Question 1

The figure above shows the marginal benefit curve (MB)and marginal cost curve (MC)of surveillance satellites that provide national defense services.
-In the figure above, a private market will most likely produce

Accepted Answer

The answer of The figure above shows the marginal benefit...

Question 2

Which of the following is true?
I∙A common resource is a resource that is nonrival and nonexcludable.
Ii∙Issuing individual transferable quotas (ITQ)means that for users of common resources, the marginal cost plus the price of the ITQ equals the marginal social cost.
Iii∙In an unregulated market, a common resource is used to the point at which marginal private benefit equals marginal cost.

Accepted Answer

The answer of Which of the following is true?
I∙A common...

Question 3

Fish in the ocean are an example of ________ because they are ________.

Accepted Answer

Fish in the ocean are a common resource because they are rival (one person's catch reduces the available stock for others) and nonexcludable (it is difficult to prevent someone from catching fish).

Question 4

What is the free-rider problem and with what is it associated?

Accepted Answer

The answer of What is the free-rider problem and with...

Question 5

A natural monopoly, such as the Internet, is

Accepted Answer

A natural monopoly is nonrival because it can be used by many individuals without decreasing the amount available for others to use. However, it is excludable because access to the Internet is controlled through subscription or payment for services.

Question 6

What are the differences between public goods and private goods?

Accepted Answer

The answer of What are the differences between public goods...

Question 7

What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?

Accepted Answer

The answer of What does it mean for a good...

Question 8

The figure above shows the marginal benefit curve (MB)and marginal cost curve (MC)of surveillance satellites that provide national defense services.
-Using the figure above, suppose there are two political parties, the Hawks and the Doves, which agree on all issues except for the quantity of defense satellites.The Hawks want 300 satellites and the Doves want 100 satellites.The voters are well informed and know what is best for them.The parties run a voter survey and discover the marginal benefit curve (MB).They also know the marginal cost curve (MC).What quantity of satellites will most likely result from this political process?

Accepted Answer

In a well-informed electorate where voters know what is best for them, political parties will aim to propose policies that maximize the net benefit to society, which is where the marginal benefit (MB) equals the marginal cost (MC). Assuming the MB curve reflects the voters' preferences accurately, the quantity of satellites that maximizes net benefit would likely be at the point where MB equals MC. Without specific details on the MB and MC curves, the most rational compromise between the two parties' preferences (300 for Hawks and 100 for Doves) would be the middle ground, which is 200 satellites. This position would likely garner the most voter support, as it represents a compromise that still aims to maximize societal welfare based on the given preferences.

Question 9

You are studying with a friend and your friend says, "private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?

Accepted Answer

The answer of You are studying with a friend and...

Question 10

The figure above shows the marginal benefit curve (MB)and marginal cost curve (MC)of surveillance satellites that provide national defense services.
-Suppose that satellites are publicly provided.The voters are rationally ignorant, while the Defense Ministry is well informed.Using the figure above, which of the following quantities of satellites is most likely to be provided?

Accepted Answer

The answer of The figure above shows the marginal benefit...

Question 11

National defense is a ________ because ________.

Accepted Answer

National defense is a public good because it is nonrival (one person's use of defense does not reduce the availability of defense for another person) and nonexcludable (it is difficult to exclude someone from being protected by the defense system).

Question 12

Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?

Accepted Answer

The answer of Is a sailboat purchased in Victoria, British...

Question 13

A few years back, The Wall Street Journal reported that the government of Thailand "plans to launch a chain of more than 3,000 Thai restaurants world-wide over the next five years, with the largest number, more than 1,000, slated for the United States." The Thai government will have a 30 percent minority stake in the restaurants and the rest will be given to Thai owners.The country's deputy commerce minister explains that the government will play an active role in drawing up menus, making sure that genuine Thai food is served and ensuring that 70 percent of supplies for the restaurants are imported from Thailand.Because the Thai government will be part owner of these restaurants, are these restaurants public goods?

Accepted Answer

The answer of A few years back, The Wall Street...

Question 14

Some resources are private and others are common.Define a common resource, explain the definition, and provide an example of a private resource and a common resource.

Accepted Answer

The answer of Some resources are private and others are...

Question 15

The reason that private provision of a public good often leads to inefficiency is because

Accepted Answer

Private provision of a public good often leads to inefficiency because public goods are non-excludable and non-rivalrous, meaning that individuals can benefit from the good without paying for it, leading to under-provision as no one has the incentive to pay.

Question 16

What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?

Accepted Answer

The answer of What is the free-rider problem? What results...

Question 17

The free-rider problem applies

Accepted Answer

The answer of The free-rider problem applies
...

Question 18

Which of the following can be rival and excludable?
i. a good
ii. a service
iii. a resource

Accepted Answer

Goods, services, and resources can all be rival and excludable. Rivalry means that one person's consumption of a product reduces the amount available for others, and excludability means that it's possible to prevent people from using the product unless they pay for it. All three categories can have examples fitting these criteria.

Question 19

The marginal benefit curve of a public good is calculated by ________ individual marginal ________ curves.

Accepted Answer

The marginal benefit curve of a public good is calculated by vertically summing individual marginal benefit curves, as each additional unit of the public good benefits all individuals in the society.

Question 20

When describing goods and services, what is meant by the terms "rival" and "nonrival?" Are private goods rival or nonrival? Are public goods rival or nonrival? Are common resources rival or nonrival?

Accepted Answer

The answer of When describing goods and services, what is...

Quiz 11: Public Goods and Common Resources

The figure above shows the marginal benefit curve (MB) and marginal cost curve (MC) of surveillance satellites that provide national defense services. -In the figure above, a private market will most likely produce

Fish in the ocean are an example of because they are .