1. The efficient price of a license fee is determined by the difference between ...
A. Marginal revenue and marginal cost
B. Average revenue and marginal cost
C. Total revenue and total cost
D. Average revenue and total cost
E. Total revenue and marginal cost
2. Which one of the following statements is false?
A. The economically optimal level of production is less than the open-access equilibrium level of production
B. The economically optimal level of production occurs at the maximum sustainable yield
C. Charging a license fee for access to a common resource will reduce the production level below the open-access equilibrium
D. The “tragedy of the commons” is more likely to occur as production effort increases
E. A license fee will reduce the incentives for entry into a market
3. Which one of the following is least likely to be considered a public good?
A. An interstate highway
B. A national park
C. Wildlife
D. A river
E. A golf course
4. A characteristic of public goods is that use of the good by one person does not reduce its availability to others. The term for this characteristic is...
A. Non-exclusive
B. Transferable
C. Non-rival
D. Perfectly elastic
E. Free-rider
5. The two characteristics of a public good are:
A. Non-rival and inelastic
B. Non-exclusive and non-priced
C. Non-rival and non-priced
D. Non-exclusive and inelastic
E. Non-rival and non-exclusive
6. Which one of the following statements about public goods is true?
A. Problems with public goods can always be solved by charging a fee to use the good
B. Public goods may provide psychic benefits
C. Public goods will tend to be oversupplied
D. Money to provide public goods is commonly collected from free riders
E. Public goods are any goods owned or provided by governments
7. Suppose that 10,000 people are willing to spend a maximum of $20 each to preserve one acre of rainforest. A conservation group mails out a request to each person asking him or her to mail in $40 to preserve one acre of rainforest. How many acres of rainforest will be preserved with this program?
A. Zero acres
B. 1,000 acres
C. 5,000 acres
D. 10,000 acres
E. There is not enough information to answer the question
8. If 10,000 people are willing to spend a maximum of $20 each to preserve one acre of rainforest, how many acres of rainforest could be preserved, at $40 per acre without exceeding people’s willingness to pay?
A. Zero acres
B. 1,000 acres
C. 5,000 acres
D. 10,000 acres
E. There is not enough information to answer the question
9. The socially optimal provision of a public good can be obtained by ...
A. Privatizing the good
B. Vertically adding the demand curves for the good
C. Horizontally adding the demand curves for the good
D. Eliminating access to the good
E. Allowing open access to the good
11. Which one of the following goods can be considered a global commons?
A. A National Park
B. A river
C. An ocean
D. A herd of deer
E. A diamond mine
12. The “tragedy of the commons” is most likely to occur with which one of the following goods?
A. A national forest
B. A mineral ore deposit
C. A public highway
D. A groundwater aquifer
E. A city park
13. The term tax incidence refers to...
a) whether buyers or sellers of a good are required to send tax payments to the government.
b) whether the demand curve or the supply curve shifts when the tax is imposed.
c) the distribution of the tax burden between buyers and sellers.
d) widespread view that taxes(and death) are the only certainties in life.