1.Government policy can potentially raise economic well-being a. in all markets for goods and services. b. in economic models, but not in reality. c. when a good does not have a price attached to it. d. never. ____2.The idea that "externalities arise because something of value has no price attached to it" is associated with a. public goods, but not with common resources. b. common resources, but not with public goods. c. both public goods and common resources. d. neither public goods nor common resources. ____3.The provision of public goods gives rise to a. positive externalities, as does the use of common resources. b. positive externalities, whereas the use of common resources gives rise to negative externalities. c. negative externalities, whereas the use of common resources gives rise to positive externalities. d. negative externalities, as does the use of common resources. ____4.A good is excludable if a. one person's use of the good diminishes another person's enjoyment of it. b. the government can regulate its availability. c. it is not a normal good. d. people can be prevented from using it. ____5.Both public goods and common resources are a. rival in consumption. b. nonrival in consumption. c. excludable. d. nonexcludable. ____6.If one person's use of a good diminishes another person's enjoyment of it, the good is a. rival in consumption. b. excludable. c. normal. d. exhaustible. ____7.Goods that are rival in consumption but not excludable would be considered a. club goods. b. common resources. c. public goods. d. private goods. ____8.Consider a public road that anyone is allowed to drive on. If the road is often congested, the road would be considered a a. private good. b. club good. c. common resource. d. public good. ____9.Because public goods are a. excludable, people have an incentive to be free riders. b. excludable, people do not have an incentive to be free riders. c. not excludable, people have an incentive to be free riders. d. not excludable, people do not have an incentive to be free riders. ____10.Without government intervention, public goods tend to be a. overproduced and common resources tend to be overconsumed. b. overproduced and common resources tend to be underconsumed. c. underproduced and common resources tend to be overconsumed. d. underproduced and common resources tend to be underconsumed. ____11.A free rider is a person who a. will only purchase a product on sale. b. receives the benefit of a good but avoids paying for it. c. can produce a good at no cost. d. rides public transit regularly. ____12.Because of the free-rider problem, a. private markets tend to undersupply public goods. b. the federal government spends too many resources on national defense and not enough resources on medical research. c. fireworks displays have become increasingly dangerous. d. poverty has increased. ____13.Advocates of antipoverty programs believe that fighting poverty a. can make everyone better off. b. is most successfully accomplished by charities. c. is most efficiently accomplished by the market. d. reduces the well-being of tax payers. ____14.As with many public goods, determining the appropriate level of government support for the production of general knowledge is difficult because a. patents correct for an unknown portion of the externality. b. benefits are hard to measure. c. members of Congress are often experts in the sciences. d. the costs always exceed the benefits. ____15.Studies that compare the wages of more risky and less risky occupations estimate the value of a human life to be about a. $1 million. b. $5 million. c. $10 million. d. $20 million. ____16.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. ____17.The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that a. over time, the aquifer is likely to be overused. b. each farmer has a sufficient incentive to conserve the water. c. state governments have an incentive to insure that their farmers do not overuse the water. d. resources would be used more efficiently if the government paid for the pumps farmers use to get the water. ____18.Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource 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. asking individuals to voluntarily reduce their use of the resource. ____19.Which of the following is an example of government intervention to solve a Tragedy of the Commons problem? a. subsidizing basic research b. building lighthouses c. toll charges on congested roads d. cost-benefit analysis ____20.Elephants are endangered, but cows are not because a. cows are not as valuable as elephants. b. elephants are a common resource, while cows are private goods. c. cows are a common resource, while elephants are private goods. d. it is legal to kill cows but not elephants