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Public Goods and Common Resources
Multiple Choice – Section 00: Introduction
1.
For private goods allocated in markets,
a.
prices guide the decisions of buyers and sellers and these decisions lead to an efficient allocation
of resources.
b.
prices guide the decisions of buyers and sellers and these decisions lead to an inefficient
allocation of
resources.
c.
the government guides the decisions of buyers and sellers and these decisions lead to an efficient
allocation of
resources.
d.
the government guides the decisions of buyers and sellers and these decisions lead to an
inefficient allocation of
resources.
2.
Government policy can potentially raise economic well-being
a.
in all markets for goods and services.
b.
in economic models, but not in reality.
c.
when a good does not have a price attached to it.
d.
never.
3.
The old lyric “the best things in life are free”
a.
is not true for any goods.
b.
is even true for some goods that have a price.
c.
refers to goods provided by nature or the government.
d.
refers to goods provided by the market.
4.
Governments can improve market outcomes for
a.
public goods but not common resources.
b.
common resources but not public goods.
c.
both public goods and common resources.
d.
neither public goods nor common resources.
5.
For most goods in an economy, the primary signal that guides the decisions of buyers and sellers is
a.
advertising.
b.
quality.
c.
reputation.
d.
price.
6.
When goods do not have a price, which of the following primarily ensures that the good is
produced?
a.
buyers
b.
sellers
c.
government
d.
the market
7.
If good x is available free of charge, then
a.
good x must be provided by nature.
b.
good x must be provided by the government.
c.
the private market cannot ensure an efficient allocation of resources in the market for good x.
d.
government policy is incapable of increasing total surplus in the market for good x.
8.
Resources tend to be allocated inefficiently when goods
a.
are private goods.
b.
are rival in consumption and excludable.
c.
are available free of charge.
d.
are available only at very high prices.
Public Goods and Common Resources 2739
Multiple Choice – Section 01: The Different Kinds of Goods
1.
A city street is
a.
always a public good, whether or not it is congested.
b.
a public good when it is congested, but it is a common resource when it is not congested.
c.
a common resource when it is congested, but it is a public good when it is not congested.
d.
always a common resource, whether or not it is congested.
2.
The provision of a public good generates a
a.
positive externality, as does the use of a common resource.
b.
positive externality and the use of a common resource generates a negative externality.
c.
negative externality, as does the use of a common resource.
d.
negative externality and the use of a common resource generates a positive externality.
3.
The idea that “externalities arise because something of value has no price attached to it” is
associated with
a.
public goods, but not with common resources.
b.
common resources, but not with public goods.
c.
both public goods and common resources.
d.
neither public goods nor common resources.
4.
The provision of public goods gives rise to
a.
no externalities.
b.
positive externalities.
c.
negative externalities.
d.
rivalries in consumption.
5.
The provision of public goods gives rise to
a.
positive externalities, as does the use of common resources.
b.
positive externalities, whereas the use of common resources gives rise to negative externalities.
c.
negative externalities, whereas the use of common resources gives rise to positive externalities.
d.
negative externalities, as does the use of common resources.
6.
Private decisions about consumption of common resources and production of public goods usually
lead to an
a.
efficient allocation of resources and external effects.
b.
efficient allocation of resources and no external effects.
c.
inefficient allocation of resources and external effects.
d.
inefficient allocation of resources and no external effects.
7.
When a good is excludable,
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.
no more than one person can use the good at the same time.
d.
everyone will be excluded from using the good.
8.
A good is excludable if
a.
one person's use of the good diminishes another person's enjoyment of it.
b.
the government can regulate its availability.
c.
it is not a normal good.
d.
people can be prevented from using it.
9.
Excludability is the property of a good whereby
a.
one person's use diminishes other peoples’ use.
b.
a person can be prevented from using it.
c.
the government rations the quantity of a good that is available.
d.
the resource is congestible.
10.
If people can be prevented from using a certain good, then that good is called
a.
rival in consumption.
b.
excludable.
c.
a common resource.
d.
a public good.
11.
Goods that are excludable include both
a.
club goods and public goods.
b.
public goods and common resources.
c.
common resources and private goods.
d.
private goods and club goods.
Public Goods and Common Resources 2743
12.
Goods that are not excludable include both
a.
private goods and public goods.
b.
club goods and common resources.
c.
common resources and public goods.
d.
private goods and club goods.
13.
Both public goods and common resources are
a.
rival in consumption.
b.
nonrival in consumption.
c.
excludable.
d.
nonexcludable.
14.
Both private goods and club goods are
a.
rival in consumption.
b.
nonrival in consumption.
c.
excludable.
d.
nonexcludable.
15.
Goods that are not excludable are usually
a.
higher priced than excludable goods.
b.
higher priced than rival goods.
c.
in short supply.
d.
free of charge.
16.
When something of value has no price attached to it,
a.
externalities will be present.
b.
production of the product has no cost.
c.
government should not intervene to produce the product.
d.
private companies will eventually produce the product, and the good will no longer be free.
17.
A view of a spectacular sunset along a private beach is an example of a
a.
private good.
b.
public good.
c.
nonrival but excludable good.
d.
rival but nonexcludable good.
18.
Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision
with 10 houses. The
land is an example of a good that is
a.
both rival in consumption and excludable.
b.
neither rival in consumption nor excludable.
c.
excludable, but not rival in consumption.
d.
rival in consumption, but not excludable.
19.
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.
20.
If one person's use of a good diminishes another person's enjoyment of it, the good is
a.
rival in consumption.
b.
excludable.
c.
normal.
d.
exhaustible.
21.
Goods that are rival in consumption include both
a.
club goods and public goods.
b.
public goods and common resources.
c.
common resources and private goods.
d.
private goods and club goods.
22.
Goods that are not rival in consumption include both
a.
private goods and common resources.
b.
club goods and public goods.
c.
common resources and public goods.
d.
private goods and club goods.
23.
A television broadcast is an example of a good that is
a.
private.
b.
not rival in consumption.
c.
social.
d.
normal.
24.
Goods that are rival in consumption but not excludable would be considered
a.
club goods.
b.
common resources.
c.
public goods.
d.
private goods.
25.
Goods that are rival in consumption and excludable would be considered
a.
club goods.
b.
common resources.
c.
public goods.
d.
private goods.
26.
Some goods can be either common resources or public goods depending on
a.
whether the good is rival in consumption.
b.
whether the good is excludable.
c.
the marginal cost of the good.
d.
None of the above is correct.
27.
If a road is congested, then use of that road by an additional person would lead to a
a.
negative externality.
b.
positive externality.
c.
Pigovian externality.
d.
free-rider problem with rush hour drivers stuck in traffic.
28.
Which of the following would not be considered a private good?
a.
a pair of scissors
b.
a pair of shoes
c.
an SUV
d.
cable TV service
29.
Which of the following would be considered a private good?
a.
a ferry boat ride to an island with open seating
b.
a public beach
c.
fish in the ocean
d.
a swimming suit
30.
Most goods in the economy are
a.
club goods.
b.
common resources.
c.
public goods.
d.
private goods.
31.
An example of a private good would be
a.
a library book.
b.
a rose garden.
c.
an internet radio subscription.
d.
a sleeping bag.
32.
The value and cost of goods are easiest to determine when the goods are
a.
private goods.
b.
public goods.
c.
common resources.
d.
club goods.
33.
Private goods are both
a.
excludable and nonrival in consumption.
b.
nonexcludable and rival in consumption.
c.
excludable and rival in consumption.
d.
nonexcludable and nonrival consumption.
34.
Which of the following goods is rival and excludable?
a.
an uncongested toll road
b.
an uncongested nontoll road
c.
a congested nontoll road
d.
a congested toll road
35.
Which of the following goods is rival in consumption and excludable?
a.
a DVD
b.
a movie in an empty theater
c.
an outdoor movie shown at a public park
d.
a movie shown on cable television.
36.
Which of the following goods is rival in consumption and excludable?
a.
a fireworks display
b.
national defense
c.
a box of sparklers
d.
a parade
37.
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
38.
Which of the following goods is both excludable and rival in consumption?
a.
a wristwatch
b.
fire protection in a small town
c.
fish in the ocean
d.
efforts to fight poverty
