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The Great Lakes are


A) private goods.
B) club goods.
C) common resources.
D) public goods.

E) None of the above
F) B) and D)

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Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. -Refer to Table 11-2. Suppose the cost to install each streetlight is $900 and the families have agreed to split the cost of installing the streetlights equally. If the residents choose to install the number of streetlights that will maximize total surplus from the streetlights, how much total surplus will the Greene family receive? A) -$40 B) $0 C) $40 D) $60 -Refer to Table 11-2. Suppose the cost to install each streetlight is $900 and the families have agreed to split the cost of installing the streetlights equally. If the residents choose to install the number of streetlights that will maximize total surplus from the streetlights, how much total surplus will the Greene family receive?


A) -$40
B) $0
C) $40
D) $60

E) None of the above
F) A) and D)

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Which of the following goods is nonrival in consumption and excludable?


A) Grand Canyon National Park on a rainy, cool day
B) Disney World on a rainy, cool day
C) a crowded public beach on a sunny, warm day
D) White Mountain ski resort on a sunny, mild day

E) A) and D)
F) B) and C)

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Figure 11-1 -Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong? Figure 11-1 -Refer to Figure 11-1. A mathematical theorem is an example of general knowledge. In which of the boxes - A, B, C, or D - does a mathematical theorem belong?

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A mathematical theor...

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A New York legislator wanted to create a deposit on cigarettes butts. If implemented, people would have the incentive to 1) not toss cigarette butts onto public streets and sidewalks, and 2) pick butts up to redeem them for the cash. The degradation of the environment from littered cigarette butts is a


A) private goods problem.
B) Nash equilibrium.
C) Tragedy of the Commons.
D) cost-benefit equilibrium.

E) B) and C)
F) A) and B)

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Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. -Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Greene's like the town to install? A) 0 streetlights B) 1 streetlight C) 2 streetlights D) 3 streetlights -Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Greene's like the town to install?


A) 0 streetlights
B) 1 streetlight
C) 2 streetlights
D) 3 streetlights

E) A) and C)
F) A) and B)

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Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. Table 11-2 Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight. -Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of the streetlights equally. If the families vote to determine the number of streetlights to install, basing their decision solely on their own willingness to pay and trying to maximize their own surplus) , what is the greatest number of streetlights for which the majority of families would vote yes? A) 1 streetlight B) 2 streetlights C) 3 streetlights D) 4 streetlights -Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of the streetlights equally. If the families vote to determine the number of streetlights to install, basing their decision solely on their own willingness to pay and trying to maximize their own surplus) , what is the greatest number of streetlights for which the majority of families would vote "yes?"


A) 1 streetlight
B) 2 streetlights
C) 3 streetlights
D) 4 streetlights

E) A) and B)
F) B) and D)

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In what way do common resources give rise to negative externalities?

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When one person uses a common ...

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Because of the free-rider problem,


A) private markets tend to undersupply public goods.
B) the federal government spends too many resources on national defense and not enough resources on medical research.
C) fireworks displays have become increasingly dangerous.
D) poverty has increased.

E) B) and D)
F) A) and C)

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Which of the following is an example of general knowledge, as opposed to specific knowledge that can be patented?


A) the invention of a longer-lasting battery
B) a mathematical theorem
C) a method for constructing a high-performance microchip
D) the chemical formula for an adhesive

E) A) and B)
F) C) and D)

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A mobile phone is a


A) private good.
B) club good.
C) common resource.
D) public good.

E) A) and D)
F) C) and D)

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Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except


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) asking individuals to voluntarily reduce their use of the resource.

E) A) and D)
F) B) and C)

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In almost all cases of common resources, the same problem arises as in the Tragedy of the _______.

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When a good is rival in consumption,


A) one person's use of the good diminishes another person's ability to use it.
B) people can be prevented from using the good.
C) an unlimited number of people can use the good at the same time.
D) everyone will be excluded from obtaining the good.

E) A) and B)
F) A) and C)

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A vacation home in Malibu is


A) not rival in consumption and excludable.
B) rival in consumption and excludable.
C) not rival in consumption and not excludable.
D) rival in consumption and not excludable.

E) All of the above
F) None of the above

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The national defense of the United States is not excludable because


A) my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States.
B) my enjoyment of the national defense does diminish your enjoyment of the national defense of the United States.
C) once the nation is defended, it is impossible to prevent any single person from enjoying the benefit of this defense.
D) once the nation is defended, it is possible to prevent any single person from enjoying the benefit of this defense.

E) B) and C)
F) B) and D)

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Government intervention cannot improve the allocation of resources for goods that do not have prices attached to them.

A) True
B) False

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


A) Cows are a common resource, whereas elephants are owned by governments.
B) Elephants are larger than cows, requiring more economic resources.
C) Elephants live in Africa, where economic resources are scarce.
D) Elephants are a common resource, whereas cows are privately owned.

E) None of the above
F) All of the above

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Figure 11-1 Figure 11-1 -Refer to Figure 11-1. The box labeled B represents A) private goods. B) club goods. C) common resources. D) public goods. -Refer to Figure 11-1. The box labeled B represents


A) private goods.
B) club goods.
C) common resources.
D) public goods.

E) B) and D)
F) A) and D)

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Four friends decide to meet at a Chinese restaurant for dinner. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. A Tragedy of the Commons problem is likely for each of the following reasons except


A) each person has an incentive to eat as fast as possible since their individual rate of consumption will not affect their individual cost.
B) there is an externality associated with eating the food on the table.
C) when one person eats, he may not take into account how his choice affects his friends.
D) each dish would be both excludable and rival in consumption.

E) B) and D)
F) B) and C)

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