Liberty University ECON 213 Quiz 7

·  Question 1

2 out of 2 points

A carbon tax would be an efficient method of addressing the problem of global warming because:

·  Question 2

0 out of 2 points

When a negative externality is not internalized, then the equilibrium price of the good produced is too __________ and the equilibrium quantity produced is too __________.

·  Question 3

2 out of 2 points

The government identifies a situation where production of a good is generating a negative externality. A reasonable option for the government to consider is to:

·  Question 4

2 out of 2 points

The pollution emitted by your car is an example of a(n):

·  Question 5

2 out of 2 points

If government regulation forces firms in an industry to internalize the externality, then the:

·  Question 6

2 out of 2 points

The third-party problem:

·  Question 7

2 out of 2 points

Congestion charges cause the price of driving to __________. Therefore, the number of cars on the road will __________.

·  Question 8

0 out of 2 points

Refer to the accompanying table, where Q represents the quantity produced, internal cost and external cost are given for various quantities, and P represents the price consumers are willing to pay for various quantities.

The social optimum occurs where price is __________ and quantity is __________.

·  Question 9

2 out of 2 points

The costs or benefits of a market activity that affect a third party are called:

·  Question 10

2 out of 2 points

Driving in the city is an example of a good that is:

·  Question 11

2 out of 2 points

Your roommate is studying to be a chef and likes to try new recipes. He leaves his delicious creations in the refrigerator for anyone who wants to eat them. The food he leaves is always gone within a day. This is an example of:

·  Question 12

0 out of 2 points

The personal decisions of consumers and firms are based on:

·  Question 13

2 out of 2 points

A major reason why public goods are not supplied by the market is the:

·  Question 14

0 out of 2 points

The city decides to offer a subsidy to each homeowner’s association that plants more flowers in their common areas. In the market for flowers, this will cause the:

·  Question 15

2 out of 2 points

The amount you pay for gasoline for your car is an example of a(n):