In the town council example, building a traffic light costs 10,000 dollars. It would reduce the risk of a fatal accident from 1.6 to 1.1 percent. If the value of a human life is estimated at 10 million dollars, what is the expected benefit of the traffic light?

Question 7

Why does the government often provide public goods rather than the private market?

Question 8

An uncongested toll road is an example of what type of good?

Question 9

The case study 'Why the Cow Is Not Extinct' illustrates which key economic concept?

Question 10

According to the parable of the Tragedy of the Commons, why does the common grazing land get destroyed?

Question 11

Clean air and clean water are considered common resources because they are:

Question 12

In the case study about lighthouses, under what condition did some lighthouses in 19th-century England operate more like private goods?

Question 13

Why is performing a cost-benefit analysis for a public good, like a new highway, so difficult?

Question 14

Which statement best describes the difference between the problem of public goods and the problem of common resources?

Question 15

The ancient Greek philosopher Aristotle is quoted in the chapter to illustrate which concept?

Question 16

A congested road without a toll is an example of which type of good?

Question 17

Why do some economists advocate for 'congestion pricing' or 'variable tolling' on roads?

Question 18

According to Chapter 11, the conclusion from the 'importance of property rights' is that:

Question 19

In the town of Smalltown, with 500 residents, the total benefit of a fireworks display is 5,000 dollars and the cost is 1,000 dollars. The town council decides to pay for it by taxing each resident 2 dollars. What is the net benefit for each resident?

Question 20

A local drama company's theater creates a negative externality of 5 dollars per ticket due to traffic and a positive externality of 2 dollars per ticket due to improved street safety. To achieve an efficient outcome, what policy should the government implement?

Question 21

Which of the following is NOT one of the important common resources discussed in the chapter?

Question 22

If four roommates are considering renting a movie for 8 dollars, and their individual willingness to pay for a third movie is 5, 3, 1, and 0 dollars respectively, should they rent the third movie to maximize total surplus?

Question 23

The main lesson from the Tragedy of the Commons is that common resources tend to be:

Question 24

Which of the following is an example of a government policy intended to solve the problem of a common resource?

Question 25

Fire protection is considered a club good in a small town if:

Question 26

In the town of Wiknam from the end-of-chapter problems, a fisherman's daily catch is X = 6 - N, where N is the number of residents fishing. Farmed fish are not a common resource. If the town's Freedom Party allows individuals to choose freely, how many residents will choose to fish in the lake?

Question 27

Why is the government's role in 'fighting poverty' sometimes argued to be a public good?

Question 28

The problem with common resources can be viewed as a negative externality because:

Question 29

Which of the following is NOT a policy solution for the Tragedy of the Commons mentioned in the chapter?

Question 30

The four categories of goods outlined in Figure 1 are:

Question 31

According to the text, why might basic scientific research be underfunded by the private market?

Question 32

If a town council is considering a public project, why is simply asking residents how much they value it an unreliable method for cost-benefit analysis?

Question 33

In the 'In the News' article 'The Case for Toll Roads,' what economic problem is congestion pricing designed to solve?

Question 34

An ice-cream cone is an example of a:

Question 35

The Tragedy of the Commons can be avoided if:

Question 36

If a new startup company develops a new, more efficient method for solar power generation, this new knowledge could be considered to have a positive externality because:

Question 37

In the town of Wiknam, the efficient number of fishermen is 2, which yields a total catch of 12 fish (4 from farming, 8 from the lake). The free-market outcome is 4 fishermen, yielding a total catch of 10 fish (2 from farming, 8 from the lake). To achieve the efficient outcome, what corrective tax T on fishing should be imposed?

Question 38

Why do governments use tax revenue to fund antipoverty programs like food stamps?

Question 39

If a wireless, high-speed internet service at an airport is free but becomes slower as more people use it, it has transformed from a _____ to a _____.

Question 40

What is the general lesson of the parable of the Tragedy of the Commons?

Question 41

In the town council example, if the cost of the traffic light was 60,000 dollars instead of 10,000 dollars, what would a cost-benefit analysis conclude?

Question 42

According to the chapter, why do private firms typically not spend much on basic research compared to applied research?

Question 43

The enclosure movement in 17th-century England is an example of:

Question 44

If a good is rival in consumption and excludable, it is a:

Question 45

If a good is non-rival in consumption and non-excludable, it is a:

Question 47

A town park is a common resource when it is congested because:

Question 48

The two main problems that prevent an easy solution to the overuse of oceans as a common resource are:

Question 49

In the town of Smalltown, 500 residents are considering a fireworks display. If the cost is 1,200 dollars and each resident values the display at 2 dollars, what is the efficient decision?

Question 50

What is the primary reason that a market with a common resource, like an unregulated fishery, leads to an inefficient outcome?