Question 1

Costs incurred by the producer for the use of self-owned resources are called

Accepted Answer

A) Implicit costs 
B) Explicit costs 
C) Accounting costs 
D) Total costs 
E) Marginal costs 
A) Implicit costs 
B) Explicit costs 
C) Accounting costs 
D) Total costs 
E) Marginal costs A

Question 2

When the marginal private benefit of an activity does not equal the marginal social benefit,which of the following exists?

Accepted Answer

A) Positive externality 
B) Negative externality 
C) Externality in consumption 
D) Externality in production 
E) External cost 
A) Positive externality 
B) Negative externality 
C) Externality in consumption 
D) Externality in production 
E) External cost C

Question 3

An advantage of direct regulation as a method of controlling pollution is that

Accepted Answer

A) The optimal level of pollution control can be easily determined 
B) Pollution reduction quotas can be varied to remove pollution where it is least costly 
C) Emission control standards can be enforced readily 
D) Changes in the market are automatically 
E)  It seems straightforward and fair 
A) The optimal level of pollution control can be easily determined 
B) Pollution reduction quotas can be varied to remove pollution where it is least costly 
C) Emission control standards can be enforced readily 
D) Changes in the market are automatically 
E)  It seems straightforward and fair E

Question 4

When pollution rights markets are created,those firms who can reduce pollution most cheaply will do so.

Accepted Answer

A) True 
 B)False

Question 5

Water pollution is measured in terms of the amount of toxins in the water.

Accepted Answer

A) True 
 B)False

Question 6

Federal grants made to state and local governments for the construction of sewage treatment facilities encourage private industries to develop low pollution methods of production.

Accepted Answer

A) True 
 B)False

Question 7

When MPC is less than MSC,

Accepted Answer

A) Firms will tend to produce more than is socially optimal 
B) The price of the product will be higher than the competitive price 
C) The firm must be a monopolist 
D) The firm will produce less than is socially optimal 
E) There are positive externalities in production 
A) Firms will tend to produce more than is socially optimal 
B) The price of the product will be higher than the competitive price 
C) The firm must be a monopolist 
D) The firm will produce less than is socially optimal 
E) There are positive externalities in production

Question 8

Direct prohibition of pollution has the disadvantage of providing economic incentives for polluters not to pollutE.

Accepted Answer

A) True 
 B)False

Question 9

An upstream paper mill pollutes water used by a downstream water bottling plant,forcing the latter to clean the water it uses.Which of the following is true?

Accepted Answer

A) Both will over-produce 
B) The paper mill will under-produce and the bottling plant will over-produce 
C) The paper mill will over-produce and the bottling plant will under-produce 
D) Both will under-produce 
E) Neither will over-produce or under-produce 
A) Both will over-produce 
B) The paper mill will under-produce and the bottling plant will over-produce 
C) The paper mill will over-produce and the bottling plant will under-produce 
D) Both will under-produce 
E) Neither will over-produce or under-produce

Question 10

The most efficient way to control pollution is direct prohibition of polluting activities by the government.

Accepted Answer

A) True 
 B)False

Question 11

Net social benefits will always be increased by increasing pollution control if the marginal social benefit of the increase in pollution control is greater than the marginal social cost of additional control efforts.

Accepted Answer

A) True 
 B)False

Question 12

The Following Questions Refer to the graph below.  
-Social well-being would be enhanced if output of the water-using firm were to

Accepted Answer

A) Increase from the equilibrium output 
B) Decrease from the equilibrium output 
C) Be equal to the equilibrium output 
D) Be greater than Q3 
E) Be less than Q1 
A) Increase from the equilibrium output 
B) Decrease from the equilibrium output 
C) Be equal to the equilibrium output 
D) Be greater than Q3 
E) Be less than Q1

Question 13

If Jim starts a landscape business and uses a truck and a tractor that he owns to perform landscaping projects,we can conclude that

Accepted Answer

A) The costs of the truck and the tractor are low 
B) That the costs of the truck and the tractor are explicit costs 
C) There is no cost to the business since he owns both the truck and the tractor 
D) That the costs associated with both the truck and the tractor are implicit costs 
E) He should ask his accountant how to handle the costs 
A) The costs of the truck and the tractor are low 
B) That the costs of the truck and the tractor are explicit costs 
C) There is no cost to the business since he owns both the truck and the tractor 
D) That the costs associated with both the truck and the tractor are implicit costs 
E) He should ask his accountant how to handle the costs

Question 14

If polluters were forced to pay the full cost of their activities,the price of goods produced by polluting firms would risE.

Accepted Answer

A) True 
 B)False

Question 15

Pollution did not exist in any appreciable amounts prior to the Industrial Revolution.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following creates a positive externality in consumption?

Accepted Answer

A) Polluting a river 
B) Playing loud music 
C) Vaccinations 
D) Reducing the cost of producing of another good 
E) Strip mining 
A) Polluting a river 
B) Playing loud music 
C) Vaccinations 
D) Reducing the cost of producing of another good 
E) Strip mining

Question 17

Direct or mandatory control imposed by government on polluters presupposes that the regulatory body can

Accepted Answer

A) Determine what the desirable limits of pollution are 
B) Determine where the marginal costs of pollution are greatest 
C) Enforce standards 
D) B and c 
E) All of the above 
A) Determine what the desirable limits of pollution are 
B) Determine where the marginal costs of pollution are greatest 
C) Enforce standards 
D) B and c 
E) All of the above

Question 18

The Following Questions Refer to the graph below.  
-The value of well-being lost due to over-production of the polluting firm's product is equal to area

Accepted Answer

A) Acd 
B) Abd 
C) Deg 
D) Dgf 
E) This cannot be shown in the diagram 
A) Acd 
B) Abd 
C) Deg 
D) Dgf 
E) This cannot be shown in the diagram

Question 19

A market for pollution rights is an efficient approach to pollution control because

Accepted Answer

A) It is cheap to implement 
B) It leads to the complete elimination of pollution 
C) It causes the pollution to be eliminated at the lowest cost 
D) It is easy to enforce 
E) None of the above 
A) It is cheap to implement 
B) It leads to the complete elimination of pollution 
C) It causes the pollution to be eliminated at the lowest cost 
D) It is easy to enforce 
E) None of the above

Question 20

Payment by a firm to hire a worker is an example of a(n)

Accepted Answer

A) Implicit cost 
B) Explicit cost 
C) Opportunity cost 
D) Total cost 
E) Marginal cost 
A) Implicit cost 
B) Explicit cost 
C) Opportunity cost 
D) Total cost 
E) Marginal cost

Costs incurred by the producer for the use of self-owned resources are called

When the marginal private benefit of an activity does not equal the marginal social benefit,which of the following exists?

An advantage of direct regulation as a method of controlling pollution is that

When pollution rights markets are created,those firms who can reduce pollution most cheaply will do so.

Water pollution is measured in terms of the amount of toxins in the water.

Federal grants made to state and local governments for the construction of sewage treatment facilities encourage private industries to develop low pollution methods of production.

When MPC is less than MSC,

Direct prohibition of pollution has the disadvantage of providing economic incentives for polluters not to pollutE.

An upstream paper mill pollutes water used by a downstream water bottling plant,forcing the latter to clean the water it uses.Which of the following is true?

The most efficient way to control pollution is direct prohibition of polluting activities by the government.

Net social benefits will always be increased by increasing pollution control if the marginal social benefit of the increase in pollution control is greater than the marginal social cost of additional control efforts.

The Following Questions Refer to the graph below. -Social well-being would be enhanced if output of the water-using firm were to

If Jim starts a landscape business and uses a truck and a tractor that he owns to perform landscaping projects,we can conclude that

If polluters were forced to pay the full cost of their activities,the price of goods produced by polluting firms would risE.

Pollution did not exist in any appreciable amounts prior to the Industrial Revolution.

Which of the following creates a positive externality in consumption?

Direct or mandatory control imposed by government on polluters presupposes that the regulatory body can

The Following Questions Refer to the graph below. -The value of well-being lost due to over-production of the polluting firm's product is equal to area

A market for pollution rights is an efficient approach to pollution control because

Payment by a firm to hire a worker is an example of a(n)

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Monopoly Power: Can Markets Be Controlled

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

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Exam 4: Pollution Problems: Must We Foul Our Own Nests

Costs incurred by the producer for the use of self-owned resources are called

When the marginal private benefit of an activity does not equal the marginal social benefit,which of the following exists?

An advantage of direct regulation as a method of controlling pollution is that

When pollution rights markets are created,those firms who can reduce pollution most cheaply will do so.

Water pollution is measured in terms of the amount of toxins in the water.

Federal grants made to state and local governments for the construction of sewage treatment facilities encourage private industries to develop low pollution methods of production.

When MPC is less than MSC,

Direct prohibition of pollution has the disadvantage of providing economic incentives for polluters not to pollutE.

An upstream paper mill pollutes water used by a downstream water bottling plant,forcing the latter to clean the water it uses.Which of the following is true?

The most efficient way to control pollution is direct prohibition of polluting activities by the government.

Net social benefits will always be increased by increasing pollution control if the marginal social benefit of the increase in pollution control is greater than the marginal social cost of additional control efforts.

The Following Questions Refer to the graph below. -Social well-being would be enhanced if output of the water-using firm were to

If Jim starts a landscape business and uses a truck and a tractor that he owns to perform landscaping projects,we can conclude that

If polluters were forced to pay the full cost of their activities,the price of goods produced by polluting firms would risE.

Pollution did not exist in any appreciable amounts prior to the Industrial Revolution.

Which of the following creates a positive externality in consumption?

Direct or mandatory control imposed by government on polluters presupposes that the regulatory body can

The Following Questions Refer to the graph below. -The value of well-being lost due to over-production of the polluting firm's product is equal to area

A market for pollution rights is an efficient approach to pollution control because

Payment by a firm to hire a worker is an example of a(n)

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Monopoly Power: Can Markets Be Controlled

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

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