TTU AAEC 2305 Test 4 - Chapter 19,20,9,10 Questions with Correct Answers Latest Update
2025/2026
The tragedy of commons is more likely to apply to: - Answers forests, fish, and elephants.
A forced rider is someone who: - Answers pays a share of the costs of a pubic good but who
does not enjoy the benefits.
Refer to the table. Which of the following statements is TRUE?
I. Section 1 may contain fruit, chicken, and underwear.
II. Section 2 may contain fish in the ocean, public roads, and public hunting grounds.
III. Section 3 may contain Wi-Fi, cable TV, and digital music.
IV. Section 4 may contain asteroid deflection, national defense, and radio. - Answers I, II, III, and
IV
Both public goods and common resources are: - Answers nonexcludable.
An example of a common resource would be: - Answers the environment.
Nonrival private goods are likely to have ________ fixed costs and ________ marginal costs. -
Answers large; small.
People have little incentive to produce a public good because: - Answers of the free rider
problem.
A free rider is a person who: - Answers receives the benefits of a good but avoids paying for it.
The tragedy of the commons refers to the: - Answers overuse of a rival but non excludable good.
A person ________ be cheaply prevented from using national defense, a(n) ________ good. -
Answers cannot; non excludable.
Private goods can be provided by competitive markets because they are: - Answers Excludable,
providing an incentive to pay for and thus to produce these goods.
Which of the following solutions allows for an efficient allocation of a public good? - Answers
advertising.
A tragedy of the commons often results from ______ and ______. - Answers rivalry; non
excludable.
In which of the case below is there the potential for a free-rider problem? - Answers voluntary
payments for a smog reduction program.
, Compared to private goods, the free market would ________ public goods. - Answers
underproduce.
Solving a tragedy of the commons problem could be done through:
I. establishment of property rights over the common resource.
II. the invisible hand.
III. government-armed protection. - Answers I and III only.
Which of the following is a list of common resources only? - Answers a public beach, soup
kitchen meals, public roads.
Most voters will tend to be concerned with: - Answers only a few special issues (those that have
the most impact on the voters' personal welfare).
Why are special interest groups so powerful? - Answers Because special interest groups have a
self-interest in passing favorable legislation--they stand to gain millions of dollars, while each
taxpayer loses only several dollars. Also bc voters are rationally ignorant about how laws
designed to help special interest groups are harmful to everyone else.
The social cost of driving an SUV is equal to: - Answers both the cost of the vehicle's pollution
and its operation. (gas, etc)
Government solutions to externality problems include:
I. Pigouvian taxes
II. tradable allowances
III. command and control - Answers I, II and III
Which of the following is the smallest part of the United States budget? - Answers foreign aid.
Public choice is a field of study that: - Answers uses economic tools to examine political
behavior.
The acronym PAC stands for: - Answers Political Action Committee.
A tariff on a good when the world price is lower than the domestic price leads to: - Answers
lower domestic consumption of the good than under free trade.
Market solutions to externality problems work when:
I. property rights are easily identifiable.
II. transaction costs are relatively low.
2025/2026
The tragedy of commons is more likely to apply to: - Answers forests, fish, and elephants.
A forced rider is someone who: - Answers pays a share of the costs of a pubic good but who
does not enjoy the benefits.
Refer to the table. Which of the following statements is TRUE?
I. Section 1 may contain fruit, chicken, and underwear.
II. Section 2 may contain fish in the ocean, public roads, and public hunting grounds.
III. Section 3 may contain Wi-Fi, cable TV, and digital music.
IV. Section 4 may contain asteroid deflection, national defense, and radio. - Answers I, II, III, and
IV
Both public goods and common resources are: - Answers nonexcludable.
An example of a common resource would be: - Answers the environment.
Nonrival private goods are likely to have ________ fixed costs and ________ marginal costs. -
Answers large; small.
People have little incentive to produce a public good because: - Answers of the free rider
problem.
A free rider is a person who: - Answers receives the benefits of a good but avoids paying for it.
The tragedy of the commons refers to the: - Answers overuse of a rival but non excludable good.
A person ________ be cheaply prevented from using national defense, a(n) ________ good. -
Answers cannot; non excludable.
Private goods can be provided by competitive markets because they are: - Answers Excludable,
providing an incentive to pay for and thus to produce these goods.
Which of the following solutions allows for an efficient allocation of a public good? - Answers
advertising.
A tragedy of the commons often results from ______ and ______. - Answers rivalry; non
excludable.
In which of the case below is there the potential for a free-rider problem? - Answers voluntary
payments for a smog reduction program.
, Compared to private goods, the free market would ________ public goods. - Answers
underproduce.
Solving a tragedy of the commons problem could be done through:
I. establishment of property rights over the common resource.
II. the invisible hand.
III. government-armed protection. - Answers I and III only.
Which of the following is a list of common resources only? - Answers a public beach, soup
kitchen meals, public roads.
Most voters will tend to be concerned with: - Answers only a few special issues (those that have
the most impact on the voters' personal welfare).
Why are special interest groups so powerful? - Answers Because special interest groups have a
self-interest in passing favorable legislation--they stand to gain millions of dollars, while each
taxpayer loses only several dollars. Also bc voters are rationally ignorant about how laws
designed to help special interest groups are harmful to everyone else.
The social cost of driving an SUV is equal to: - Answers both the cost of the vehicle's pollution
and its operation. (gas, etc)
Government solutions to externality problems include:
I. Pigouvian taxes
II. tradable allowances
III. command and control - Answers I, II and III
Which of the following is the smallest part of the United States budget? - Answers foreign aid.
Public choice is a field of study that: - Answers uses economic tools to examine political
behavior.
The acronym PAC stands for: - Answers Political Action Committee.
A tariff on a good when the world price is lower than the domestic price leads to: - Answers
lower domestic consumption of the good than under free trade.
Market solutions to externality problems work when:
I. property rights are easily identifiable.
II. transaction costs are relatively low.
