Filters
Question type
Study Flashcards

To enhance the well-being of society,a social planner will encourage firms to increase production when


A) the firms are producing basic goods.
B) there is a shortage in the market.
C) technology spillovers are associated with production.
D) negative externalities "spill over" into production.

E) A) and B)
F) A) and D)

Correct Answer

verifed

verified

Why are Pigovian taxes preferred to regulatory policies as methods to remedy negative externalities?

Correct Answer

verifed

verified

Pigovian taxes allow markets to coordina...

View Answer

Suppose a certain good conveys either an external cost or an external benefit.If the private cost of the last unit of the good that was produced is equal to the private value of that unit,then the sum of producer and consumer surplus is maximized.

A) True
B) False

Correct Answer

verifed

verified

A negative externality arises when a person engages in an activity that has


A) an adverse effect on a bystander who is not compensated by the person who causes the effect.
B) an adverse effect on a bystander who is compensated by the person who causes the effect.
C) a beneficial effect on a bystander who pays the person who causes the effect.
D) a beneficial effect on a bystander who does not pay the person who causes the effect.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Which of the following require firms to pay to pollute? (i) corrective taxes (ii) tradable pollution permits (iii) pollution regulations


A) (i) only
B) both (i) and (ii)
C) (iii) only
D) both (ii) and (iii)

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

Negative externalities occur when one person's actions


A) cause another person to lose money in a stock market transaction.
B) cause his or her employer to lose business.
C) reveal his or her preference for foreign-produced goods.
D) adversely affect the well-being of a bystander who is not a party to the action.

E) All of the above
F) B) and C)

Correct Answer

verifed

verified

Public Policies Toward Externalities Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. Public Policies Toward Externalities Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. -Refer to Figure 10-13.If the government imposed a corrective tax that successfully moved the market from the market equilibrium to the social optimum,then tax revenue for the government would amount to A) $1,250. B) $1,600. C) $2,000. D) $2,500. -Refer to Figure 10-13.If the government imposed a corrective tax that successfully moved the market from the market equilibrium to the social optimum,then tax revenue for the government would amount to


A) $1,250.
B) $1,600.
C) $2,000.
D) $2,500.

E) C) and D)
F) A) and D)

Correct Answer

verifed

verified

In the case of a technology spillover,internalizing a positive externality will cause the supply curve of an industry to


A) shift to the right.
B) shift to the left.
C) become more elastic.
D) remain unchanged.

E) A) and D)
F) C) and D)

Correct Answer

verifed

verified

In some cases,tradable pollution permits may be better than a corrective tax because


A) pollution permits allow for a market solution while a corrective tax does not.
B) pollution permits generate more revenue for the government than a corrective tax.
C) pollution permits are never preferred over a corrective tax.
D) the government can set a maximum level of pollution using permits.

E) B) and D)
F) None of the above

Correct Answer

verifed

verified

Suppose that meat producers create a negative externality.What is the relationship between the equilibrium quantity and the socially optimal quantity of meat to be produced?


A) They are equal.
B) The equilibrium quantity is greater than the socially optimal quantity.
C) The equilibrium quantity is less than the socially optimal quantity.
D) There is not enough information to answer the question.

E) All of the above
F) B) and C)

Correct Answer

verifed

verified

Figure 10-4 Figure 10-4 -Refer to Figure 10-4.Externalities in this market could be internalized if A) there were a tax on the product. B) there were a subsidy for the product. C) production were stopped. D) the Coase theorem failed. -Refer to Figure 10-4.Externalities in this market could be internalized if


A) there were a tax on the product.
B) there were a subsidy for the product.
C) production were stopped.
D) the Coase theorem failed.

E) All of the above
F) B) and C)

Correct Answer

verifed

verified

Figure 10-7 Figure 10-7 -Refer to Figure 10-7.Which quantity represents the social optimum for this market? A) Q1. B) Q2. C) Q3. D) Q4. -Refer to Figure 10-7.Which quantity represents the social optimum for this market?


A) Q1.
B) Q2.
C) Q3.
D) Q4.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Buyers and sellers neglect the external effects of their actions when deciding how much to demand or supply.

A) True
B) False

Correct Answer

verifed

verified

The proposition that if private parties can bargain without cost over the allocation of resources,they can solve the problem of externalities on their own,is called


A) the Pigovian theorem.
B) a corrective tax.
C) the externality theorem.
D) the Coase theorem.

E) All of the above
F) A) and C)

Correct Answer

verifed

verified

Suppose that flu shots create a positive externality equal to $12 per shot.What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?


A) They are equal.
B) The equilibrium quantity is greater than the socially optimal quantity.
C) The equilibrium quantity is less than the socially optimal quantity.
D) There is not enough information to answer the question.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

Which of the following is a problem that keeps people from privately solving externality problems?


A) Each party involved holds out for a better deal.
B) The externality is large.
C) Only problems with a sufficiently large number of parties can be solved.
D) There is a lack of government intervention.

E) B) and C)
F) A) and C)

Correct Answer

verifed

verified

In a market economy,government intervention


A) will always improve market outcomes.
B) reduces efficiency in the presence of externalities.
C) may improve market outcomes in the presence of externalities.
D) is necessary to control individual greed.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Which of the following statements is correct?


A) Government should tax goods with either positive or negative externalities.
B) Government should tax goods with negative externalities and subsidize goods with positive externalities.
C) Government should subsidize goods with either positive or negative externalities.
D) Government should tax goods with positive externalities and subsidize goods with negative externalities.

E) A) and C)
F) A) and B)

Correct Answer

verifed

verified

Government intervention that aims to promote technology-enhancing industries is called


A) assisted technology.
B) intervention policy.
C) industrial technology assistance.
D) industrial policy.

E) A) and B)
F) C) and D)

Correct Answer

verifed

verified

Some environmentalists argue that we should protect the environment as much as possible,regardless of cost.Which of the following is not a likely outcome of pursuing such a course of action?


A) lower levels of nutrition, health care, and housing
B) a lower standard of living
C) slowing or reversing technological advancement
D) the elimination of all pollution

E) C) and D)
F) A) and B)

Correct Answer

verifed

verified

Showing 361 - 380 of 441

Related Exams

Exam 1

Ten Principles of Economics.

349 Questions

Exam 2

Thinking Like an Economist.

535 Questions

Exam 3

Interdependence and the Gains from Trade.

443 Questions

Exam 4

The Market Forces of Supply and Demand.

571 Questions

Exam 5

Elasticity and Its Application

510 Questions

Exam 6

Supply, Demand, And Government Policies.

557 Questions

Exam 7

Consumers, Producers, and the Efficiency of Markets.

460 Questions

Exam 8

Application: The Costs of Taxation.

424 Questions

Exam 9

Application: International Trade.

410 Questions

Exam 11

Public Goods and Common Resources.

349 Questions

Exam 12

The Design of the Tax System.

478 Questions

Exam 13

The Costs of Production.

533 Questions

Exam 14

Firms in Competitive Markets.

478 Questions

Exam 15

Monopoly.

526 Questions

Exam 16

Monopolistic Competition.

497 Questions

Exam 17

Oligopoly.

410 Questions

Exam 18

The Market For the Factors of Production.

463 Questions

Exam 19

Earnings and Discrimination.

398 Questions

Exam 20

Income Inequality and Poverty.

374 Questions

Exam 21

The Theory of Consumer Choice.

462 Questions

Exam 22

Frontiers in Microeconomics.

353 Questions

Show Answer