the great one
New member
Question 1
Acid rain is caused by:
automobile exhaust.
coal-burning power plants.
oil refineries.
global warming.
Question 2
Suppose chicken farm waste flowed into a river used by a neighbor for drinking water. The Coase Theorem applies when the legal rights to the river are given:
to the chicken farm.
to the neighbor.
to either the chicken farm or the neighbor.
to neither the chicken farm nor the neighbor.
Question 3
Tradable emissions permits are used to:
reduce sulfur dioxide emissions by requiring firms to pay a pollution tax.
encourage firms to reduce sulfur dioxide emissions by allowing the sale of excess permits.
decrease consumption as the producer passes the full cost of the permit onto the consumer.
impose a tax on SO2 emissions that is paid by the firm and is a source of tax revenues for the federal government.
Question 4
Suppose a farmer in Nebraska incurs $8,700 in crop damage from sparks that are created when a local railroad company sends trains along tracks bordering the farm. This damage can be best described as:
a negative externality.
a positive externality.
a transaction cost.
a social benefit.
Question 5
The optimal Pigouvian tax is equal to:
the marginal social benefit of pollution at the market-determined level of pollution.
the marginal social cost of pollution at the market-determined level of pollution.
the marginal social benefit when there is zero pollution.
the marginal social cost of pollution at the socially optimal quantity of pollution.
Question 6
Since the United States passed the Clean Air Act in 1970, overall emission of pollutants into the air has:
fallen by 90%.
fallen by more than a third.
remained constant.
slightly increased due to increasing population.
Question 7
An emissions fee equal to the optimal Pigouvian tax on coal has the effect of _____________ the externality associated with the burning of coal while ensuring that the marginal benefit of pollution _________ the marginal cost of pollution.
worsening, equals
lessening, is greater than
internalizing, is less than
internalizing, equals
Question 8
Apartment dwellers near Wrigley Field in Chicago are often able to watch the Chicago Cubs baseball team play from the roof of their apartment building, without having to pay the cost of buying a ticket. This is an example of:
a marginal social cost.
a negative externality.
a positive externality.
a deadweight loss.
Question 9
An emissions tax equal to __ __ induces polluters to internalize the externality and leads to the socially optimal quantity of pollution.
the marginal social cost of pollution at the socially optimal quantity of pollution
the marginal social benefit of pollution at the market-determined level of pollution
the marginal social cost of pollution at the market-determined level of pollution
the marginal social benefit at zero pollution
Question 10
Suppose the local government decides to tax emission of sulfur dioxide. The optimal Pigouvian tax equals:
the marginal cost of production at the socially optimal quantity of pollution.
the marginal social cost of pollution at the socially optimal quantity of pollution.
the marginal social cost of pollution when the quantity of pollution is zero.
the marginal cost of production when the quantity of pollution is zero
Question 11
Acid rain is harmful to all of the following except:
trees.
fish.
limestone buildings.
asphalt pavement.
Question 12
The Coase Theorem asserts that:
government intervention is necessary to deal with externalities.
there are no costs associated with pollution abatement.
when there are external costs, the industry supply curve reflects the true social costs.
when externalities are present, an economy can reach an efficient solution as long as transactions costs are not too high.
Question 13
A subsidy is a legitimate policy option when:
there are external benefits arising from an activity.
tradable permits are issued.
there are marginal social costs arising from an activity.
there are external costs arising from an activity.
Question 14
When an emissions tax is imposed on production of a good, then the price will be ______ than it would be in the absence of the tax, and the equilibrium quantity will be ______ :
higher, higher
lower, lower
lower, higher
higher, lower
Acid rain is caused by:
automobile exhaust.
coal-burning power plants.
oil refineries.
global warming.
Question 2
Suppose chicken farm waste flowed into a river used by a neighbor for drinking water. The Coase Theorem applies when the legal rights to the river are given:
to the chicken farm.
to the neighbor.
to either the chicken farm or the neighbor.
to neither the chicken farm nor the neighbor.
Question 3
Tradable emissions permits are used to:
reduce sulfur dioxide emissions by requiring firms to pay a pollution tax.
encourage firms to reduce sulfur dioxide emissions by allowing the sale of excess permits.
decrease consumption as the producer passes the full cost of the permit onto the consumer.
impose a tax on SO2 emissions that is paid by the firm and is a source of tax revenues for the federal government.
Question 4
Suppose a farmer in Nebraska incurs $8,700 in crop damage from sparks that are created when a local railroad company sends trains along tracks bordering the farm. This damage can be best described as:
a negative externality.
a positive externality.
a transaction cost.
a social benefit.
Question 5
The optimal Pigouvian tax is equal to:
the marginal social benefit of pollution at the market-determined level of pollution.
the marginal social cost of pollution at the market-determined level of pollution.
the marginal social benefit when there is zero pollution.
the marginal social cost of pollution at the socially optimal quantity of pollution.
Question 6
Since the United States passed the Clean Air Act in 1970, overall emission of pollutants into the air has:
fallen by 90%.
fallen by more than a third.
remained constant.
slightly increased due to increasing population.
Question 7
An emissions fee equal to the optimal Pigouvian tax on coal has the effect of _____________ the externality associated with the burning of coal while ensuring that the marginal benefit of pollution _________ the marginal cost of pollution.
worsening, equals
lessening, is greater than
internalizing, is less than
internalizing, equals
Question 8
Apartment dwellers near Wrigley Field in Chicago are often able to watch the Chicago Cubs baseball team play from the roof of their apartment building, without having to pay the cost of buying a ticket. This is an example of:
a marginal social cost.
a negative externality.
a positive externality.
a deadweight loss.
Question 9
An emissions tax equal to __ __ induces polluters to internalize the externality and leads to the socially optimal quantity of pollution.
the marginal social cost of pollution at the socially optimal quantity of pollution
the marginal social benefit of pollution at the market-determined level of pollution
the marginal social cost of pollution at the market-determined level of pollution
the marginal social benefit at zero pollution
Question 10
Suppose the local government decides to tax emission of sulfur dioxide. The optimal Pigouvian tax equals:
the marginal cost of production at the socially optimal quantity of pollution.
the marginal social cost of pollution at the socially optimal quantity of pollution.
the marginal social cost of pollution when the quantity of pollution is zero.
the marginal cost of production when the quantity of pollution is zero
Question 11
Acid rain is harmful to all of the following except:
trees.
fish.
limestone buildings.
asphalt pavement.
Question 12
The Coase Theorem asserts that:
government intervention is necessary to deal with externalities.
there are no costs associated with pollution abatement.
when there are external costs, the industry supply curve reflects the true social costs.
when externalities are present, an economy can reach an efficient solution as long as transactions costs are not too high.
Question 13
A subsidy is a legitimate policy option when:
there are external benefits arising from an activity.
tradable permits are issued.
there are marginal social costs arising from an activity.
there are external costs arising from an activity.
Question 14
When an emissions tax is imposed on production of a good, then the price will be ______ than it would be in the absence of the tax, and the equilibrium quantity will be ______ :
higher, higher
lower, lower
lower, higher
higher, lower