Question 1

To determine if a good is a common resource or a public good, we need to know:

Accepted Answer

A)   if the good is provided by the government
B)   if my use of the good reduces its availability to you
C)   if the good can be patented
D)   if the good is very expensive to produceE) A) and B)
F) B) and C)

Question 2

A consortium of government, local councils, farmers and environmentalists has been created to try and manage the cattle effluent in rural streams. Identify a solution that may manage the resource better and explain how it may improve the water resources and protect them in the future.

Accepted Answer

Conferring property rights to farmers on...

Question 3

In modern industrialised economies there are goods that can be consumed without paying for them.

Accepted Answer

A) True 
 B)False

Question 4

Government may be able to solve the problem of overuse of a common resource by:

Accepted Answer

A)   regulating the use or consumption of the common resource
B)   taxing the use or consumption of the common resource
C)   selling the common resource to a private entity
D)   doing all of the aboveE) A) and B)
F) A) and C)

Question 5

Explain the difference between a common resource and a public good.

Accepted Answer

A public good is nei...

Question 6

When private costs differ from social costs, which of the following must be present?

Accepted Answer

A)   excludable resources
B)   a negative externality
C)   a natural monopoly
D)   poor profit incentive to capitalise on the resourceE) C) and D)
F) A) and C)

Question 7

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

Accepted Answer

A)   (i)  and (ii) 
B)   (ii)  and (iii) 
C)   (ii) , (iii)  and (iv) 
D)   (i) , (ii) , and (iii) E) B) and C)
F) C) and D)

Question 8

Suppose that policymakers are doing a cost-benefit analysis on a proposal to add traffic barriers to a motorway. These barriers will reduce the number of fatal accidents on this motorway. Which of the following statements is true?

Accepted Answer

A)   the benefits will always exceed the cost because reducing the risk of accidents is so valuable
B)   people will exaggerate the benefits of traffic barriers in a questionnaire on their values
C)   it is not possible to put a dollar value on someone's life
D)   the benefits will never exceed the cost, because people show they don't care about accident risks by buying unsafe carsE) A) and B)
F) A) and C)

Question 9

When a common resource like grazing land, is plentiful and everyone can get all the good grazing land they want, a tragedy of the commons exists.

Accepted Answer

A) True 
 B)False

Question 10

The most effective ways to solve highway congestion is to:

Accepted Answer

A)   to increase tolls as roads become busier and reduce tolls as the roads become less busy
B)   to have a standard toll price
C)   have an inner-city rail network
D)   to reduce tolls as roads become busier and increase tolls as the roads become less busyE) A) and B)
F) B) and D)

Question 11

Which of the following statements is true of public goods?

Accepted Answer

A)   one person's enjoyment of a public good reduces another person's enjoyment of the same good
B)   people cannot be prevented from using a public good
C)   all of the above are true
D)   none of the above is trueE) A) and D)
F) None of the above

Question 12

The government provides public goods because:

Accepted Answer

A)   private markets are incapable of producing public goods
B)   markets are always better off with some government oversight
C)   free-riders make it difficult for private markets to supply the socially optimal quantity
D)   external benefits will occur to private producersE) A) and B)
F) All of the above

Question 13

Which of the following statements is true of cost-benefit analysis? (i)  analysts are not able to observe price signals
(ii)  costs are explicit and quantified quite easily
(iii)  benefits are rough approximations

Accepted Answer

A)   (i)  and (ii) 
B)   (ii)  and (iii) 
C)   (i)  and (iii) 
D)   (i) , (ii)  and (iii) E) B) and D)
F) None of the above

Question 14

A ship's captain who doesn't want to pay for a lighthouse service, must derive no benefit from the lighthouse.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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 trueE) B) and C)
F) A) and D)

Question 16

Oceanic fish species like cod, are less prone to over-fishing because less people want to harvest them.

Accepted Answer

A) True 
 B)False

Question 17

To decide whether a public good should be provided, the government needs to know: (i)  what the costs to society of providing the good are
(ii)  what the benefits to society of providing the good are
(iii)  what price people pay for the good in an actual market

Accepted Answer

A)   (i)  and (ii) 
B)   (i)  and (iii) 
C)   (i)  only
D)   (i) , (ii)  and (iii) E) A) and C)
F) A) and B)

Question 18

In the 1950s in Australia, estuarine crocodiles were hunted almost to extinction for their leather. This means the crocodiles were a:

Accepted Answer

A)   private good
B)   public good
C)   common resource
D)   none of the aboveE) None of the above
F) A) and B)

Question 19

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

Accepted Answer

A) True 
 B)False

Question 20

Markets may allocate natural resources wastefully if:

Accepted Answer

A)   people get too greedy
B)   property rights are neither well defined nor enforced
C)   catching poachers is very easy
D)   All of the above are possibleE) A) and B)
F) A) and C)

Exam 11: Public Goods and Common Resources

Suppose that policymakers are doing a cost-benefit analysis on a proposal to add traffic barriers to a motorway. These barriers will reduce the number of fatal accidents on this motorway. Which of the following statements is true?

Correct Answer
verified

In the 1950s in Australia, estuarine crocodiles were hunted almost to extinction for their leather. This means the crocodiles were a:

Correct Answer
verified

Markets may allocate natural resources wastefully if:

Correct Answer
verified

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

Correct Answer
verified

The government provides public goods because:

Correct Answer
verified

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

Correct Answer
verified

Which of the following statements is true of public goods?

Correct Answer
verified

When a common resource like grazing land, is plentiful and everyone can get all the good grazing land they want, a tragedy of the commons exists.

Correct Answer
verified

Government may be able to solve the problem of overuse of a common resource by:

Correct Answer
verified

In modern industrialised economies there are goods that can be consumed without paying for them.

Correct Answer
verified

Which of the following statements is true of cost-benefit analysis? (i) analysts are not able to observe price signals (ii) costs are explicit and quantified quite easily (iii) benefits are rough approximations

Correct Answer
verified

A consortium of government, local councils, farmers and environmentalists has been created to try and manage the cattle effluent in rural streams. Identify a solution that may manage the resource better and explain how it may improve the water resources and protect them in the future.

Correct Answer
verified
Conferring property rights to farmers on...
View Answer

To decide whether a public good should be provided, the government needs to know: (i) what the costs to society of providing the good are (ii) what the benefits to society of providing the good are (iii) what price people pay for the good in an actual market

Correct Answer
verified

Oceanic fish species like cod, are less prone to over-fishing because less people want to harvest them.

Correct Answer
verified

When private costs differ from social costs, which of the following must be present?

Correct Answer
verified

Correct Answer
verified

Explain the difference between a common resource and a public good.

Correct Answer
verified
A public good is nei...
View Answer

To determine if a good is a common resource or a public good, we need to know:

Correct Answer
verified

The most effective ways to solve highway congestion is to:

Correct Answer
verified

A ship's captain who doesn't want to pay for a lighthouse service, must derive no benefit from the lighthouse.

Correct Answer
verified

Exam 11: Public Goods and Common Resources

Suppose that policymakers are doing a cost-benefit analysis on a proposal to add traffic barriers to a motorway. These barriers will reduce the number of fatal accidents on this motorway. Which of the following statements is true?

Correct AnswerverifiedShow Answer

In the 1950s in Australia, estuarine crocodiles were hunted almost to extinction for their leather. This means the crocodiles were a:

Correct AnswerverifiedShow Answer

Markets may allocate natural resources wastefully if:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The government provides public goods because:

Correct AnswerverifiedShow Answer

When goods are available free of charge, the market forces that normally allocate resources in our economy are absent.

Correct AnswerverifiedShow Answer

Which of the following statements is true of public goods?

Correct AnswerverifiedShow Answer

When a common resource like grazing land, is plentiful and everyone can get all the good grazing land they want, a tragedy of the commons exists.

Correct AnswerverifiedShow Answer

Government may be able to solve the problem of overuse of a common resource by:

Correct AnswerverifiedShow Answer

In modern industrialised economies there are goods that can be consumed without paying for them.

Correct AnswerverifiedShow Answer

Which of the following statements is true of cost-benefit analysis? (i) analysts are not able to observe price signals (ii) costs are explicit and quantified quite easily (iii) benefits are rough approximations

Correct AnswerverifiedShow Answer

A consortium of government, local councils, farmers and environmentalists has been created to try and manage the cattle effluent in rural streams. Identify a solution that may manage the resource better and explain how it may improve the water resources and protect them in the future.

Correct AnswerverifiedConferring property rights to farmers on...View AnswerShow Answer

To decide whether a public good should be provided, the government needs to know: (i) what the costs to society of providing the good are (ii) what the benefits to society of providing the good are (iii) what price people pay for the good in an actual market

Correct AnswerverifiedShow Answer

Oceanic fish species like cod, are less prone to over-fishing because less people want to harvest them.

Correct AnswerverifiedShow Answer

When private costs differ from social costs, which of the following must be present?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain the difference between a common resource and a public good.

Correct AnswerverifiedA public good is nei...View AnswerShow Answer

To determine if a good is a common resource or a public good, we need to know:

Correct AnswerverifiedShow Answer

The most effective ways to solve highway congestion is to:

Correct AnswerverifiedShow Answer

A ship's captain who doesn't want to pay for a lighthouse service, must derive no benefit from the lighthouse.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Conferring property rights to farmers on...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A public good is nei...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified