Absence of Government on An Under-Allocation of Resources
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Absence of Government on An Under-Allocation of Resources
Economics Quiz 40 Questions
Question 1 of 40 2.5 Points
In the absence of government, an under-allocation of resources generally exists for __________ .
- goods with external costs
- imported goods and services
- public goods
- all of the above
Question 2 of 40 2.5 Points
Once a firm is forced to consider an external cost, the price of its product will __________ .
- increase and output will decrease
- increase and output will increase
- decrease and output will decrease
- decrease and output will increase
Question 3 of 40 2.5 Points
The biggest problem with using a tax as a way to solve an externality problem is that __________ .
- the tax sometimes increases the external cost
- damages must be estimated in financial terms to determine the correct level of the tax
- the firm will pass the entire tax onto the consumer
- the commerce clause forbids such taxes
Question 4 of 40 2.5 Points
If a producer is imposing an external cost on society, the best response would be to __________ .
- lower the producer’s taxes to offset pollution
- increase the production
- internalize the externality
- subsidize the producer
Question 5 of 40 2.5 Points
When the government imposes a tax on a firm that generates external costs, the tax is __________ .
- always borne entirely by the firm
- always borne entirely by the consumer
- usually borne by both the firm and the consumer
- borne only by the government
Question 6 of 40 2.5 Points
Recall the application about the marginal cost and marginal benefit of reducing methane emissions. What does the optimal level of methane abatement depend on?
- the level at which the polluting firms are able to maximize their profits
- the total cost of abatement
- the marginal benefit of abatement
- It is not possible to determine an optimal level of methane.
Question 7 of 40 2.5 Points
Which of the following would be an example of an external benefit?
- More people start to ride the bus and as a result air pollution is reduced.
- Firms are able to reduce their costs of production by using a more efficient technology.
- The government requires polluting firms to pay a special tax.
- A firm has just gotten permission to open a landfill on property that is adjacent to your home.
Question 8 of 40 2.5 Points
The idea behind the pollution tax equal to the external cost per unit of pollution is to __________ .
- increase the social benefit to be above the marginal cost
- internalize the externality
- allow the firm to evade external costs
- drive polluting firms out of developed countries
Question 9 of 40 2.5 Points
When the government taxes a firm that generates an external cost, the profit maximizing firm will produce __________ .
- more units of output than before the tax was imposed
- the same number of units of output as before the tax was imposed
- fewer units of output than before the tax was imposed
- either more or fewer units of output than before the tax was imposed
Question 10 of 40 2.5 Points
Based on society’s perspective, what are the benefits from pollution abatement?
- better health
- increased enjoyment of the natural environment
- lower production costs
- all of the above
Question 11 of 40 2.5 Points
An external cost of production is __________ .
- a cost incurred by someone other than the producer
- the production cost borne by a producer
- the result of the sum of private and social cost
- another word for a tax
Question 12 of 40 2.5 Points
If, while producing goods and services, a factory is producing pollution and not incurring the cost of this pollution, then a(n) __________ exists.
- government failure
- market failure
- acceptable outcome
- none of the above
Question 13 of 40 2.5 Points
Sirens located around a town to warn citizens of the approach of a tornado are an example of __________ .
- an external cost
- a private good
- a common resource
- a public good
Question 14 of 40 2.5 Points
The government imposes taxes on firms that generate external costs in an effort to __________ .
- make it easier for economists to measure external costs
- lead to a zero level of output
- force decision makers to consider the full costs of their actions
- lower the firms’ costs of production
Question 15 of 40 2.5 Points
Goods that are nonrival in consumption and that have benefits that are nonexcludable are __________ .
- private goods
- neighbor effects
- public goods
- none of the above
Question 16 of 40 2.5 Points
Markets that have external costs will produce __________ output than the socially efficient level, whereas markets that have external benefits will produce __________ output than the socially efficient level.
- less; less
- more; more
- more; less
- less; more
Question 17 of 40 2.5 Points
A harbor lighthouse that guides approaching ships is an example of __________ .
- a public good
- a private good
- a monopoly
- a good that is rival
Question 18 of 40 2.5 Points
Private goods are __________ .
- rival in consumption and their benefits are excludable
- nonrival in consumption and their benefits are excludable
- nonrival in consumption and their benefits are nonexcludable
- rival in consumption and their benefits are nonexcludable
Question 19 of 40 2.5 Points
Public goods are __________ .
- rival in consumption and their benefits are excludable
- nonrival in consumption and their benefits are excludable
- nonrival in consumption and their benefits are nonexcludable
- rival in consumption and their benefits are nonexcludable
Question 20 of 40 2.5 Points
If the government taxes a firm that is generating an external cost, the price of the firm’s product will __________ .
- increase and output will decrease
- increase and output will increase
- decrease and output will decrease
- decrease and output will increase
Question 21 of 40 2.5 Points
The short run can be defined as any period of time __________ .
- less than one year
- in which some inputs are fixed
- in which all inputs are variable
- in which price is fixed
Question 22 of 40 2.5 Points
Dan owns a factory that manufactures smartphones. He has many costs every month to keep his factory running. Which of the following is one of Dan’s fixed costs?
- plastic used to make the smartphones
- his electricity bill for the factory
- his mortgage on the factory
- memory devices used to store music and video on the smartphones
Question 23 of 40 2.5 Points
Dan is an entrepreneur who invests in commercial and residential real estate. He has a savings account with $100,000 that earns 1% APY. Dan wants to buy a house that will give him a monthly cash inflow of $200. What will be the opportunity cost of investing in the house?
- $1,000
- $1,200
- $800
- $200
Question 24 of 40 2.5 Points
Juan is consuming three sandwiches and six sodas. If a sandwich costs twice as much as a soda, then __________ .
- Juan should buy more sodas
- Juan should buy more sandwiches
- Juan is maximizing his utility if he derives twice as much utility from the last soda as from the last sandwich
- Juan is maximizing his utility if he derives twice as much utility from the last sandwich as from the last soda
Question 25 of 40 2.5 Points
Consumers should allocate their scarce income so that __________ .
- the marginal utility for all goods consumed is zero
- the marginal utility for all goods consumed is equal
- the marginal utility divided by price is equal for all goods consumed
- the marginal utility divided by price is maximized for all goods consumed
Question 26 of 40 2.5 Points
Suppose that / </ . This implies that __________ .
- spending a dollar less on Y and spending a dollar more on X increases utility
- spending a dollar less on X and spending a dollar more on Y increases utility
- X is more expensive than Y
- Y is more expensive than X
Question 27 of 40 2.5 Points
Brandon eats four slices of pizza on a Sunday night but admits each slice of pizza doesn’t taste as delicious as the previous one. This suggests that for Brandon __________ .
- the marginal utility of a slice of pizza is positive but decreasing
- the marginal utility of a slice of pizza is negative but increasing
- the total utility of slice of pizza is declining by larger and larger increments
- the total utility of slice of pizza is increasing by larger and larger increments
Question 28 of 40 2.5 Points
Sarah has a savings account with a $1,000 balance that earns 3% APY. She decides to withdraw the entire balance to buy a laptop computer. What will be her opportunity cost in buying the laptop?
- the cost of the laptop
- the foregone interest
- the foregone interest and the cost of the laptop
- the cost of the laptop minus the foregone interest
Question 29 of 40 2.5 Points
The equimarginal rule __________ .
- equates the marginal utility per dollar spent on each good purchased
- states that in order to maximize utility the consumer should buy more of those goods with a high marginal utility
- states that in order to maximize utility the consumer should buy more of those goods that cost less
- none of the above
Absence of Government on An Under-Allocation of Resources
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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