[i]. Determining the appropriate level of government support for expanding general knowledge;a. is determined by demand and supply.;b. is accurately determined by Congress.;c. can be easily measured by determining the amount where benefits equal cost.;d. is difficult since benefits are hard to measure.;[ii]. Advocates of antipoverty programs claim that fighting poverty;a. is most successfully done by charities.;b. is a public good.;c. can be done efficiently by the market system.;d. should not be done with tax dollars.;[iii]. Advocates of antipoverty programs believe that fighting poverty;a. can make everyone better off.;b. is most successfully done by charities.;c. can be done efficiently by the market system.;d. should not be done with tax dollars.;[iv]. Assuming that everyone prefers to live in a society without poverty, people who do not donate to private charity;a. receive no external benefit from private antipoverty programs.;b. decrease the reliance of individuals on antipoverty programs.;c. free ride on the generosity of others.;d. are most likely to be in favor of government-sponsored programs.;[v]. If everyone benefits from helping the poor;a. taxing the wealthy to raise living standards of the poor can potentially make everyone better off.;b. eliminating taxes aimed at redistributing income will necessarily make rich people better off.;c. government intervention can only make things worse.;d. private markets can adequately provide charity programs to help the poor despite free-rider problems.;[vi]. Most lighthouses are operated by the government because;a. of the free-rider problem.;b. lighthouses are no longer valued by society.;c. most lighthouses are only tourist attractions in state and national parks.;d. shipping companies would not be able to afford lighthouse upkeep.;[vii]. A lighthouse is typically considered a good example of a public good because;a. the owner of the lighthouse is able to exclude beneficiaries from enjoying the lighthouse.;b. there is rarely another lighthouse nearby to provide competition.;c. a nearby port authority cannot avoid paying fees to the lighthouse owner.;d. all passing ships are able to enjoy the benefits of the lighthouse without paying.;[viii]. Private markets usually fail to provide lighthouses because;a. lighthouses cost too much to build relative to their benefits.;b. government intervention makes it hard for private lighthouse owners to compete in the market.;c. ship captains have incentives to use lighthouses without paying.;d. lighthouses are valued very little by ship captains these days.;[ix]. A lighthouse might be considered a private good if;a. there is a second lighthouse nearby, thus preventing a monopoly.;b. the owner of the lighthouse is able to exclude beneficiaries from receiving the benefits of the lighthouse.;c. ships are able to enjoy the benefits of the lighthouse without paying for the benefit.;d. a nearby port authority is able to avoid paying any fees to the lighthouse owner.;[x]. In deciding whether something is a public good, one must determine the;a. number of beneficiaries.;b. value of external benefits which accrue to resource owners.;c. excludability of the beneficiaries.;d. All of the above are correct.;e. Both a and c are correct.;[xi]. The free-rider problem is worse if;a. the government refuses to provide the product.;b. the number of beneficiaries is large.;c. private markets can provide the rival good.;d. the number of provisions is small.;[xii]. A lighthouse that primarily benefits a single port owner is more like a;a. public good.;b. natural monopoly.;c. private good.;d. common resource.;[xiii]. Suppose that Martin owns a lighthouse and Lewis owns a nearby port. Martin?s lighthouse benefits only those ships that enter Lewis?s port. Which of the following statements is NOT true?;a. Martin?s lighthouse may be considered a private good.;b. Martin can combat the free-rider problem by charging Lewis a usage fee.;c. Martin can exclude Lewis?s port from benefiting from the lighthouse by simply turning the power off.;d. Martin?s lighthouse would be considered a common resource.;[xiv]. When the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a;a. fiscal analysis.;b. monetary analysis.;c. welfare analysis.;d. cost-benefit analysis.;[xv]. A cost-benefit analysis of a highway is difficult to conduct because analysts;a. cannot estimate the explicit cost of a project that has not been completed.;b. are unlikely to have access to costs on similar projects.;c. are not able to consider the opportunity cost of resources.;d. do not have a price with which to judge the value of the highway.;[xvi]. The value and cost of goods provided in an economy are easier to determine when those goods are;a. private goods.;b. public goods.;c. common resources.;d. natural monopolies.;[xvii]. Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because;a. those who stand to gain have an incentive to tell the truth.;b. those who stand to lose have an incentive to exaggerate their true costs.;c. answers to the survey questions will always be downwardly biased.;d. not everyone asked will be using the highway.;[xviii]. The government provides public goods because;a. private markets would not produce any of the good.;b. private markets would not produce the efficient quantity of the good.;c. private markets would charge too high a price for the good.;d. the government produces public goods more efficiently than private markets can.;[xix]. Before considering any public project the government should;a. compare the total cost and total benefits of the project.;b. conduct a cost-benefit analysis.;c. allow citizens to determine which projects are most valuable to them.;d. All of the above are correct.;e. Both a and b are correct.;[xx]. The greatest difficulty with cost-benefit analysis of a public project is determining;a. whether government revenue is sufficient to cover the cost of the project.;b. who to award the project contract to.;c. the cost of the project.;d. the value or benefit of the project.;[xxi]. Externalities are present in a market whenever;a. a shortage exists.;b. the price is higher than equilibrium price.;c. private costs differ from social costs.;d. the seller is not making a profit.;[xxii]. Because of the free-rider problem, respondents to cost-benefit surveys;a. are unable to evaluate the effect of the project on their personal satisfaction.;b. are typically not benefited directly by government projects.;c. have a difficult time identifying explicit costs.;d. have little incentive to tell the truth.;[xxiii]. Each of the following explain why cost-benefit analysis is difficult EXCEPT;a. there is no price with which to judge the value of a public good.;b. surveys are often biased and unreliable.;c. it is difficult to identify all factors that influence costs and benefits of public goods.;d. government projects rarely have sufficient funding to complete projects on time.;[xxiv]. To increase safety at a bad intersection, you must decide whether to install a traffic light in your hometown at a cost of $10,000. If the traffic light reduces the risk of fatality by 0.5 percent and the value of a human life is about $10 million, you should;a. install the light because the expected benefit of $50,000 is greater than the cost.;b. install the light because the expected benefit of $20,000 is greater than the cost.;c. not install the light because the expected benefit of $10,000 is only equal to the cost.;d. not install the light because the expected benefit of $5,000 is less than the cost.;[xxv]. A town engineer comes to the town council with a proposal to build a traffic light at a certain intersection that currently has a stop sign. The benefit of the traffic light is increased safety and will reduce the incidence of fatal traffic accidents by 50 percent per year. Which of the following statements is true?;a. The project should definitely be accepted.;b. The decision to install the light is likely to require a complex evaluation of the trade-off between the worth of human life and the lost time waiting for the light to change signals.;c. The full cost of the traffic light will be relatively small since it only includes the purchase and installation costs.;d. The cost will invariably outweigh the benefit.;[xxvi]. Suppose that installing an overhead pedestrian walkway would cost a college town $100,000. If the walkway is expected to reduce the risk of fatality by 2 percent and the cost of a human life was estimated at $10 million, the town would;a. install the walkway because the estimated benefit is twice the cost.;b. install the walkway because the estimated benefit equals the cost.;c. not install the walkway, since the cost is twice the estimated benefit.;d. install the walkway, since the cost of even a single life is too great.;[xxvii]. Suppose that the cost of installing an overhead pedestrian walkway in a college town is $100,000. If the walkway is expected to reduce the risk of fatality by 0.5 percent and the cost of a human life is estimated at $10 million the town would;a. install the walkway because the estimated benefit is twice the cost.;b. install the walkway because the estimated benefit equals the cost.;c. not install the walkway, since the cost is twice the estimated benefit.;d. install the walkway, since the cost of even a single life is too great.;[xxviii]. Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is true?;a. The costs and benefits need not be measured in the same units to compare them meaningfully.;b. It is hard to measure the cost of installing the traffic barriers.;c. Quantification of the benefit received from saving a human life is a straightforward process.;d. Policymakers must put a dollar value on human life.;[xxix]. Studies show that the value of a human life is about;a. $1 million.;b. $5 million.;c. $10 million.;d. $20 million.;[xxx]. When an infinite value is placed on human life, policymakers who rely on cost-benefit analysis;a. are forced to pursue any project in which a single human life is saved.;b. are likely to make decisions that optimally allocate society?s scarce resources.;c. would not pursue any public project that would not save human life.;d. would be forced to rely on private markets to provide the project.;[xxxi]. For use in cost-benefit analysis, the value of a human life is sometimes calculated on the basis of;a. the risks that a person voluntarily exposes herself to in her job and/or recreational choices.;b. the value of each individual?s assets.;c. an infinite value for each life.;d. the amount of resources required to adequately sustain life.;[xxxii]. Fire protection is a good example of a natural monopoly because;a. it is nonexcludable;b. it is rival.;c. protecting an extra house is unlikely to reduce the protection available to others.;d. All of the above are correct.;[xxxiii]. Suppose that you want to put on a fireworks display in your hometown of 1,000 people this July. The cost of the display is $6,000 and each person values the display at $5. After a month, you have only sold 50 tickets at $5 each. The result is;a. the local government will put on the display but you will not.;b. you will still put on the display but the local government would not.;c. neither you nor the local government would put on the display.;d. This question cannot be answered without knowing the amount of tax the local government would charge for the display.;[xxxiv]. Cost-benefit analysis is important to determine the role of government in our economy because;a. the government should provide all goods in which benefits exceed costs.;b. cost-benefit analysis identifies the possible gains to society from government provision of a particular good.;c. markets for private goods are not able to effectively assign costs and benefits.;d. cost-benefit analysis identifies market failure.;[xxxv]. When the value of a human life is calculated according to the economic contribution a person makes to society (as reflected in their income-earning potential) it is likely to lead to the bizarre implication that;a. it is possible for a retired or disabled person to have no value to society.;b. economists are more valuable than entrepreneurs.;c. retired people who volunteer in their communities are more valuable than physicians.;d. all workers have equal value.;[xxxvi]. Examples of careers that lend substance to the approach of valuing human life by evaluating the risks that people are voluntarily willing to take and the compensation they require for that risk include;a. Certified Public Accounts at tax time.;b. construction workers on high-rise buildings.;c. neonatologists.;d. nurses.;[xxxvii]. The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of diet soft drinks is 0.0005. The cost of imposing a regulation that would ban this chemical is $18 million. If each person saved has a value equal to $10 million, how many people must the policy affect for benefits to exceed costs?;a. 301;b. 601;c. 1801;d. 3601;[xxxviii]. The Occupational Safety and Health Administration (OSHA) has determined that 100 workers are exposed to a hazardous chemical used in the production of diet soft drinks. The cost of imposing a regulation that would ban this chemical is $10 million. OSHA has calculated that each person saved by this regulation has a value equal to $10 million. If benefits are exactly equal to costs, what probability is OSHA using to assess the likelihood of a fatality from exposure to this chemical?;a. 0.001;b. 0.01;c. 0.1;d. 1.0;[xxxix]. Some goods can be either common resources or public goods depending on;a. whether the good is rival.;b. how policymakers deal with the good.;c. the marginal cost of the good.;d. None of the above are correct.;[xl]. Once a common resource is available for consumption, policymakers need to be concerned with;a. making sure everyone gets a fair chance to consume.;b. how much is consumed.;c. creating laws that will completely forbid consumption, because the environment is priceless.;d. None of the above are correct because common resources are optimally provided in private markets.;[xli]. One way to eliminate the Tragedy of the Commons is to;a. increase law enforcement in public areas.;b. limit access to the commons.;c. increase access to the commons.;d. provide more public land for recreation.;[xlii]. Once it becomes obvious that a common resource is being overused;a. market forces cause the use of the resource to shift to a sustainable level.;b. society voluntarily limits its use of the good.;c. it continues to be overused because individuals have no incentive to reduce their use of the good.;d. the good becomes a natural monopoly.;[xliii]. The Tragedy of the Commons results when a good is;a. rival and not excludable.;b. excludable and not rival.;c. both rival and excludable.;d. neither rival nor excludable.;[xliv]. The Tragedy of the Commons occurs because;a. a common resource is rival in consumption.;b. a common resource is underutilized.;c. crimes are committed in public places.;d. common resources are subject to exclusionary rules.;[xlv]. The Tragedy of the Commons occurs because;a. government property is most heavily used by the wealthy.;b. everyone deserves an equal share of government property.;c. social and private incentives differ.;d. established property rights create competition.;[xlvi]. The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following EXCEPT;a. assigning land property rights.;b. auctioning off sheep-grazing permits.;c. taxation of sheep.;d. subsidizing sheep flocks.;[xlvii]. When private costs differ from social costs, which of the following must be present?;a. excludable resources;b. a negative externality;c. a natural monopoly;d. poor profit incentive to capitalize on the resource;[xlviii]. When one person uses a common resource and he diminishes other people?s enjoyment of it, it is an example of;a. a market force.;b. an externality.;c. the invisible hand.;d. excludability.;[xlix]. The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the;a. town could allow individual shepherds to chose their own flock sizes.;b. externality could be internalized by subsidizing the production of sheep?s wool.;c. town could auction off a limited number of sheep-grazing permits.;d. All of the above are correct.;[l]. The pollution of water and air;a. can be solved by addressing the positive externalities.;b. can be viewed as an example of a common resource problem.;c. are viewed as a bastion of efficient market processes.;d. can be solved by taxes on swine, called Pigovian taxes.;[li]. Government may be able to solve the problem of overuse of a common resource by doing each of the following EXCEPT;a. regulating the use or consumption of the common resource.;b. taxing the use or consumption of the common resource.;c. selling the common resource to a private entity.;d. allowing individuals to voluntarily reduce their use of the resource.;[lii]. The Tragedy of the Commons;a. occurs most often with public goods.;b. is only applicable to shared grazing rights among sheep herders.;c. is eliminated when property rights are assigned to individuals.;d. occurs when social incentives are in line with private incentives.;[liii]. The Tragedy of the Commons can be corrected by;a. providing more of the resource for public use.;b. assigning property rights to individuals.;c. providing government subsidies for the resource.;d. making certain everyone in the economy has access to the resource.;[liv]. If the use of a common resource is not regulated;a. it cannot be used by anyone.;b. the economy will end up with too much of a good thing.;c. it becomes a private good.;d. it will be overused.;[lv]. The statement ?What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others? is attributed to;a. Karl Marx.;b. Aristotle.;c. Plato.;d. Adam Smith.;[lvi]. Each of the following would be considered a common resource EXCEPT;a. clean air.;b. congested roads.;c. national defense.;d. open grazing land.;[lvii]. In almost all cases, the problem with overuse of common resources is that;a. the allocation of private property rights leads to overuse of the common resource.;b. private decisionmakers use the common resource too much.;c. government policy allows unequal division of the common resource.;d. All of the above are correct.;[lviii]. To remedy the presence of a negative externality such as pollution in a market, the government may choose to impose a;a. Pigovian tax.;b. subsidy.;c. price floor.;d. Coase theorem solution.;[lix]. Environmental degradation is NOT;a. a common resource problem.;b. remedied through Pigovian taxes.;c. a form of market failure.;d. always best resolved by direct regulation.;[lx]. Market failure with common resources occurs because;a. the government imposes a negative externality on everyone?s consumption of the resource.;b. society is unable to value the social loss that results from individual consumption.;c. consumption can be privately profitable even when it is socially undesirable.;d. All of the above are correct.;[lxi]. Uncongested roads are a good example of a;a. public good.;b. private good.;c. common resource.;d. a good produced by a natural monopoly.;[lxii]. If a road is congested, then use of that road by an additional person would lead to a;a. negative externality.;b. positive externality.;c. natural monopoly problem.;d. free-rider problem with rush hour drivers stuck in traffic.;[lxiii]. Using a toll to reduce traffic when congestion is greatest is an example of a;a. regulation solution.;b. command-and-control policy.;c. Pigovian tax.;d. Coase theorem solution.;[lxiv]. A toll on congested roads is in essence a/an;a. interstate highway tax.;b. Department of Motor Vehicles tax.;c. gasoline tax.;d. Pigovian tax.;[lxv]. Which of the following statements is true of the tax on gasoline?;a. It does not reduce traffic volume.;b. It is the best solution to road congestion because it gives private individuals an incentive to internalize the congestion externality.;c. It discourages driving on noncongested roads, even though there is no congestion externality for these roads.;d. It has little effect on driving behavior.
Paper#35606 | Written in 18-Jul-2015Price : $17