Filters
Question type
Study Flashcards

Patents do not


A) provide firms an incentive to research.
B) assign property rights to inventors.
C) protect the rights of inventors for their lifetimes.
D) internalize externalities.

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

Correct Answer

verifed

verified

Corrective taxes are typically advocated to correct for the effects of


A) positive externalities.
B) negative externalities.
C) patents.
D) All of the above are correct.

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

Correct Answer

verifed

verified

Once tradable pollution permits have been allocated to firms,


A) the government controls the price of permits.
B) firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits.
C) the value of pollution-saving technology will be lower than the market value of a pollution permit.
D) the Coase theorem is no longer applicable as a solution to reducing pollution.

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

Correct Answer

verifed

verified

Figure 10-3 Figure 10-3 This figure reflects the market for outdoor concerts in a public park surrounded by residential neighborhoods. -Refer to Figure 10-3.The difference between the social cost curve and the supply curve reflects the A) profit margin of each concert. B) cost of spillover effects from the concert (e.g., noise and traffic) . C) value of concerts to society as a whole. D) amount by which the city should subsidize the concert organizers. This figure reflects the market for outdoor concerts in a public park surrounded by residential neighborhoods. -Refer to Figure 10-3.The difference between the social cost curve and the supply curve reflects the


A) profit margin of each concert.
B) cost of spillover effects from the concert (e.g., noise and traffic) .
C) value of concerts to society as a whole.
D) amount by which the city should subsidize the concert organizers.

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

Correct Answer

verifed

verified

Figure 10-12 Figure 10-12 -Refer to Figure 10-12.Suppose,on the figure,Q represents the quantity of education and P represents the price of education.Then the quantity represents A) an inefficiency. B) the extent of the negative externality that pertains to the market for education. C) the amount of the tax that would be required to correct the negative externality that pertains to the market for education. D) the amount of the subsidy that would be required to correct the positive externality that pertains to the market for education. -Refer to Figure 10-12.Suppose,on the figure,Q represents the quantity of education and P represents the price of education.Then the quantity represents Figure 10-12 -Refer to Figure 10-12.Suppose,on the figure,Q represents the quantity of education and P represents the price of education.Then the quantity represents A) an inefficiency. B) the extent of the negative externality that pertains to the market for education. C) the amount of the tax that would be required to correct the negative externality that pertains to the market for education. D) the amount of the subsidy that would be required to correct the positive externality that pertains to the market for education.


A) an inefficiency.
B) the extent of the negative externality that pertains to the market for education.
C) the amount of the tax that would be required to correct the negative externality that pertains to the market for education.
D) the amount of the subsidy that would be required to correct the positive externality that pertains to the market for education.

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

Correct Answer

verifed

verified

Which of the following statements is correct about a market in which pollution is emitted?


A) Both corrective taxes and pollution permits internalize the externality of pollution.
B) Corrective taxes internalize the externality of pollution, but pollution permits do not internalize that externality.
C) Corrective taxes fail to internalize the externality of pollution, but corrective taxes internalize that externality.
D) Neither corrective taxes nor pollution permits internalize the externality of pollution.

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

Correct Answer

verifed

verified

In the case of a technology spillover,internalizing a positive externality through a government subsidy will cause the industry's supply curve to


A) shift up by an amount equal to the subsidy.
B) shift down by an amount less than the subsidy.
C) shift down by an amount equal to the subsidy.
D) shift down by an amount greater than the subsidy.

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

Correct Answer

verifed

verified

Figure 10-19 Figure 10-19 -Refer to Figure 10-19.Each additional unit of the good that is produced yields an external A) benefit of $15. B) benefit of $36. C) cost of $15. D) cost of $36. -Refer to Figure 10-19.Each additional unit of the good that is produced yields an external


A) benefit of $15.
B) benefit of $36.
C) cost of $15.
D) cost of $36.

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

Correct Answer

verifed

verified

Two firms,A and B,each currently emit 100 tons of chemicals into the air.The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air.The government gives each firm 40 pollution permits,which it can either use or sell to the other firm.It costs Firm A $200 for each ton of pollution that it eliminates before it is emitted into the air,and it costs Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air.It is likely that


A) Firm A will buy all of Firm B's pollution permits. Each one will cost between $100 and $200.
B) Firm B will buy all of Firm A's pollution permits. Each one will cost between $100 and $200.
C) Both firms will use their own pollution permits.
D) Firm A will buy some of Firm B's pollution permits. Each one will cost less than $100.

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

Correct Answer

verifed

verified

Table 10-5 The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm A to eliminate a second unit of pollution it would cost an additional $67. Table 10-5 The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm A to eliminate a second unit of pollution it would cost an additional $67. -Refer to Table 10-5.If the government charged a fee of $69 per unit of pollution,how many units of pollution would the firms eliminate altogether? A) 7 B) 8 C) 9 D) 10 -Refer to Table 10-5.If the government charged a fee of $69 per unit of pollution,how many units of pollution would the firms eliminate altogether?


A) 7
B) 8
C) 9
D) 10

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

Correct Answer

verifed

verified

With pollution permits,the supply curve for pollution rights is


A) perfectly elastic.
B) perfectly inelastic.
C) upward sloping.
D) downward sloping.

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

Correct Answer

verifed

verified

Transaction costs


A) can keep private parties from solving externality problems.
B) are incurred in the production process due to externalities.
C) increase when taxes are imposed to correct negative externalities.
D) are eliminated when the government intervenes in a market with externalities.

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

Correct Answer

verifed

verified

According to recent research,the gas tax in the United States is lower than the optimal level.

A) True
B) False

Correct Answer

verifed

verified

Suppose that smoking creates a negative externality.If the government imposes a per-cigarette tax equal to the per-cigarette externality,then


A) the after-tax equilibrium quantity of cigarettes smoked will be less than the socially optimal quantity of cigarettes smoked.
B) the after-tax equilibrium quantity of cigarettes smoked will be greater than the socially optimal quantity of cigarettes smoked.
C) the after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked.
D) There is not enough information to answer the question.

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

Correct Answer

verifed

verified

When the government intervenes in markets with externalities,it does so in order to


A) increase production when negative externalities are present.
B) protect the interests of bystanders.
C) make certain all benefits are received by market participants.
D) reduce production when positive externalities are present.

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

Correct Answer

verifed

verified

A technology spillover is a type of negative externality.

A) True
B) False

Correct Answer

verifed

verified

Research into new technologies conveys neither negative externalities nor positive externalities.

A) True
B) False

Correct Answer

verifed

verified

Figure 10-5 Figure 10-5 -Refer to Figure 10-5.Which of the following statements is correct? A) The marginal benefit of the positive externality is measured by P3 - P1. B) The marginal cost of the negative externality is measured by P3 - P2. C) The marginal cost of the negative externality is measured by P3 - P1. D) The marginal cost of the negative externality is measured by P3 - P0. -Refer to Figure 10-5.Which of the following statements is correct?


A) The marginal benefit of the positive externality is measured by P3 - P1.
B) The marginal cost of the negative externality is measured by P3 - P2.
C) The marginal cost of the negative externality is measured by P3 - P1.
D) The marginal cost of the negative externality is measured by P3 - P0.

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

Correct Answer

verifed

verified

Figure 10-19 Figure 10-19 -Refer to Figure 10-19.Each additional unit of the good that is produced yields an external benefit of A) $15. B) $23. C) $36. D) $89. -Refer to Figure 10-19.Each additional unit of the good that is produced yields an external benefit of


A) $15.
B) $23.
C) $36.
D) $89.

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

Correct Answer

verifed

verified

Which of the following policies is the government most inclined to use when faced with a positive externality?


A) taxation
B) permits
C) subsidies
D) usage fees

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

Correct Answer

verifed

verified

Showing 321 - 340 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