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Test Canvas : TestBanks Chapter 17: Public Goods and Com m on Resources
Microeconom ics, 3e
Test Canvas: TestBanks Chapter 17: Public Goods and Common
Resources
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1. True/False: A ticket to a concert is excludable i...
Question A ticket to a concert is excludable if the concert hall can prevent people who do not
have a ticket from entering.
2. True/False: Airplane seats are rival in consumption.
Question Airplane seats are rival in consumption.
3. True/False: A good is excludable if nonpayers can...
Question A good is excludable if nonpayers can be prevented from consuming it.
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4. True/False: Goods are said to be “rival in ...
Question Goods are said to be “rival in consumption” because they are substitutes in
consumption, e.g., coffee and tea, or road travel and air travel.
5. True/False: Any road without a toll can be though...
Question Any road without a toll can be thought of as a common resource, since it is
nonexcludable and rival in consumption.
6. True/False: In a market economy, goods that are n...
Question In a market economy, goods that are nonexcludable will be produced at inefficiently
low levels (if they are produced at all), while goods that are excludable but nonrival
in consumption will suffer from inefficiently low consumption levels.
7. True/False: In a market economy, goods that are n...
Question In a market economy, goods that are nonrival in consumption are subject to
inefficiently low production.
8. True/False: A public good is one that is generall...
Question A public good is one that is generally available for consumption by the public; that
is, a person does not have to be a member of a special group or a club to be able
to consume it. A good example would be milk for sale in a grocery store that is
open to the public.
9. True/False: For a public good, the marginal socia...
Question For a public good, the marginal social benefit will be higher than any individual's
marginal benefit of consumption.
10. True/False: The efficient level of provision of a...
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Question The efficient level of provision of a public good is the level at which its marginal
social benefit is equal to the marginal cost of its production.
11. True/False: The problem with public goods is simi...
Question The problem with public goods is similar to the problem with positive externalities:
the marginal social benefit exceeds any individual's marginal benefit.
12. True/False: For a public good, the marginal socia...
Question For a public good, the marginal social benefit is the horizontal summation of each
individual's marginal benefit curve.
13. True/False: A low voter turnout in an election ca...
Question A low voter turnout in an election can be explained by noting that political action is
a public good and people who don't vote get a free ride.
14. True/False: A city government engages in cost-ben...
Question A city government engages in cost-benefit analysis when it estimates the social
costs and social benefits to provide trash collection services.
15. True/False: Since individuals ignore the effect t...
Question Since individuals ignore the effect their use has on the amount of a resource
remaining for others, common resources suffer from overuse when left to the private
market.
16. True/False: To ensure efficient use of a common r...
Question To ensure efficient use of a common resource, the government could assign
property rights.
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17. True/False: Artificially scarce goods are ineffic...
Question Artificially scarce goods are inefficiently consumed because the market price is
zero.
18. True/False: Pay-per-view movies are an example of...
Question Pay-per-view movies are an example of a common resource.
19. True/False: The efficient price for a good that i...
Question The efficient price for a good that is nonrival in consumption is necessarily greater
than zero.
20. True/False: When a good is nonrival in consumptio...
Question When a good is nonrival in consumption, it means the marginal cost of any
individual's consumption is zero.
21. Multiple Choice: Which of the following is an example ...
Question Which of the following is an example of a nonexcludable good?
22. Multiple Choice: Which of the following goods best fit...
Question Which of the following goods best fits the characteristics of a private good?
Answer a professor giving a lecture in a large classroom
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23. Multiple Choice: A(n) ________ is excludable and rival...
Question A(n) ________ is excludable and rival in consumption.
24. Multiple Choice: When Joe watched a television movie, ...
Question When Joe watched a television movie, his viewing was ________ in consumption
because other people ________ able to view the movie at the same time Joe did.
25. Multiple Choice: A good is most likely to be artificia...
Question A good is most likely to be artificially scarce if:
Answer it is nonexcludable and nonrival.
26. Multiple Choice: Which of the following goods is most ...
Question Which of the following goods is most likely a common resource?
Answer the Super Bowl
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27. Multiple Choice: Which of the following goods is most ...
Question Which of the following goods is most likely an artificially scarce good?
Answer tickets to a boxing match
28. Multiple Choice: Television programs are nonrival beca...
Question Television programs are nonrival because:
Answer the supplier cannot prevent consumption by people who do not pay for it.
29. Multiple Choice: Clean water in a river is nonexcludab...
Question Clean water in a river is nonexcludable because:
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30. Multiple Choice: Which of the following goods best fit...
Question Which of the following goods best fits the characteristics of a private good?
Answer national defense
31. Multiple Choice: A private good is:
Question A private good is:
32. Multiple Choice: Which of the following goods is most ...
Question Which of the following goods is most likely a public good?
33. Multiple Choice: A(n) ________ is nonexcludable and no...
Question A(n) ________ is nonexcludable and nonrival in consumption.
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34. Multiple Choice: A public good is a good or service fo...
Question A public good is a good or service for which exclusion is:
Answer possible and which is rival in consumption.
35. Multiple Choice: A private good is a good or service f...
Question A private good is a good or service for which exclusion is:
36. Multiple Choice: A common resource is a good or servic...
Question A common resource is a good or service for which exclusion is:
Answer possible and which is rival in consumption.
37. Multiple Choice: An artificially scarce good is a good...
Question An artificially scarce good is a good or service for which exclusion is:
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38. Multiple Choice: Whether or not they pay for them, peo...
Question Whether or not they pay for them, people cannot be excluded from receiving the
benefits of:
39. Multiple Choice: An example of a public good is:
Question An example of a public good is:
40. Multiple Choice: The best example of a private good is:
Question The best example of a private good is:
41. Multiple Choice: The best example of a public good is:
Question The best example of a public good is:
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42. Multiple Choice: The best example of an artificially s...
Question The best example of an artificially scarce good is:
Answer legal services.
43. Multiple Choice: The best example of a common resource...
Question The best example of a common resource is:
Answer public education.
44. Multiple Choice: A whale is a common resource because ...
Question A whale is a common resource because the private market ________ prevent
consumption by people who do not pay for it, and the same unit ________ be
consumed by more than one person at the same time.
Answer can; can
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45. Multiple Choice: An electronic book is an artificially...
Question An electronic book is an artificially scarce good because the private market
________ prevent consumption by people who do not pay for it. Further, the same
e-Book ________ be consumed by more than one person at the same time.
46. Multiple Choice: If a good has a marginal cost of prod...
Question If a good has a marginal cost of production of zero and an inefficiently low level of
consumption, the good must be a(n):
Answer private good.
47. Multiple Choice: If the market produces an efficient l...
Question If the market produces an efficient level of a good, then we know that the good
must be ________ and ________ in consumption.
Answer nonexcludable; nonrival
48. Multiple Choice: Although most citizens have access to...
Question Although most citizens have access to police protection, they also take measures,
such as putting locks on their doors, to protect themselves. We can explain this
because police protection is a(n) ________ good, while self-protection is a(n)
________ good.
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49. Multiple Choice: Which of the following is an example ...
Question Which of the following is an example of a private good?
Answer traffic lights
50. Multiple Choice: Stephanie stops at a gas station to f...
Question Stephanie stops at a gas station to fill up the tank of her car. The gallons of
unleaded gasoline in her tank are best described as:
51. Multiple Choice: DeVonda owns a music store. One night...
Question DeVonda owns a music store. One night, vandals broke her store's front window.
DeVonda called the police, and the police investigated the crime. The police
services that DeVonda used are best described as:
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52. Multiple Choice: Josh has an iPhone and frequently dow...
Question Josh has an iPhone and frequently downloads songs from the iTunes website. He
pays a small fee for each download, but downloading a song does not remove it
from the iTunes inventory. Other consumers can also pay the fee and download a
song that Josh might have already accessed. The iTunes service is best described
as:
53. Multiple Choice: Wenqin lives in a city that has a hug...
Question Wenqin lives in a city that has a huge public rose garden. Residents can stroll
through the rose garden, enjoy the scenic vistas, or have a picnic, all without
paying a fee. The public rose garden is a good that is best described as:
54. Multiple Choice: Bluefin tuna travel in schools throug...
Question Bluefin tuna travel in schools throughout the world's oceans. Fishing boats from
many nations harvest bluefin tuna as the schools migrate through their national
waters. The schools of bluefin tuna are best described as:
55. Multiple Choice: As a big music fan, you want to atten...
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Question As a big music fan, you want to attend a weekend blues festival in your town. The
purchase of a wristband gives you and thousands of other fans access to the
outdoor concert pavilion. The blues festival is a good that has the characteristics of
being:
56. Multiple Choice: Public goods differ from common resou...
Question Public goods differ from common resources in that:
57. Multiple Choice: The best example of a good whose cons...
Question The best example of a good whose consumption is excludable in consumption is:
58. Multiple Choice: When comparing the characteristics of...
Question When comparing the characteristics of common resources and artificially scarce
goods, we find that:
Answer they are both nonrival in consumption.
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59. Multiple Choice: National defense and clean air are si...
Question National defense and clean air are similar in that both are ________, but they differ
in that national defense is ________ while clean air is not.
60. Multiple Choice: National defense and ebooks are simil...
Question National defense and ebooks are similar in that both are ________, but they differ
in that national defense is ________ while ebooks are not.
Answer rival in consumption; excludable
61. Multiple Choice: An artificially scarce good is simila...
Question An artificially scarce good is similar to a public good in that it is ________, but it is
also similar to a private good in that it is ________.
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62. Multiple Choice: An e-Book is similar to a published b...
Question An e-Book is similar to a published book in that it is ________, but it is also similar
to national defense in that it is ________.
Answer rival in consumption; nonexcludable
63. Multiple Choice: A software program is similar to an a...
Question A software program is similar to an apple in that it is ________, but it is also
similar to public safety in that it is ________.
Answer rival in consumption; nonexcludable
64. Multiple Choice: If left to the private market, the am...
Question If left to the private market, the amount of police protection provided in a city would
be ________ than it is now, and free riders would pay ________ for police
protection.
Answer more; more
65. Multiple Choice: For a good to be efficiently provided...
Question For a good to be efficiently provided by the private market, which of the following is
essential?
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Answer It is rival in consumption.
66. Multiple Choice: An individual is more likely to be a ...
Question An individual is more likely to be a free rider when a good is:
Answer private.
67. Multiple Choice: The free-rider problem is a direct re...
Question The free-rider problem is a direct result of:
68. Multiple Choice: The tendency of people or firms to co...
Question The tendency of people or firms to consume a public good without paying for it is
called the ________ problem.
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69. Multiple Choice: When the market does not result in an...
Question When the market does not result in an efficient allocation of scarce resources,
economists say there has been ________.
70. Multiple Choice: An inefficient allocation of resource...
Question An inefficient allocation of resources will occur when:
71. Multiple Choice: When the allocation of resources is s...
Question When the allocation of resources is such that a different allocation would increase
society's welfare, economists say:
72. Multiple Choice: If a good is subject to the free-ride...
Question If a good is subject to the free-rider problem and an inefficiently low level of
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73. Multiple Choice: If a good is subject to the free-ride...
Question If a good is subject to the free-rider problem and an inefficiently high level of
consumption, the good must be a(n):
74. Multiple Choice: If left to the private market, the am...
Question If left to the private market, the amount of fire protection provided in a city would be
________ than it is now, and free riders would pay ________ for fire protection.
75. Multiple Choice: You work in an office and one of your...
Question You work in an office and one of your co-workers has announced his retirement.
You have offered to purchase the retirement gift, so you place a collection jar in the
lunch room for anonymous donations to help pay for the gift. After a week you find
that very few dollars are in the jar, so you end up paying for a large share of the
retirement gift. You are the victim of the:
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76. Multiple Choice: Most neighborhood streets are illumin...
Question Most neighborhood streets are illuminated at night by streetlights. The streetlights
are ________ and ________. Therefore, they are likely to be ________ by the
competitive market.
77. Multiple Choice: The tendency of people to avoid payin...
Question The tendency of people to avoid paying for a good's benefits when the benefits can
be obtained free is called the:
78. Multiple Choice: The free-rider problem refers to:
Question The free-rider problem refers to:
79. Multiple Choice: For a nonrival good like pay-per-view...
Question For a nonrival good like pay-per-view television programs, the private market will
lead to:
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