CHAPTER 11 - Chapter11 PublicGoods andCommonResources 1....

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Chapter 11 Public Goods and Common Resources 1. Which of the following  is NOT a characteristic of a public good? a. It requires resources to produce. b. It is not diminished  or depreciated  as additional people consume  the good. c. Its benefits cannot be withheld  from anyone. d. It is a free good  with zero opportunity  cost. ANSWER: d It is a free good  with zero opportunity  cost. SECTION: 1 OBJECTIVE: 1 2. Which of the following  would  be the best example of a public good? a. a candy  bar b. a painting  by Monet c. a beautiful sunset d. a crowded  beach ANSWER: c a beautiful sunset SECTION: 1 OBJECTIVE: 1 3. To achieve the optimal provision of public goods the a. market should  be allowed  to find its equilibrium  without  government  intervention. b. government  must limit the provision of the goods. c. government  must tax producers of these goods. d. government  must either provide  the goods or subsidize their production. ANSWER: d government  must either provide  the goods or subsidize their production. SECTION: 1 OBJECTIVE: 1 4. Imagine a 2,000-acre park with picnic benches, trees, and  a pond. Suppose it is publicly owned,  and  people are invited  to enjoy its beauty. Of course, when  the weather  is nice it is difficult to find  parking, and  the trash cans overflow  with food wrappers  on summer  afternoons. Otherwise, it is a  great place. The park is a common  good  because a. when  trash cans overflow, a negative externality becomes a positive externality. b. it is not fenced to control access. c. if too many  people use it, one person’s use can prevent  others from using it. d. you have to drive to get there and  the automobile is a private good. ANSWER: c if too many  people us it, one person’s use can prevent  others from using it. SECTION: 1 OBJECTIVE: 1 5. Public goods are a. rival and  excludable. b. rival but excludable. c. nonrival but excludable. d. nonrival and  nonexcludable. ANSWER: d nonrival and  nonexcludable. SECTION: 1 OBJECTIVE: 1 63
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64   Chapter 11/Public Goods and Common Resources 6. Private goods are a. rival and  excludable. b. rival but excludable. c. nonrival but excludable. d. nonrival and  nonexcludable. ANSWER: a rival and  excludable. SECTION: 1
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CHAPTER 11 - Chapter11 PublicGoods andCommonResources 1....

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