Question :
11.3 Common Resources
1) In which of the following cases does : 1241078
11.3 Common Resources
1) In which of the following cases does the tragedy of the commons occur?
i.cattle grazing on private ranches
ii.catching lobsters off the coast of Florida
iii.raising salmon on salmon farms
iv.using legal services provided by the courts
A) i only
B) ii only
C) ii and iii
D) i and iv
E) i and iii
2) The tragedy of the commons arises because ________ exceeds ________ when the resource is used.
A) marginal social benefit; marginal private benefit
B) marginal social cost; marginal private cost
C) marginal social benefit; marginal private cost
D) marginal private cost; marginal private benefit
E) marginal private cost; marginal social cost
3) Which of the following applies to the tragedy of the commons and a common resource?
i.In the absence of government action, there are no incentives to prevent the overuse of the common resource.
ii.When consumers take account of the marginal social benefit and marginal cost, overuse of the common resource occurs.
iii.Even with government action, it is impossible to achieve the efficient level of use of a common resource.
A) i only
B) i and ii
C) ii and iii
D) i, ii, and iii
E) ii only
4) For a common resource, it is the case that
A) MSC > MC
B) MSC < MC
C) MSB > MB
D) MB > MSB
E) None of the above answers is correct.
5) For a common resource, the marginal private benefit of the resource is
A) greater than the marginal social benefit.
B) equal to the marginal social benefit.
C) less than the marginal social benefit.
D) not comparable to the marginal social benefit.
E) not defined because the resource is nonexcludable.
6) To achieve the efficient amount of use of a common resource, the use should be such that ________ equals ________.
A) marginal social cost; marginal private cost
B) marginal social cost; marginal social benefit
C) marginal private benefit; marginal cost
D) marginal cost; marginal benefit
E) marginal social benefit; marginal private cost
7) A common resource is used efficiently if
A) the output is maximized.
B) marginal social benefit equals marginal social cost.
C) marginal private benefit equals marginal cost.
D) marginal social benefit is maximized.
E) only the excess of the resource is utilized.
8) One way to overcome the tragedy of the commons is to
A) assign property rights so that someone owns the resource.
B) take away property rights so that no one owns the resource.
C) leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used.
D) educate people in order to overcome the problem of rational ignorance.
E) None of the above answers is correct.
9) A government policy that can lead to the efficient use of a common resource is
A) a tax.
B) a production quota.
C) an emission fee.
D) a price ceiling.
E) None of the above answers is correct.
10) When a production quota is used to remedy the tragedy of the commons, then
A) the quota is set so that use of the resource is where marginal private benefit equals marginal private cost.
B) the quota is set so that use of the resource is where marginal private benefit equals marginal social benefit.
C) the market equilibrium, but not the efficient outcome, is achieved.
D) users of the resource have an incentive to cheat on the quota.
E) previous users of the resource are given the incentive to avoid use of the resource.
