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Question 15
Tradable emissions permits:
provide polluters with an incentive to take the marginal social cost of pollution into account.
are a form of subsidy.
give consumers an incentive to buy from environmental-friendly firms.
are a type of transaction cost.
Question 16
Which of the following is not a negative externality?
second-hand smoke
safety hazards of cell-phone use
technology spillovers
acid rain
Question 17
In some countries, motorists pay an extra fee to travel on congested highways at peak times. This extra fee serves to:
internalize the externality.
eliminate the externality.
subsidize a positive externality.
subsidize a technology spillover.
Question 18
If an emissions tax is imposed but it is less than the optimal Pigouvian tax, then:
the marginal social benefit of pollution is greater than the marginal social cost of pollution.
the marginal social cost of pollution is greater than the marginal social benefit of pollution.
total surplus will be maximized.
the amount of pollution will be less than the socially optimal amount.
Question 19
A system of tradable emissions permits ensures that:
there will be no pollution.
pollution will be at the level where marginal social benefit equals zero.
pollution will be at the level where marginal social cost equals zero.
those who can reduce pollution most cheaply will do so.
Question 20
Which of the following is an example of a positive externality?
a technology spillover
a Pigouvian tax
an environmental standard
a tradable emissions permit
Tradable emissions permits:
provide polluters with an incentive to take the marginal social cost of pollution into account.
are a form of subsidy.
give consumers an incentive to buy from environmental-friendly firms.
are a type of transaction cost.
Question 16
Which of the following is not a negative externality?
second-hand smoke
safety hazards of cell-phone use
technology spillovers
acid rain
Question 17
In some countries, motorists pay an extra fee to travel on congested highways at peak times. This extra fee serves to:
internalize the externality.
eliminate the externality.
subsidize a positive externality.
subsidize a technology spillover.
Question 18
If an emissions tax is imposed but it is less than the optimal Pigouvian tax, then:
the marginal social benefit of pollution is greater than the marginal social cost of pollution.
the marginal social cost of pollution is greater than the marginal social benefit of pollution.
total surplus will be maximized.
the amount of pollution will be less than the socially optimal amount.
Question 19
A system of tradable emissions permits ensures that:
there will be no pollution.
pollution will be at the level where marginal social benefit equals zero.
pollution will be at the level where marginal social cost equals zero.
those who can reduce pollution most cheaply will do so.
Question 20
Which of the following is an example of a positive externality?
a technology spillover
a Pigouvian tax
an environmental standard
a tradable emissions permit