31.WhenRickusesacommonresourceanddiminishesotherpeople’senjoymentofit,hecreates
a.afreeriderproblem.
b.anexternality.
c.anonrenewableresource.
d.generalknowledge.
32.ThreebusinesspeoplemeetforlunchatanIndianrestaurant.Theydecidethateachpersonwillorderanitemoffthemenu,andtheywillsharealldishes.Theywillsplitthecostofthefinalbillevenlyamongeachofthepeopleatthetable.Whenthefoodisdeliveredtothetable,eachpersonfacesincentivessimilartothe
a.consumptionofacommonresourcegood.
b.productionofapublicgood.
c.consumptionofaclubgood.
d.productionofaprivategood.
33.FourfriendsdecidetomeetataChineserestaurantfordinner.Theydecidethateachpersonwillorderanitemoffthe menu,andthey willsharealldishes. Theywillsplitthe costofthefinal billevenlyamong eachofthepeople atthetable.ATragedyoftheCommonsproblemislikelyforeachofthefollowingreasonsexcept
a.eachpersonhasanincentivetoeatasfastaspossiblesincetheirindividualrateofconsumptionwillnotaffecttheirindividualcost.
b.thereisanexternalityassociatedwitheatingthefoodonthetable.
c.whenonepersoneats,hemaynottakeintoaccounthowhischoiceaffectshisfriends.
d.eachdishwouldbebothexcludableandrivalinconsumption.
34.Aneighborhoodvotedtodevelopavacantlotintoavegetablegarden.Alloftheneighborsworkedthelandandsowedtheseeds.Afewneighborspickedandatetheproducebeforetheotherneighborshadachance.WhichofthefollowingcouldsolvethisexampleoftheTragedyoftheCommons?
a.Theneighborhooddividesthelotintoequalsizeplotsandeachfamilycanplantandharvestonlyontheirplot.
b.Theneighborhoodcontinuestoworkthelandandsowtheseedsasagroup,butsellsalloftheproducetowillingbuyersandreinveststheproceedsintothegardenforthenextyear.
c.Theneighborhooddecidestostopgardeningonthislandbecausethereisnoequitablewaytoallocatetheproduce.
d.BothaandbarepossiblesolutionstothisexampleoftheTragedyoftheCommons
35.TheOgallalaaquiferisalargeundergroundpooloffreshwaterunderseveralwesternstatesintheUnitedStates.
a.overtime,theaquiferislikelytobeoverused.
b.eachfarmerhasasufficientincentivetoconservethewater.
c.stategovernmentshaveanincentivetoinsurethattheirfarmersdonotoverusethewater.
d.resourceswouldbeusedmoreefficientlyifthegovernmentpaidforthepumpsfarmersusetogetthewater.
36.TheOgallalaaquiferisalargeundergroundpooloffreshwaterunderseveralwesternstatesintheUnitedStates.Anyfarmerwithlandabovetheaquifercanatpresentpumpwateroutofit.Whichofthefollowingstatementsabouttheaquiferiscorrect?
a.Theaquiferisapublicgoodwhichmustbepubliclyownedtobeusedefficiently.
b.Theaquiferisaprivategoodwhichmustbeprivatelyownedtobeusedefficiently.
c.Theaquiferisacommonresourcewhichwillbeoverusedifnooneownsit.
d.Theaquiferisaclubgoodwhichshouldbeleftasitis.
37.Onholidayweekendsthousandsofpeoplepicnicinstateparks.Somepicnicareasbecomesoovercrowdedthebenefitorvalueofpicnickingdiminishestozero.Anovercrowdedpicnicareaisanexampleof
a.aprivategood.
b.aclubgood.
c.aTragedyoftheCommons.
d.publicgood.
38.Thedegradationoftheenvironmentfromlitterisa
a.anegativeexternality.
b.freeriderproblem.
c.TragedyoftheCommons.
d.Bothaandcarecorrect.
39.Thesignonachurchinyourneighborhoodreads“AllarewelcomeatSundayService.”Becausethechurchhaslimitedseatingandisusuallyfull,theSundayServiceis
a.aprivategood.
b.apublicgood.
c.aclubgood.
d.acommonresource.
40.ANewYorklegislatorwantedtocreateadepositoncigarettesbutts.Ifimplemented,peoplewouldhavetheincentiveto(1)nottosscigarettebuttsontopublicstreetsandsidewalks,and(2)pickbuttsuptoredeemthemforthecash.Thedegradationoftheenvironmentfromlitteredcigarettebuttsisa
a.privategoodsproblem.
b.Nashequilibrium.
c.TragedyoftheCommons.
d.cost-benefitequilibrium.
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