Intermediate Microeconomics by Patrick M. Emerson

True or false

Module 21: Public Goods

1. Public goods are rival & excludable.

2. Public goods are often overprovided because of the free rider problem.

3. Common pool resource goods are non-rival but excludable.

4. Club goods are non-excludable but rival.

5. Clean air is an example of a public good.

6. A lighthouse is an example of an impure public good.

7. YouTube TV is an example of a common pool resource.

8. A public park is an example of a club good.

9. Market demand for a public good is determined by the vertical sum of each consumer's willingness to pay.

10. Based on the willingness each resident of a town has to pay for construction of a bridge over an adjacent river, as indicated in the following table, social welfare would be improved by building the bridge at a total cost of $500.

11. Based on the willingness each resident of a town has to pay for construction of a bridge over an adjacent river, as indicated in the following table, the town would vote against a proposal to tax each resident $100 to fund the $500 cost of the bridge.

12. Based on the willingness each resident of a town has to pay for construction of a bridge over an adjacent river, as indicated in the following table, voluntary contributions would likely not be sufficient to raise the $500 necessary to build the bridge.

Resident: Willingness to Pay -> A: $300 B: $200 C: $80 D: $70 E: $50

13. The most common mechanism for funding public goods is through taxes earmarked to pay for a "bundle" of such goods, each of which are likely valued differently by different residents.

14. Establishing property rights for common pool resources is a typical way to force users to internalize the external cost inherent in their consumption.