1.) The socially optimal quantity of pollution occurs where:
A.) the marginal social benefit of pollution is equal to the marginal social cost of pollution.
B.) the marginal social benefit of pollution is greater than the marginal social cost of pollution.
C.) the marginal social benefit of pollution is less than the marginal social cost of pollution.
D.) there is no pollution.
2.)An external benefit is a
:
a example of a negative externality.
b benefit that accrues to domestic firms due to the actions of foreign (external) firms.
c benefit that accrues to foreign (external) firms due to the actions of domestic firms.
d benefit that individuals or firms confer on others without receiving compensation.
3.)3.
An externality is said to be internalized:
a when individuals take external costs and benefits into account in their decision making.
b in situations in which the Coase theorem is irrelevant or cannot be applied.
c when individuals successfully petition the government to ban or restrict activities that generate negative externalities.
d when individuals learn to adapt to negative externalities through introspection or internal acceptance of what are viewed as unchangeable facts of life.
4.) 4.
A negative externality:
a is any cost above the economic cost.
b equals the social cost plus the firm's private cost.
c is an uncompensated cost imposed by an individual or firm on others.
d equals the opportunity cost minus the social costs.
5.)
With tradable emissions permits, the price of the permit is determined by:
a the government.
b the supply and demand of permits.
c environmental protection organizations.
d the World Trade Organization.
6.)The two principles of tax fairness are:
a the minimize distortions principle and the maximize revenue principle.
b the benefits principle and the ability-to-pay principle.
c the proportional tax principle and the ability-to-pay principle.
d the equity principle and the efficiency principle.
7.)The structure of the U.S. federal income tax system reflects the:
a tax-efficiency principle.
b ability-to-pay principle.
c benefit principle.
d lump-sum tax principle.
8.)Which of the following transactions represents a transfer payment?
a The government pays an employee by making a direct transfer to the employee's bank account.
b An army officer, paid by the government, transfers part of the money he receives back to the government to pay his taxes.
c A senior citizen receives a social-security payment.
d All of the above.
9.)Food stamps, Medicaid, and housing subsidies are all examples of:
a a negative income tax.
b welfare payments.
c in-kind transfers.
d the Temporary Assistance for Needy Families program.
10.)A tax that rises less than in proportion to income is described as:
a progressive.
b proportional.
c regressive.
d structural.
A.) the marginal social benefit of pollution is equal to the marginal social cost of pollution.
B.) the marginal social benefit of pollution is greater than the marginal social cost of pollution.
C.) the marginal social benefit of pollution is less than the marginal social cost of pollution.
D.) there is no pollution.
2.)An external benefit is a
:a example of a negative externality.
b benefit that accrues to domestic firms due to the actions of foreign (external) firms.
c benefit that accrues to foreign (external) firms due to the actions of domestic firms.
d benefit that individuals or firms confer on others without receiving compensation.
3.)3.
An externality is said to be internalized:
a when individuals take external costs and benefits into account in their decision making.
b in situations in which the Coase theorem is irrelevant or cannot be applied.
c when individuals successfully petition the government to ban or restrict activities that generate negative externalities.
d when individuals learn to adapt to negative externalities through introspection or internal acceptance of what are viewed as unchangeable facts of life.
4.) 4.
A negative externality:
a is any cost above the economic cost.
b equals the social cost plus the firm's private cost.
c is an uncompensated cost imposed by an individual or firm on others.
d equals the opportunity cost minus the social costs.
5.)
With tradable emissions permits, the price of the permit is determined by:
a the government.
b the supply and demand of permits.
c environmental protection organizations.
d the World Trade Organization.
6.)The two principles of tax fairness are:
a the minimize distortions principle and the maximize revenue principle.
b the benefits principle and the ability-to-pay principle.
c the proportional tax principle and the ability-to-pay principle.
d the equity principle and the efficiency principle.
7.)The structure of the U.S. federal income tax system reflects the:
a tax-efficiency principle.
b ability-to-pay principle.
c benefit principle.
d lump-sum tax principle.
8.)Which of the following transactions represents a transfer payment?
a The government pays an employee by making a direct transfer to the employee's bank account.
b An army officer, paid by the government, transfers part of the money he receives back to the government to pay his taxes.
c A senior citizen receives a social-security payment.
d All of the above.
9.)Food stamps, Medicaid, and housing subsidies are all examples of:
a a negative income tax.
b welfare payments.
c in-kind transfers.
d the Temporary Assistance for Needy Families program.
10.)A tax that rises less than in proportion to income is described as:
a progressive.
b proportional.
c regressive.
d structural.