Chapter 12 — Quiz

Multiple choice

Q1. A public good is: a) Rival and excludable b) Non-rival and non-excludable c) Rival and non-excludable d) Non-rival and excludable

Q2. A common-pool resource is: a) Non-rival and excludable b) Non-rival and non-excludable c) Rival and non-excludable d) Rival and excludable

Q3. The free-rider problem occurs when: a) People don't pay for private goods b) People enjoy a non-excludable good without paying, leading to underprovision c) The government provides too many goods d) Prices are too high

Q4. The tragedy of the commons occurs when: a) Government regulation is too strict b) Individuals overuse a shared resource because they capture the benefit but share the cost c) Private goods are underproduced d) Taxes are too high

Q5. Which of the following is a club good? a) National defense b) A Netflix subscription c) Ocean fishing d) Clean air

Q6. Elinor Ostrom's main contribution was showing that: a) Commons always end in tragedy b) Privatization is always the best solution c) Communities can sometimes manage commons without privatization or government regulation d) Government regulation always works

Q7. Which is NOT one of Ostrom's design principles? a) Clearly defined boundaries b) Government ownership c) Monitoring d) Graduated sanctions

Q8. Downtown parking in Millbrook is best classified as: a) A pure public good b) Somewhere between a common-pool resource and a private good, depending on whether it's metered c) A club good d) Perfectly non-rival

Q9. The optimal quantity of a public good is where: a) One person's marginal benefit equals marginal cost b) The SUM of everyone's marginal benefits equals marginal cost c) The average benefit equals the average cost d) The government decides

Q10. The standard economic solution to the free-rider problem for public goods is: a) Privatization b) Government provision funded by taxes c) Voluntary donations d) Community governance

Short answer

SA1. Define "rival" and "non-rival" with one example of each.

SA2. Why do markets fail to provide public goods efficiently?

SA3. Apply the tragedy of the commons to a real example of your choosing.

SA4. Name three of Ostrom's eight design principles for successful commons governance.

SA5. Why might parking that is "free" actually be more costly to society than parking that is priced?

True / False

TF1. National defense is a private good. (True / False)

TF2. The free-rider problem makes it difficult for markets to provide public goods. (True / False)

TF3. The tragedy of the commons is inevitable for all shared resources. (True / False)

TF4. Club goods are non-rival and excludable. (True / False)

TF5. Ostrom argued that commons should always be privatized. (True / False)

Selected answers in appendices/answers-to-selected.md.