Question 1

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

Accepted Answer

All of the choices given are reasons why the ocean remains one of the largest unregulated resources.

Question 2

Imagine a 2,000-acre park with picnic benches, trees, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking on summer afternoons. Otherwise, it is a great place. An efficient solution to the parking problem would be to

Accepted Answer

Charging higher prices during busy times would discourage some people from coming, allowing for available parking for those who are willing to pay the premium. This would minimize the parking problem while still allowing for the maximum number of people to enjoy the park. Prohibiting parking or policing the area may cause visitors to go elsewhere, reducing park usage and enjoyment. Doing nothing would only exacerbate the problem.

Question 3

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?

Accepted Answer

The answer of Many species of animals are common resources,...

Question 4

Imagine a 2,000-acre park with picnic benches, trees, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking, and the trash cans overflow with food wrappers on summer afternoons. Otherwise, it is a great place. The park is a common resource because

Accepted Answer

The park is a common resource because if too many people use it, one person's use diminishes other people's use. This is evident from the fact that when the weather is nice, it is difficult to find parking, and the trash cans overflow with food wrappers on summer afternoons. This indicates that the park is getting overcrowded, which reduces the enjoyment of the park for other people.

Question 5

Elephant populations in some African countries have started to rise because

Accepted Answer

The answer of Elephant populations in some African countries have...

Question 6

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. Suppose that the Minnesota State Park Service institutes a variable fee structure. On weekdays when the picnic areas get little use, the fee is zero. On normal weekends, the fee is $8 per person. On holiday weekends, the fee is $14 per person. The fee system corrects a problem known as the

Accepted Answer

The fee system corrects the Tragedy of the Commons, which is the problem of overuse and depletion of a shared resource, in this case, the picnic area of state parks. By implementing variable fees based on the level of use, the state park service incentivizes people to use the picnic areas responsibly and avoid overcrowding, which benefits everyone. The Coase theorem deals with externalities and the allocation of property rights, the free rider problem arises when people can benefit from a public good without paying for it, and the public goods problem deals with the non-excludability and non-rivalry of public goods.

Question 7

Excessive fishing occurs because

Accepted Answer

Excessive fishing occurs because each individual fisherman has little incentive to maintain the species for the next year. They are only interested in catching as much fish as possible to maximize their profits. This is known as the tragedy of the commons, where individual actions lead to the depletion of a shared resource.

Question 8

A stairwell in a certain office building is always congested at 12:00 p.m. and 1:00 p.m. The congestion is so bad that people have been complaining to the building's owner. Which of the following methods would be the most efficient way of reducing congestion?

Accepted Answer

The answer of A stairwell in a certain office building...

Question 9

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

Accepted Answer

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

Question 10

Stewart is a lobsterman. His traps are

Accepted Answer

Stewart's traps are considered private goods because they are owned by him and not available for public use. The lobster he catches, however, are considered common resources because they are not owned by anyone and are available for anyone to catch, leading to issues of overuse and depletion.

Question 11

Why has the value of ivory threatened the extinction of the elephant, whereas the value of beef has enhanced the survival of the cow?

Accepted Answer

Elephants are a common resource, meaning they are owned by the state or government, whereas cows are privately owned. This means that there is less incentive for individuals to illegally hunt or poach cows for profit, as they would not have ownership of the animal. However, with elephants, there is a large black market demand for ivory, which has incentivized poaching and contributed to the decline in elephant populations.

Question 12

Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time- share condominium in Alta, Utah. Suppose that the lift lines at the ski resort become more congested when the ten additional people start to ski. Which of the following statements is not correct?

Accepted Answer

The statement "Each of the ten friends would have been better off staying at home" is incorrect as they pooled their financial resources to enjoy a ski vacation together. Each friend derived some utility from the trip and it is not necessary true that they would have been better off staying at home.

Question 13

The commercial value of ivory is a threat to the elephant, but the commercial value of beef is a guardian of the cow. This is because

Accepted Answer

Cows are owned and considered private goods, which means they are valuable to their owners who have a vested interest in their well-being and continued production. Elephants, on the other hand, tend to be considered public goods, as they often roam freely without owners and are not directly valuable to any individual or group. This makes them vulnerable to exploitation and the commercial value of their ivory a threat to their survival.

Question 14

Residents of Hong Kong are able to find restaurants that advertise a dish that contains grizzly bear paws. Since it is unlikely that grizzly bear paws are purchased from a private producer of animal paws, we can likely conclude that

Accepted Answer

The answer of Residents of Hong Kong are able to...

Question 15

Congressman Smith and Congresswoman Johnson both consider themselves advocates for the national parks and are introducing different bills designed to benefit the parks. Congressman Smith's bill calls for an increase in the entrance fees. Congresswoman Johnson's bill calls for a decrease in the entrance fees. Which of the bills would be more effective at ensuring the quality of the national parks?

Accepted Answer

The answer of Congressman Smith and Congresswoman Johnson both consider...

Question 16

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

Accepted Answer

By increasing entrance fees, fewer people may be willing or able to visit the park, which could help to alleviate overuse. Additionally, the increased revenue could be put towards implementing management strategies to further address overcrowding and environmental impacts. Decreasing camping permit fees would likely have the opposite effect and attract even more visitors, exacerbating the problem. Requiring visitors to register upon entering the park could be helpful for management purposes, but would not necessarily address the issue of overuse. Selling the land that national parks currently occupy would not only be environmentally devastating, but would also eliminate the very purpose of having protected lands for future generations to enjoy.

Question 17

Elephants are endangered, but cows are not because

Accepted Answer

Elephants are a common resource, which means they are not owned by one individual or group, but are available for anyone to use. This makes them vulnerable to overuse and exploitation, leading to endangerment. Cows, on the other hand, are private goods, which means they are owned by individuals or groups who have a financial incentive to protect and maintain them, thus preventing endangerment.

Question 18

Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket. Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers. Which of the following statements is not correct?

Accepted Answer

The statement "Each of the nine friends would have been better off staying at home" is not correct because they still enjoy the benefits of the beach despite the increase in congestion. This statement assumes that the externality of congestion completely outweighs the benefits of being at the beach, which may not be true for all individuals.

Question 19

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

Accepted Answer

Poachers have a strong incentive to kill elephants because of the economic gains they can obtain from selling elephant ivory. This creates a poaching crisis for African elephants.

Question 20

Why is the commercial value of ivory a threat to the elephant, while the commercial value of beef is the cow's guardian?

Accepted Answer

The commercial value of ivory is a threat to the elephant because it leads to poaching and illegal killing of elephants for their tusks. Elephants are not a common resource and their population size is declining rapidly due to poaching. On the other hand, the commercial value of beef is not a threat to cows because they are a common resource and their population size is maintained through breeding and farming practices.

Quiz 11: Public Goods and Common Resources