Quiz on Public Goods and Resources

A textbook is a _____ .

• private good and the knowledge that one gains from reading the book is a common resource

• private good and the knowledge that one gains from reading the book is a public good

• common resource and the knowledge that one gains from reading the book is a private good

• common resource and the knowledge that one gains from reading the book is a public good

A view of a spectacular sunset along a private beach is an example of a _____ .

• private good

• public good

• rival but nonexcludable good

• nonrival but excludable good

For private goods allocated in markets, ____

• prices guide the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources

• the government guides the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources

• the government guides the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources

• prices guide the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources

Which of the following goods is the best example of a public good?

• music that is broadcast over the airwaves by a privately-owned FM radio station

• cable TV services that are provided by a privately-owned firm that is regulated by the government of the city in which it operates

• electricity that is provided to farmhouses by a rural electric cooperative

• garbage-collection services that are provided by a municipal government

Without government intervention, public goods tend to be _____ .

• overproduced and common resources tend to be underconsumed

• underproduced and common resources tend to be overconsumed

• overproduced and common resources tend to be overconsumed

• underproduced and common resources tend to be underconsumed

Which of the following is an example of the free-rider problem?

• Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care.

• Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale

• Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking.

• Alfred receives a free lunch from the local 'Meals on Wheels' program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch.

Which of the following statements is correct?

• In the context of public goods, the Coase theorem implies that total surplus in some markets can be improved by the elimination of property rights.

• The absence of property rights sometimes gives rise to market failure.

• Government regulation of private behavior, in response to market failure, can never improve social well-being.

• The establishment of property rights sometimes gives rise to market failure.

Which of the following statements is not correct?

• Uncongested toll roads are examples of club goods.

• Common resources are rival in consumption but are not excludable.

• When African elephants were privatized, the survival of the species deteriorated.

• National defense is not rival in consumption, nor is it excludable.

If a road is congested, then use of that road by an additional person would lead to a _____ .

• negative externality

• free-rider problem with rush hour drivers stuck in traffic

• Pigovian externality

• positive externality

Markets do not ensure that the air we breathe is clean because _____ .

• clean air has no value

• clean air is impossible to produce

• property rights are not well established for clean air

• the government prevents markets from doing so