CLEP Microeconomics chapter practice4 questions

29 Public Goods, Private Goods, and Common Resources

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

A good is nonrival when

Nonrivalry means an additional user does not significantly reduce others' consumption. Excludability is a separate characteristic.
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C. one person's use leaves others' use essentially unchanged

Nonrivalry means an additional user does not significantly reduce others' consumption. Excludability is a separate characteristic.

Question 2

Question 2 of 4

The free-rider problem most directly causes private markets to

If people can benefit without paying, voluntary contributions understate willingness to pay and the market supplies too little.
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C. underprovide goods whose beneficiaries can avoid paying

If people can benefit without paying, voluntary contributions understate willingness to pay and the market supplies too little.

Question 3

Question 3 of 4

An open-access fishery is best classified as

Fish are rival because one catch leaves fewer fish, but open access makes exclusion difficult.
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D. a common resource

Fish are rival because one catch leaves fewer fish, but open access makes exclusion difficult.

Question 4

Question 4 of 4

Why may an unregulated common resource be overused?

The private gain from another use exceeds the user's private share of the social depletion cost, encouraging excessive use.
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B. Users capture each benefit but share the depletion costs.

The private gain from another use exceeds the user's private share of the social depletion cost, encouraging excessive use.

Quiz complete