Question

1.) The Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that

A over time, the aquifer is likely to be overused.

B each farmer has a sufficient incentive to conserve the water.

C state governments have an incentive to insure that their farmers do not overuse the water.

D resources would be used more efficiently if the government paid for the pumps farmers use to get the water.

2.) Many species of animals are common resources, and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species even though there is such a high demand for beef?

A Cows reproduce at a high rate and have adapted well to their environment.

B Public policies protect cows from predators and diseases.

C Cows are privately owned, whereas many endangered species are owned by no one.

D There is a natural ecological balance between the birth rate of cows and human consumption.

3.) The idea of requiring motorists to pay to use the busiest streets in a city

A has been proposed by many public officials, but to date the idea never has been tried in a major city anywhere in the world.

B was tried in New York City in the 1990s, but the result was more — not less — congestion on busy streets, and the experiment was short-lived.

C reflects the fact that a congested road is a public good.

D reflects the fact that a congested road is a common resource.

4.) A common theme among examples of market failure is

A the good being provided harms society in some systematic way.

B some item of value does not have an owner with the legal authority to control it.

C cost-benefit analysis will show that private markets should provide the goods and services.

Dgovernment intervention decreases the social benefits.

5.) In which of the following examples are property rights notnot well established?

A Jim chooses to ride his bike to work rather than drive his car.

B Groups of students play loud music in the open area between the dorms.

C Aniella reads a book on her patio.

D Executives discuss corporate strategy in the company boardroom.

Answer 1