9. Increased property values from improvements to other homes in your neighborhood

a. never happens.

b. is a good example of a positive externality.

c. should definitely be reduced to zero.

d. is a good example of a negative externality.

11. With common property resources,

a. because everyone owns the resources, they all have an incentive to use them wisely.

b. the market is likely to allocate resources efficiently.

c. the market typically fails, and the resources are easily depleted.

d. the market typically fails, and the resources are easily protected.

12. A positive externality occurs when

a. all the costs to society are not captured in the private demand curve.

b. all the costs to society are not captured in the private supply curve.

c. all the benefits to society are not captured in the private supply curve.

d. all the benefits to society are not captured in the private demand curve.

14. The free market tends to produce

a. too much of a good associated with a positive externality.

b. not enough of a good associated with a negative externality.

c. too much of a good associated with a negative externality.

d. the optimal quantity of a good associated with a negative externality.

17. All of the following are examples of the tragedy of the commons except

a. long lines at the rides at Six Flags amusement park.

b. traffic congestion on a public highway.

c. decreasing fish populations in the ocean.

d. greenhouse gases contributing to climate change.