Chapter 16: CPRs and Determinants of
Cooperation UPDATED ACTUAL Exam
Questions and CORRECT Answers
What are the five qualities of complete property rights? - CORRECT ANSWER - The
right to access, extract, manage, exclude others, and alienate (sell or transfer) the property.
How can CPR be compared to private goods and open-access resources? - CORRECT
ANSWER - They are rivalrous
How can CPRs be compared to club goods? - CORRECT ANSWER - They are
collectively excludable
What are some examples of CPRs? - CORRECT ANSWER - community grazing for cattle
community forestry
community-run irrigation systems
fishing grounds
soil fertility under itinerant farming
What are the 4 characteristics of CPRs? (need a general idea of all 4) - CORRECT
ANSWER - 1. well delineated boundaries and a well-defined group of right holders
2. users cannot choose or exclude other users
, 3.each user gets full benefit from his extraction, but accounts only for a fraction of the external
cost he imposes on others.
(don't take into account full external cost (fishing example)) --> rules needed to limit ind. levels
of extraction
4. each member pays the full cost of his contribution in effort in effort to maintain the resource
but receives only a fraction of the benefits. (ex: cleaning the house) --> rules needed on
individual contributions to maintenance.
What are the advantages of CPRs? (know at least 2) - CORRECT ANSWER - 1.
Economies of scale
2. Geographical risk spreading (school of fish traveling in small plot of water v. large plot)
3. resources may be impossible to assign individually, or too costly to divide.
4. individualization may have negative equity effects when the quality of the resource is
heterogenous and uncertain (better chance others get good plots of land in CPR than divided
land)
5. Interlinked advantages such as mutual insurance (during times of shock), info. sharing, and
lobbying the state for privileges.
What are the disadvantages of CPRs? - CORRECT ANSWER - 1. over-extraction from
the resource (neg. externality) if group members are unable to cooperate
2. under-provision of maintenance services if group members fail to cooperate.
What are some policy instrument that can force members to internalize negative externalities and
reduce q to q*? - CORRECT ANSWER - 1. tax per animal
Cooperation UPDATED ACTUAL Exam
Questions and CORRECT Answers
What are the five qualities of complete property rights? - CORRECT ANSWER - The
right to access, extract, manage, exclude others, and alienate (sell or transfer) the property.
How can CPR be compared to private goods and open-access resources? - CORRECT
ANSWER - They are rivalrous
How can CPRs be compared to club goods? - CORRECT ANSWER - They are
collectively excludable
What are some examples of CPRs? - CORRECT ANSWER - community grazing for cattle
community forestry
community-run irrigation systems
fishing grounds
soil fertility under itinerant farming
What are the 4 characteristics of CPRs? (need a general idea of all 4) - CORRECT
ANSWER - 1. well delineated boundaries and a well-defined group of right holders
2. users cannot choose or exclude other users
, 3.each user gets full benefit from his extraction, but accounts only for a fraction of the external
cost he imposes on others.
(don't take into account full external cost (fishing example)) --> rules needed to limit ind. levels
of extraction
4. each member pays the full cost of his contribution in effort in effort to maintain the resource
but receives only a fraction of the benefits. (ex: cleaning the house) --> rules needed on
individual contributions to maintenance.
What are the advantages of CPRs? (know at least 2) - CORRECT ANSWER - 1.
Economies of scale
2. Geographical risk spreading (school of fish traveling in small plot of water v. large plot)
3. resources may be impossible to assign individually, or too costly to divide.
4. individualization may have negative equity effects when the quality of the resource is
heterogenous and uncertain (better chance others get good plots of land in CPR than divided
land)
5. Interlinked advantages such as mutual insurance (during times of shock), info. sharing, and
lobbying the state for privileges.
What are the disadvantages of CPRs? - CORRECT ANSWER - 1. over-extraction from
the resource (neg. externality) if group members are unable to cooperate
2. under-provision of maintenance services if group members fail to cooperate.
What are some policy instrument that can force members to internalize negative externalities and
reduce q to q*? - CORRECT ANSWER - 1. tax per animal
