Question 1

Which of the following is an example of a negative externality?

Accepted Answer

A)  Lung cancer due to passive smoking 
B)  Health problems due to consumption of excessive alcohol 
C)  Increased obesity rates due to consumption of junk food 
D)  Lower infant mortality due to the discovery of new vaccines 
A)  Lung cancer due to passive smoking 
B)  Health problems due to consumption of excessive alcohol 
C)  Increased obesity rates due to consumption of junk food 
D)  Lower infant mortality due to the discovery of new vaccines A

Question 2

One justification for government involvement in research in general and medical research in particular is that research and innovation create ________.

Accepted Answer

A)  negative externalities 
B)  positive externalities 
C)  economies of scale 
D)  diseconomies of scale 
A)  negative externalities 
B)  positive externalities 
C)  economies of scale 
D)  diseconomies of scale B

Question 3

Thomas is a construction worker who earns $3,000 per month. He is offered a job of constructing a tall building in a city that has harsh weather conditions, for which he would be paid $3,500 a month. He takes up the job even though his previous job was less risky.
-Refer to the scenario above. If construction workers in that city face a 0.01% higher chance of meeting with a fatal accident. The value of his statistical life is ________.

Accepted Answer

A)  $1,000 
B)  $500,000 
C)  $1,000,000 
D)  $5,000,000 
A)  $1,000 
B)  $500,000 
C)  $1,000,000 
D)  $5,000,000 D

Question 4

According to the concept of hedonic analysis, how much a consumer is willing to pay for a good depends on_______.

Accepted Answer

A)  its attributes 
B)  its elasticity of supply 
C)  its elasticity of demand 
D)  the availability of complimentary goods 
A)  its attributes 
B)  its elasticity of supply 
C)  its elasticity of demand 
D)  the availability of complimentary goods

Question 5

A factory worker earned $1,500 per month. He left his previous job for a new one that paid him $200 more and required more physical effort.
-Refer to the scenario above. If there is a 0.03% higher chance of death in the new job, the value of the worker's statistical life is ________.

Accepted Answer

A)  $10,600.33 
B)  $42,000 
C)  $666,666.67 
D)  $1,500,000 
A)  $10,600.33 
B)  $42,000 
C)  $666,666.67 
D)  $1,500,000

Question 6

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y.
  
-Refer to the figure above. The marginal cost of reducing 20 tons of emission for Company Y is ________.

Accepted Answer

A)  $1,000 
B)  $2,000 
C)  $2,500 
D)  $3,000 
A)  $1,000 
B)  $2,000 
C)  $2,500 
D)  $3,000

Question 7

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit.
  
-Refer to the scenario above. The equilibrium output produced in the market is______ units

Accepted Answer

A)  300 
B)  400 
C)  500 
D)  600 
A)  300 
B)  400 
C)  500 
D)  600

Question 8

The figure below shows the demand, supply and marginal social cost curves for a steel plant.
  
-Refer to the scenario above. The equilibrium output produced in the market is _______units.

Accepted Answer

A)  150 
B)  200 
C)  250 
D)  300 
A)  150 
B)  200 
C)  250 
D)  300

Question 9

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit.
  
-Refer to the scenario above. The external cost at each level of output is ________.

Accepted Answer

A)  $1 
B)  $1.50 
C)  $2 
D)  $2.50 
A)  $1 
B)  $1.50 
C)  $2 
D)  $2.50

Question 10

James received two job offers. Both the companies required him to do the same work. However, Company A offered him a salary of $2,000 per month while Company B offered him a salary of $2,400. James decided to take up the first offer because Company A's office was closer to his house than Company B's office. The compensating differential that James is willing to pay in this case is _______.

Accepted Answer

A)  $400 
B)  $2,000 
C)  $2,400 
D)  $4,400 
A)  $400 
B)  $2,000 
C)  $2,400 
D)  $4,400

Question 11

A worker is willing to accept a high-risk job if he is paid $100 more than a low-risk job. This implies that _____.

Accepted Answer

A)  the worker is a risk lover 
B)  the worker's minimum wage is $100 
C)  the worker is willing to pay a price of $100 for lower risk 
D)  the worker earns an incentive of $100 per month 
A)  the worker is a risk lover 
B)  the worker's minimum wage is $100 
C)  the worker is willing to pay a price of $100 for lower risk 
D)  the worker earns an incentive of $100 per month

Question 12

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y.
  
-Refer to the figure above. Assume that firms are allowed to buy and sell permits. If the government allocates 30 pollution permits to each company and the price of each permit is $1,500, Company Y will reduce its emission to ________.

Accepted Answer

A)  10 tons 
B)  20 tons 
C)  30 tons 
D)  40 tons 
A)  10 tons 
B)  20 tons 
C)  30 tons 
D)  40 tons

Question 13

What was the effect of the Clean Air Act on housing prices according to economists Kenneth Chay and Michael Greenstone?

Accepted Answer

Chay and Greenstone estimated that there

Question 14

What is the importance of technology in the economics of climate change?

Accepted Answer

The most important too l available to us

Question 15

What are the usual tools used by the government to reduce pollution and protect the environment?

Accepted Answer

If cost-benefit analysis determines that

Question 16

If a worker decides to work at a job with a 0.05% probability of death for $5,000, what is the value of his statistical life?

Accepted Answer

A)  $250 
B)  $5,250 
C)  $5,500,000 
D)  $10,000,000 
A)  $250 
B)  $5,250 
C)  $5,500,000 
D)  $10,000,000

Question 17

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y.
  
-Refer to the figure above. If neither company spends money on pollution abatement, each of them will emit ________.

Accepted Answer

A)  0 ton 
B)  10 tons 
C)  40 tons 
D)  50 tons 
A)  0 ton 
B)  10 tons 
C)  40 tons 
D)  50 tons

Question 18

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc.
  
-Refer to the figure above. The marginal cost of reducing 100 tons of emission for Beta Inc. is ________.

Accepted Answer

A)  $100 
B)  $200 
C)  $400 
D)  $600 
A)  $100 
B)  $200 
C)  $400 
D)  $600

Question 19

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y.
  
-Refer to the scenario above. Suppose the government allocates 30 pollution permits to each company and the price of each permit is $1,500. Company ________ will spend ________on buying permits.

Accepted Answer

A)  X; $1,000 
B)  X; $1,500 
C)  Y; $10,000 
D)  Y; $15,000 
A)  X; $1,000 
B)  X; $1,500 
C)  Y; $10,000 
D)  Y; $15,000

Question 20

Thomas is a construction worker who earns $3,000 per month. He is offered a job of constructing a tall building in a city that has harsh weather conditions, for which he would be paid $3,500 a month. He takes up the job even though his previous job was less risky.
-Refer to the scenario above. His compensating differential is ________.

Accepted Answer

A)  $500 
B)  $3,000 
C)  $3,500 
D)  $4.000 
A)  $500 
B)  $3,000 
C)  $3,500 
D)  $4.000

Which of the following is an example of a negative externality?

One justification for government involvement in research in general and medical research in particular is that research and innovation create ________.

According to the concept of hedonic analysis, how much a consumer is willing to pay for a good depends on_______.

A factory worker earned $1,500 per month. He left his previous job for a new one that paid him $200 more and required more physical effort. -Refer to the scenario above. If there is a 0.03% higher chance of death in the new job, the value of the worker's statistical life is ________.

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y. -Refer to the figure above. The marginal cost of reducing 20 tons of emission for Company Y is ________.

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit. -Refer to the scenario above. The equilibrium output produced in the market is______ units

The figure below shows the demand, supply and marginal social cost curves for a steel plant. -Refer to the scenario above. The equilibrium output produced in the market is _______units.

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit. -Refer to the scenario above. The external cost at each level of output is ________.

A worker is willing to accept a high-risk job if he is paid $100 more than a low-risk job. This implies that _____.

What was the effect of the Clean Air Act on housing prices according to economists Kenneth Chay and Michael Greenstone?

What is the importance of technology in the economics of climate change?

What are the usual tools used by the government to reduce pollution and protect the environment?

If a worker decides to work at a job with a 0.05% probability of death for $5,000, what is the value of his statistical life?

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y. -Refer to the figure above. If neither company spends money on pollution abatement, each of them will emit ________.

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. The marginal cost of reducing 100 tons of emission for Beta Inc. is ________.

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y. -Refer to the scenario above. Suppose the government allocates 30 pollution permits to each company and the price of each permit is $1,500. Company will spend on buying permits.

Economic Methods and Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Consumers and Incentives,the Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Sellers and Incentives,aggregate Incomes

Perfect Competition and the Invisible Hand, Economic Growth

Trade and Why Isnt the Whole World Developed

Externalities and Public Goods, Employment and Unemployment

The Government in the Economy: Taxation and Regulation, Credit Markets

Markets for Factors of Production and the Monetary System

Monopoly and Short-Run Fluctuations

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk and Open Economy Macroeconomics

Social Economics and Auctions and Bargaining

Web: Financial Decision Making

Web: Political Economy

Filters

Exam 16: Web: Economics of Life, Health, and the Environment

Which of the following is an example of a negative externality?

One justification for government involvement in research in general and medical research in particular is that research and innovation create ________.

According to the concept of hedonic analysis, how much a consumer is willing to pay for a good depends on_______.

A factory worker earned $1,500 per month. He left his previous job for a new one that paid him $200 more and required more physical effort. -Refer to the scenario above. If there is a 0.03% higher chance of death in the new job, the value of the worker's statistical life is ________.

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y. -Refer to the figure above. The marginal cost of reducing 20 tons of emission for Company Y is ________.

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit. -Refer to the scenario above. The equilibrium output produced in the market is______ units

The figure below shows the demand, supply and marginal social cost curves for a steel plant. -Refer to the scenario above. The equilibrium output produced in the market is _______units.

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit. -Refer to the scenario above. The external cost at each level of output is ________.

A worker is willing to accept a high-risk job if he is paid $100 more than a low-risk job. This implies that _____.

What was the effect of the Clean Air Act on housing prices according to economists Kenneth Chay and Michael Greenstone?

What is the importance of technology in the economics of climate change?

What are the usual tools used by the government to reduce pollution and protect the environment?

If a worker decides to work at a job with a 0.05% probability of death for $5,000, what is the value of his statistical life?

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y. -Refer to the figure above. If neither company spends money on pollution abatement, each of them will emit ________.

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. The marginal cost of reducing 100 tons of emission for Beta Inc. is ________.

Economic Methods and Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Consumers and Incentives,the Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Sellers and Incentives,aggregate Incomes

Perfect Competition and the Invisible Hand, Economic Growth

Trade and Why Isnt the Whole World Developed

Externalities and Public Goods, Employment and Unemployment

The Government in the Economy: Taxation and Regulation, Credit Markets

Markets for Factors of Production and the Monetary System

Monopoly and Short-Run Fluctuations

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk and Open Economy Macroeconomics

Social Economics and Auctions and Bargaining

Web: Financial Decision Making

Web: Political Economy

Filters