roads used, targeting congested areas. While it doesn't directly charge based on daily pollution levels, the system aims to manage traffic flow and indirectly reduce pollution by discouraging driving during peak times and on busy routes.

Question 16

The ocean remains one of the largest unregulated resources because:
A)many countries have access to the ocean
B)it is difficult to get international cooperation among countries that hold different values
C)the oceans are so vast that enforcing any agreements would be difficult
D)all of the above are true

Accepted Answer

All of the given options are true. Many countries have access to the ocean, it is difficult to get international cooperation among countries that hold different values, and the oceans are so vast that enforcing any agreements would be difficult. These factors make regulating and managing the ocean's resources a complex task.

Question 17

If a road is uncongested, then use of that road by an additional person would lead to a:
A)negative externality
B)positive externality
C)natural monopoly problem
D)it would have no effect

Accepted Answer

If a road is uncongested, it means there is enough capacity for additional users without causing any negative effects on the existing users or the environment. Therefore, the use of that road by an additional person would have no effect.

Question 18

If one thinks that driving privileges should be distributed equally:
A)toll roads could be used as long as each car owner had an equal endowment of money to pay for road tolls
B)people with more expensive cars should be charged a higher toll
C)there is no solution to the congested road problem
D)toll roads would offer no solution to the problem of congested roads

Accepted Answer

If driving privileges are to be distributed equally, toll roads could be used as long as each car owner had an equal endowment of money to pay for road tolls. This way, everyone has an equal opportunity to use the road, but those who use it more often or with bigger cars will pay more for it. This solution ensures that everyone has an equal opportunity to use the road while also taking into account individual driving habits and preferences.

Question 19

A good solution to saving the tiger from extinction would be to:
A)outlaw the sale of tiger bone
B)tax the sale of tiger hides
C)develop policies that make tigers more like a private good
D)regulate the use of traditional Asian medicines that use tiger bone

Accepted Answer

The answer of A good solution to saving the tiger...

Question 20

It is common knowledge that many national parks have become overused.One possible solution to this problem is to:
A)assign rights to park entrances
B)build more roads to other natural attractions
C)introduce a quota on household visits to the park
D)vary entrance fees according to whether it is peak holiday season, a low season or a special event

Accepted Answer

Varying entrance fees based on peak holiday season, low season, or special events can help control the number of visitors at any given time, thus reducing overuse of the park. This can encourage visitors to plan their visits during off-seasons or non-peak times, leading to a better distribution of visitors throughout the year. Assigning rights to park entrances or building more roads may not be practical or feasible solutions, while introducing a quota on household visits to the park can be difficult to enforce and may lead to dissatisfaction among visitors who may not be able to visit the park.

Quiz 11: Public Goods and Common Resources

One example of private provision of a public good is:

What effect would a tax on petrol have?

If it is common knowledge that a given national park has become overused, why might raising the entrance fee to the park NOT solve the problem of overcrowding?

If all citizens in a certain city were given identical debit cards to pay for their use of toll roads, which of the following statements would be true if the debit cards could be sold privately from person to person?

Many species of animals are common resources and many must be protected by law to keep them from extinction.Why is the cow not one of these endangered species, even though there is such a high demand for beef?

Why do elephants face the threat of extinction while cows do not?

Proposals to use road tolls in an effort to reduce traffic congestion are often rejected by the public because:

In many countries in Africa, elephants roam freely.Each individual African elephant poacher has:

It is sometimes possible for households to use their neighbours' wireless internet without permission.What type of problem is encountered in this situation and what might be done about it?

Uncongested roads are a good example of a:

Congested roads are a good example of a:

Jack, Aaron and Katie have a new television, which has stopped working.For a long time, no one takes the television to be fixed.Why might this have occurred?

In Singapore, the road tolls are charged to drivers according to:

The ocean remains one of the largest unregulated resources because:

If a road is uncongested, then use of that road by an additional person would lead to a:

If one thinks that driving privileges should be distributed equally:

A good solution to saving the tiger from extinction would be to:

It is common knowledge that many national parks have become overused.One possible solution to this problem is to: