Question 1

Theoretically, when property rights are difficult to establish, multi-country agreements could help to solve the tragedy of the commons, but it has not been possible to establish any such agreement to date.

Accepted Answer

A) True 
 B)False

Question 2

Protection provided by the ozone layer is a:

Accepted Answer

A)   private good.
B)   public good.
C)   common resource.
D)   nonrival private good.E) A) and B)
F) A) and C)

Question 3

A person ________ be cheaply prevented from using national defense, a(n)  ________ good.

Accepted Answer

A)   can; excludable
B)   cannot; nonexcludable
C)   cannot; excludable
D)   can; nonexcludableE) A) and C)
F) A) and D)

Question 4

A good is excludable if one person's use of the good reduces the ability of another person to use the same good.

Accepted Answer

A) True 
 B)False

Question 5

Explain what aspect of the tragedy of the commons problem is similar to that of a negative externality.

Accepted Answer

The tragedy of the commons problem stems...

Question 6

After Napster was introduced in 1999 as a peer-to-peer file-sharing Internet service, people could cheaply distribute music. Thanks to this and other innovations ("ripping" CDs, torrents, YouTube) , music is becoming increasingly:

Accepted Answer

A)   private.
B)   nonexcludable.
C)   nonrival.
D)   taxable.E) B) and C)
F) None of the above

Question 7

Explain what aspect of the tragedy of the commons problem is similar to that of a positive externality.

Accepted Answer

The tragedy of the commons problem stems...

Question 8

When a good is rival in consumption:

Accepted Answer

A)   people can be excluded from using the good.
B)   one person's use of the good prevents another's ability to use it.
C)   no more than one person can use the good at the same time.
D)   people can be prevented from using the good.E) B) and C)
F) B) and D)

Question 9

Which of the following has been the most typical way to solve tragedy of the commons problems?

Accepted Answer

A)   government command and control solutions, like limiting the number of fishing boats
B)   government command and constraint solutions, like prohibiting any attempt to fish common areas
C)   tradable allowances which make fish a tradable market
D)   tradable allowances which result in "capital stuffing"E) C) and D)
F) A) and D)

Question 10

Goods that are excludable include both:

Accepted Answer

A)   public goods and common resources.
B)   natural monopolies and public goods.
C)   public and private goods.
D)   rival and nonrival private goods.E) B) and C)
F) A) and B)

Question 11

Why have systems similar to New Zealand's "individual transfer quota" system NOT been able to protect all animal life that is in danger of being overexploited?

Accepted Answer

A)   At present the tuna fish is not the only fish in danger of being overfished.
B)   Other countries do not have the backing of their governments the way that New Zealand does,
C)   Property rights are difficult to establish in animals that migrate over borders.
D)   None of these answers is correct.E) A) and C)
F) A) and D)

Question 12

Asteroid deflection is a good that would be profitable for an insurance company to provide.

Accepted Answer

A) True 
 B)False

Question 13

A good is nonexcludable if people who don't pay cannot be easily prevented from using the good.

Accepted Answer

A) True 
 B)False

Question 14

The difference between private goods and common resources is that common resources are:

Accepted Answer

A)   more valuable than private goods.
B)   excludable, and private goods are nonexcludable.
C)   nonexcludable, and private goods are excludable.
D)   nonrival.E) A) and B)
F) All of the above

Question 15

Compared to private goods, the free market would ________ public goods.

Accepted Answer

A)   overproduce
B)   efficiently produce
C)   underproduce
D)   sometimes overproduce but most often underproduceE) A) and D)
F) B) and C)

Question 16

Since people get to consume public goods regardless of whether they paid for them, the market will likely not produce enough public goods.

Accepted Answer

A) True 
 B)False

Question 17

You can watch the show Spartacus on the premium cable television station Starz for about $10 a month.

Accepted Answer

A)   Spartacus is inefficiently provided because it is a public good.
B)   Spartacus is inefficiently provided because some people who don't watch the show are willing to pay more than the marginal cost of broadcasting the show to one more viewer.
C)   Spartacus is efficiently provided because it is a private good that is rival and excludable.
D)   Spartacus is efficiently provided because it is a nonrival private good.E) B) and D)
F) All of the above

Question 18

Suppose that a private-sector firm produces two goods: Good 1 is a private good and Good 2 is a public good. Which of the following statements is TRUE?

Accepted Answer

A)   If a consumer spends more money on Good 1, she gets more Good 1.
B)   If a consumer spends more money on Good 2, she gets more Good 2.
C)   If a consumer spends less money on Good 1, she gets less Good 2.
D)   If a consumer spends less money on Good 2, she gets less Good 1.E) A) and B)
F) None of the above

Question 19

During the Middle Ages, many villages had areas reserved for families to take their cows or sheep to graze. All families were welcome to use this land without charge. The land for grazing can be characterized as a:

Accepted Answer

A)   public good.
B)   private good.
C)   natural resource.
D)   common resource.E) A) and B)
F) A) and C)

Question 20

Wealthy industrialist Henry Hawk fears an asteroid hitting Earth and is willing and able to pay $15 billion to develop an asteroid deflection system. Suppose asteroid deflection only costs $10 billion and Hawk makes asteroid deflection a reality. What type of good has Henry Hawk provided?

Accepted Answer

A)   public good
B)   private good
C)   nonrival private good
D)   commons resourceE) A) and D)
F) A) and C)

Exam 19: Public Goods and the Tragedy of the Commons

The difference between private goods and common resources is that common resources are:

Correct AnswerverifiedShow Answer

During the Middle Ages, many villages had areas reserved for families to take their cows or sheep to graze. All families were welcome to use this land without charge. The land for grazing can be characterized as a:

Correct AnswerverifiedShow Answer

Protection provided by the ozone layer is a:

Correct AnswerverifiedShow Answer

A good is excludable if one person's use of the good reduces the ability of another person to use the same good.

Correct AnswerverifiedShow Answer

After Napster was introduced in 1999 as a peer-to-peer file-sharing Internet service, people could cheaply distribute music. Thanks to this and other innovations ("ripping" CDs, torrents, YouTube) , music is becoming increasingly:

Correct AnswerverifiedShow Answer

A good is nonexcludable if people who don't pay cannot be easily prevented from using the good.

Correct AnswerverifiedShow Answer

Explain what aspect of the tragedy of the commons problem is similar to that of a positive externality.

Correct AnswerverifiedThe tragedy of the commons problem stems...View AnswerShow Answer

Explain what aspect of the tragedy of the commons problem is similar to that of a negative externality.

Correct AnswerverifiedThe tragedy of the commons problem stems...View AnswerShow Answer

Wealthy industrialist Henry Hawk fears an asteroid hitting Earth and is willing and able to pay $15 billion to develop an asteroid deflection system. Suppose asteroid deflection only costs $10 billion and Hawk makes asteroid deflection a reality. What type of good has Henry Hawk provided?

Correct AnswerverifiedShow Answer

You can watch the show Spartacus on the premium cable television station Starz for about $10 a month.

Correct AnswerverifiedShow Answer

Why have systems similar to New Zealand's "individual transfer quota" system NOT been able to protect all animal life that is in danger of being overexploited?

Correct AnswerverifiedShow Answer

Compared to private goods, the free market would ________ public goods.

Correct AnswerverifiedShow Answer

Suppose that a private-sector firm produces two goods: Good 1 is a private good and Good 2 is a public good. Which of the following statements is TRUE?

Correct AnswerverifiedShow Answer

Since people get to consume public goods regardless of whether they paid for them, the market will likely not produce enough public goods.

Correct AnswerverifiedShow Answer

Which of the following has been the most typical way to solve tragedy of the commons problems?

Correct AnswerverifiedShow Answer

A person ________ be cheaply prevented from using national defense, a(n) ________ good.

Correct AnswerverifiedShow Answer

Asteroid deflection is a good that would be profitable for an insurance company to provide.

Correct AnswerverifiedShow Answer

Goods that are excludable include both:

Correct AnswerverifiedShow Answer

Theoretically, when property rights are difficult to establish, multi-country agreements could help to solve the tragedy of the commons, but it has not been possible to establish any such agreement to date.

Correct AnswerverifiedShow Answer

When a good is rival in consumption:

Correct AnswerverifiedShow Answer

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The tragedy of the commons problem stems...
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The tragedy of the commons problem stems...
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A person be cheaply prevented from using national defense, a(n) good.

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