Question 1

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
A) The toll provides an incentive for commuters to drive at times other than rush hour.
B) The toll provides an incentive for commuters to use public transit rather than driving.
C) The toll provides an incentive for commuters to drive more fuel-efficient cars.
D) The toll provides an incentive for commuters to car-pool.

Accepted Answer

While the toll does provide incentives for commuters to drive less or use alternative modes of transportation, it does not necessarily provide an incentive for them to drive more fuel-efficient cars. The toll is based on the number of cars, not how fuel-efficient they are.

Question 2

Which of the following statements is true of the tax on gasoline?
A) The cost of collecting a gasoline tax outweighs the revenues raised by the tax.
B) It is preferred to tolls as the best solution to road congestion.
C) It discourages driving on noncongested roads,even though there is no congestion externality for these roads.
D) Both b and c are correct.

Accepted Answer

The tax on gasoline is meant to internalize the negative externality of congestion, which is only present on congested roads. Therefore, it does not make sense to discourage driving on noncongested roads as there is no externality to internalize. Option A is incorrect, as the cost of collecting the tax is typically lower than the revenue raised. Option B is incorrect, as tolls are a more efficient way to address road congestion.

Question 3

Mayor Bloomberg of New York proposed a plan in which the city could be "greater" and "greener" by 2030.The plan included imposing a congestion toll.Which of the following is not a characteristic of proposed toll?
A) Car drivers would be charged $8.00 to enter the congestion zone between 6am and 6pm.
B) Truck drivers would be charged $21.00 to enter the congestion zone between 6am and 6pm.
C) Transit fares would increase by 20 percent.
D) Taxis are exempt from the toll.

Accepted Answer

The proposed toll includes charges for car and truck drivers to enter the congestion zone, but there is no mention of an increase in transit fares. Taxis are exempt from the toll, as stated in option D.

Question 4

Four roommates share an off-campus house and equally share the cost of rent.Everyone says that she values a clean house,yet the house is usually dirty.To an economist,a clean house in this case represents
A) a common resource problem.
B) a public good.
C) a natural monopoly.
D) All of the above are correct.

Accepted Answer

The fact that everyone values a clean house but the house is usually dirty suggests a common resource problem. In this case, the cleaning duties are a shared resource and no one is willing to take responsibility for them, leading to a collective action problem. A public good would be something that is non-excludable and non-rivalrous, and a natural monopoly describes a market structure where one firm can produce at a lower cost than any potential competitor. These concepts are not directly applicable to the situation described in the question.

Question 5

Mayor Bloomberg of New York proposed a plan in which the city could be "greater" and "greener" by 2030.The plan included imposing a congestion toll.Which of the following is not an advantage of the tolls?
A) The congestion toll will place a greater burden on the poor and middle class.
B) The congestion toll will reduce carbon dioxide emissions.
C) The congestion toll will reduce travel time delay.
D) The congestion toll can vary based on the time of day.

Accepted Answer

The other options all describe advantages of congestion tolls, such as reducing emissions, reducing travel time delay, and varying based on time of day. However, option A highlights a potential disadvantage of the toll - that it may place a greater financial burden on lower income individuals who have fewer transportation options.

Question 6

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. This toll is intended to reduce congestion and encourage the use of public transportation.

Question 7

When Susie uses a common resource and diminishes other people's enjoyment of it,she creates
A) a free rider problem.
B) an externality.
C) a nonrenewable resource.
D) general knowledge.

Accepted Answer

When Susie uses a common resource and causes a negative impact on other people's enjoyment of it, she creates an externality. This is because her use of the resource affects others who did not have a say in her use of it and did not receive compensation for the negative impact.

Question 8

Since the London congestion toll plan was introduced,
A) vehicle speeds in the city's central business district have increased.
B) carbon-dioxide emissions from cars and trucks have decreased.
C) the toll has grown increasingly popular with Londoners.
D) All of these things have happened.

Accepted Answer

Since the London congestion toll plan was introduced, there has been an increase in vehicle speeds in the city's central business district, a decrease in carbon-dioxide emissions from cars and trucks, and the toll has grown increasingly popular with Londoners. Therefore, all of these things have happened.

Question 9

Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?
A) reduced carbon monoxide pollution
B) increased use of public transportation
C) improved taxi service
D) shorter travel time

Accepted Answer

Improved taxi service is actually an advantage that can come from implementing congestion charges, as fewer cars on the road mean less competition for taxis and potentially faster response times. The other options (A, B, and D) are all benefits that can result from reducing the number of cars on busy streets through congestion charges.

Question 10

Using a toll to reduce traffic when congestion is greatest is an example of a
A) regulation solution.
B) command-and-control policy.
C) corrective tax.
D) Coase theorem solution.

Accepted Answer

A toll is a type of corrective tax that aims to internalize the negative externality of traffic congestion. It increases the cost of driving during peak periods, discouraging some drivers from using the road at those times, and encouraging others to find alternative routes or modes of transportation. This can lead to a reduction in traffic congestion and associated economic and environmental costs.

Question 11

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

Accepted Answer

The answer of Why do elephants face the threat of...

Question 12

Because elephants roam freely in many countries in Africa,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) None of the above is correct.

Accepted Answer

African elephant poachers have a strong incentive to kill as many elephants as they can find because of the high demand for elephant tusks in the international market, which can fetch a high price. This has led to a decline in African elephant populations and increased the risk of extinction for this animal species.

Question 13

Which of the following is not an advantage of road tolls as a way to reduce traffic?
A) They charge people based on consumption.
B) They can help bring usage closer to its optimal level.
C) Rates can differ according to the time of day.
D) The administrative costs of collecting the tolls are almost zero,especially for local roads.

Accepted Answer

The statement "The administrative costs of collecting the tolls are almost zero, especially for local roads" is incorrect as toll collection requires infrastructure and personnel to manage and maintain it, which incurs costs. Therefore, D is not an advantage of road tolls.

Question 14

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 corrective tax because it aims to discourage driving on a congested road, by imposing a cost on the driver. The higher the congestion, the higher the toll, which incentivizes drivers to find alternative routes or modes of transportation, reducing congestion and its associated negative externalities (e.g. pollution, time wasted in traffic).

Question 15

The U.S.government protects fish,a common resource,by
A) subsidizing the fishing industry.
B) heavily taxing competing industries.
C) selling fishing licenses and regulating fish lengths.
D) None of the above is correct.

Accepted Answer

The U.S. government protects fish, a common resource, by selling fishing licenses and regulating fish lengths. This helps to ensure that the fish population is not overexploited and that there will be fish available for future generations. Subsidizing the fishing industry or heavily taxing competing industries may not necessarily protect the fish population and could even have negative impacts.

Question 16

Excessive fishing occurs because
A) each individual fisherman has little incentive to maintain the species for the next year.
B) fishermen rely on government managers to worry about fish populations.
C) fishermen are unionized,so they are not concerned with externalities.
D) fishermen have other marketable skills and do not fear exploitation of fish reserves.

Accepted Answer

Each individual fisherman has little incentive to maintain the species for the next year. They are focused on maximizing their own catch for profit in the present, rather than considering the long-term health and sustainability of the fish population. This leads to overfishing and depletion of fish stocks.

Question 17

One of the least regulated common resources today is
A) state parks.
B) the ocean.
C) forest preserves.
D) the Great Lakes.

Accepted Answer

The ocean is the least regulated common resource today, with limited international agreements and a lack of effective enforcement mechanisms. This has led to issues such as overfishing, pollution, and degradation of marine ecosystems. While state parks, forest preserves, and the Great Lakes may face some regulation, the ocean remains largely unregulated.

Question 18

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

The answer of A tax on gasoline often reduces road...

Question 19

Each of the following would be considered a common resource except
A) clean air.
B) congested nontoll roads.
C) national defense.
D) open grazing land.

Accepted Answer

National defense is typically considered a public good or a government-provided service, rather than a common resource. Clean air, congested nontoll roads, and open grazing land are all examples of common resources that can be overused if not properly managed.

Question 20

The ocean remains one of the largest unregulated resources for each of the following reasons except
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 reasons the ocean remains one of the largest unregulated resources.

Accepted Answer

All of the above reasons - access to the ocean by many countries, difficulty in international cooperation, and difficulty in enforcement due to the vastness of the oceans - contribute to the fact that the ocean remains one of the largest unregulated resources.

Quiz 11: Public Goods and Common Resources

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

Which of the following statements is true of the tax on gasoline?

Mayor Bloomberg of New York proposed a plan in which the city could be "greater" and "greener" by 2030.The plan included imposing a congestion toll.Which of the following is not a characteristic of proposed toll?

Four roommates share an off-campus house and equally share the cost of rent.Everyone says that she values a clean house,yet the house is usually dirty.To an economist,a clean house in this case represents

Mayor Bloomberg of New York proposed a plan in which the city could be "greater" and "greener" by 2030.The plan included imposing a congestion toll.Which of the following is not an advantage of the tolls?

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

When Susie uses a common resource and diminishes other people's enjoyment of it,she creates

Since the London congestion toll plan was introduced,

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

Using a toll to reduce traffic when congestion is greatest is an example of a

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

Because elephants roam freely in many countries in Africa,each individual African elephant poacher has

Which of the following is not an advantage of road tolls as a way to reduce traffic?

A toll on a congested road is in essence

The U.S.government protects fish,a common resource,by

Excessive fishing occurs because

One of the least regulated common resources today is

A tax on gasoline often reduces road congestion because gasoline

Each of the following would be considered a common resource except

The ocean remains one of the largest unregulated resources for each of the following reasons except