Question :
51) Refer to Figure 16-3. Assume there two types of : 1384310
51) Refer to Figure 16-3. Assume there are two types of firms in this region – beekeepers that produce honey and orchard keepers that produce peaches. The bees provide a benefit to the orchard keepers by pollinating their peach trees. If represents the social marginal benefit of honey, the external benefit associated with producing one unit of honey is
A) $1.
B) $2.
C) $3.
D) $4.
E) $5.
52) Refer to Figure 16-3. Assume there are two types of firms in this region – beekeepers that produce honey and orchard keepers that produce peaches. The bees provide a benefit to the orchard keepers by pollinating their peach trees. If the external marginal benefit is $4 per unit of honey, then what is the allocatively efficient output?
A) 40 kg
B) 60 kg
C) 80 kg
D) 100 kg
E) 120 kg
53) An example of a common-property resource is
A) a congested toll highway.
B) a national park with an entrance fee.
C) privately owned ranch land.
D) a sport-fishing river in BC.
E) privately owned cattle grazing land in Alberta.
54) Which of the following best describes the reason for over fishing in Canadian offshore fisheries?
A) Fishing has depleted fish stocks leading to smaller catches.
B) The private marginal cost incurred by current fishermen is less than the social marginal cost.
C) The private marginal cost incurred by future generations of fishermen is greater than the private marginal cost incurred by current fishermen.
D) The Canadian government encourages foreign fishing within the Canadian offshore boundary.
E) None of the above can explain overfishing.
55) An example of a rivalrous good is
A) toxic emissions from a factory smokestack.
B) an empty toll highway.
C) an uncrowded beach.
D) a visit to the dentist.
E) the weather forecast.
56) Consider an ordinary rivalrous good, provided in a competitive market. At the socially optimal level of provision of this good, the marginal
A) cost of production of this good is zero.
B) cost of production of the last unit of the good is equal to the consumers’ marginal willingness to pay.
C) sacrifice society needs to make to supply the last unit of the good is more than each consumer’s marginal willingness to pay.
D) cost of production of the last unit of the good is more than all consumers’ combined marginal willingness to pay.
E) cost of production of the last unit of the good is equal to all consumers’ combined marginal willingness to pay.
57) Consider a non-rivalrous good, like national defence, provided by the government. At the socially optimal level of provision of this good, the marginal
A) cost of production of this good is zero.
B) cost of production of the last unit of the good is equal to the consumers’ marginal willingness to pay.
C) sacrifice society needs to make to supply the last unit of the good is more than each consumer’s marginal willingness to pay.
D) cost of production of the last unit of the good is more than all consumers’ combined marginal willingness to pay.
E) cost of production of the last unit of the good is equal to all consumers’ combined marginal willingness to pay.
58) The price charged for access to an uncongested, excludable non-rivalrous good should be ________ because ________.
A) positive; consumers receive a positive marginal benefit from consuming the good
B) positive; marginal cost and marginal benefit for this good are both positive
C) positive; more than one person can consume this good at the same time
D) zero; it is inefficient to exclude people from consuming this good once it has been supplied
E) zero; the marginal benefit of the last unit consumed is zero
59) Which of the following best explains why it is sometimes efficient to charge a positive price for the use of some products such as museums, beaches, and roads?
A) Since these products are non-excludable, it is sometimes efficient to charge a positive price.
B) Once these products become congested they become rivalrous, marginal cost is positive, and a positive price is then efficient.
C) Each person consuming the product has a positive marginal benefit and should therefore pay a positive price.
D) Since these products are excludable, marginal cost is always positive, and a positive price is appropriate.
E) Since these products are excludable and non-rivalrous, it is always efficient to charge a positive price.
60) Why might it be economically efficient to offer access to an uncongested art gallery or museum at a price of zero?
A) because they are non-rivalrous and non-excludable and therefore should be provided at a price of zero
B) because the marginal benefit received by the visitor is zero, and marginal benefits and marginal cost should be equal
C) because the marginal cost of providing access to one more visitor is zero, while the visitor has a positive marginal benefit
D) because it is good for society if more people visit art galleries and museums
E) because they are public goods, which would not be provided by the free market
