Question 1

Which of the following prohibits price discrimination?

Accepted Answer

A)   The Sherman Act
B)   The Clayton Act
C)   The Federal Trade Commission Act
D)   The Full Employment and Balanced Growth ActE) B) and C)
F) C) and D)

Question 2

Suppose a coal burning plant is emitting excessive pollution into the air.Suggest two ways the government can deal with this market failure.

Accepted Answer

The two ways that government has to deal...

Question 3

Table 9.2 
-In Table 9.2,which firm has the lowest absolute level of costs borne directly by the producer?

Accepted Answer

A)   Firm A
B)   Firm B
C)   Firm C
D)   Firm DE) A) and B)
F) C) and D)

Question 4

An emission charge is a:

Accepted Answer

A)   Tax on the consumption of goods that are produced by pollution-causing firms.
B)   Fee imposed on polluters based on the quantity of pollution they impose on society.
C)   Tax levied on the third parties involved in externalities.
D)   Fee imposed on free-riders for the use of a good or service.E) B) and D)
F) A) and C)

Question 5

This table contains data on the social costs and benefits incurred in improving water quality in a lake.Complete the table and answer the question(s) below.
Table 9.1-Costs of reducing water pollution 
-In Table 9.1,what is the marginal social cost (in dollars per PPM) of reducing pollution rates from 35 to 25 PPM?

Accepted Answer

A)   $1
B)   $5
C)   $7
D)   $10E) A) and B)
F) B) and D)

Question 6

The optimal mix of output is:

Accepted Answer

A)   the most desirable combination of output attainable with existing resources,technology and social values.
B)   an attempt to compare the real worth rather than the market values to various goods and services.
C)   an exercise to determine if is better to reduce government expenditures or reduce taxes.
D)   the most desirable level of the distribution of income.E) C) and D)
F) B) and D)

Question 7

Which of the following is most likely a private good?

Accepted Answer

A)   Flood control
B)   Military protection
C)   Food
D)   BridgesE) A) and C)
F) A) and B)

Question 8

The market tends to overproduce public goods and under produce private goods.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following leads to market failure?

Accepted Answer

A)   Regulation.
B)   Market power.
C)   Antitrust laws.
D)   Government planning.E) A) and B)
F) A) and C)

Question 10

Which of the following is not an example of market failure?

Accepted Answer

A)   Public goods.
B)   Government intervention.
C)   Market power.
D)   Externalities.E) None of the above
F) All of the above

Question 11

Macro instability refers to the underproduction of public goods.

Accepted Answer

A) True 
 B)False

Question 12

The communal nature of a highway means that no one individual is motivated to pay for it because even those who do not pay will still benefit from using it.This is an example of:

Accepted Answer

A)   The free-rider dilemma.
B)   Government failure.
C)   Inequity.
D)   A natural monopoly.E) C) and D)
F) B) and D)

Question 13

Social Security benefits are not an income transfer since individuals contribute to the fund during their working years.

Accepted Answer

A) True 
 B)False

Question 14

The federal government's role in antitrust enforcement is justified by considerations of:

Accepted Answer

A)   Equity.
B)   Public goods and externalities.
C)   Market power.
D)   Macro failure.E) C) and D)
F) A) and D)

Question 15

If a system of emission charges forces firms to internalize all external costs:

Accepted Answer

A)   Relative prices of polluting activities will rise.
B)   The elimination of externalities will fully compensate for any excessive market power.
C)   The elimination of externalities will allow greater production of all goods and services.
D)   Pollution will increase.E) A) and D)
F) A) and C)

Question 16

Figure 9.3:   
-In Figure 9.3,if the rate of output is 320 units:

Accepted Answer

A)   Social costs equal private costs.
B)   Social costs exceed private costs.
C)   Private costs exceed social costs.
D)   External costs equal private costs.E) A) and D)
F) B) and C)

Question 17

Externalities are always harmful to third parties.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not a goal of macro intervention?

Accepted Answer

A)   Price stability.
B)   Market power.
C)   Full employment.
D)   Economic growth.E) B) and D)
F) All of the above

Question 19

If a good generates an external cost,the market will produce:

Accepted Answer

A)   Some of the good but not enough.
B)   Too much of the good.
C)   An optimal amount of the good.
D)   None of the gooD.E) A) and B)
F) A) and C)

Question 20

In economics,a public good:

Accepted Answer

A)   Is any good produced by the government.
B)   Always causes government failure.
C)   Is provided in an optimal amount by the market.
D)   Allows free riders to benefit from the good.E) A) and B)
F) All of the above

Exam 9: Government Intervention

The optimal mix of output is:

Correct Answer
verified

In economics,a public good:

Correct Answer
verified

Which of the following is most likely a private good?

Correct Answer
verified

Table 9.2 -In Table 9.2,which firm has the lowest absolute level of costs borne directly by the producer?

Correct Answer
verified

The communal nature of a highway means that no one individual is motivated to pay for it because even those who do not pay will still benefit from using it.This is an example of:

Correct Answer
verified

Which of the following leads to market failure?

Correct Answer
verified

Which of the following prohibits price discrimination?

Correct Answer
verified

The federal government's role in antitrust enforcement is justified by considerations of:

Correct Answer
verified

If a good generates an external cost,the market will produce:

Correct Answer
verified

Externalities are always harmful to third parties.

Correct Answer
verified

Social Security benefits are not an income transfer since individuals contribute to the fund during their working years.

Correct Answer
verified

The market tends to overproduce public goods and under produce private goods.

Correct Answer
verified

Macro instability refers to the underproduction of public goods.

Correct Answer
verified

If a system of emission charges forces firms to internalize all external costs:

Correct Answer
verified

Correct Answer
verified

Which of the following is not a goal of macro intervention?

Correct Answer
verified

Suppose a coal burning plant is emitting excessive pollution into the air.Suggest two ways the government can deal with this market failure.

Correct Answer
verified
The two ways that government has to deal...
View Answer

An emission charge is a:

Correct Answer
verified

Which of the following is not an example of market failure?

Correct Answer
verified

Figure 9.3: -In Figure 9.3,if the rate of output is 320 units:

Correct Answer
verified

Exam 9: Government Intervention

The optimal mix of output is:

Correct AnswerverifiedShow Answer

In economics,a public good:

Correct AnswerverifiedShow Answer

Which of the following is most likely a private good?

Correct AnswerverifiedShow Answer

Table 9.2 -In Table 9.2,which firm has the lowest absolute level of costs borne directly by the producer?

Correct AnswerverifiedShow Answer

The communal nature of a highway means that no one individual is motivated to pay for it because even those who do not pay will still benefit from using it.This is an example of:

Correct AnswerverifiedShow Answer

Which of the following leads to market failure?

Correct AnswerverifiedShow Answer

Which of the following prohibits price discrimination?

Correct AnswerverifiedShow Answer

The federal government's role in antitrust enforcement is justified by considerations of:

Correct AnswerverifiedShow Answer

If a good generates an external cost,the market will produce:

Correct AnswerverifiedShow Answer

Externalities are always harmful to third parties.

Correct AnswerverifiedShow Answer

Social Security benefits are not an income transfer since individuals contribute to the fund during their working years.

Correct AnswerverifiedShow Answer

The market tends to overproduce public goods and under produce private goods.

Correct AnswerverifiedShow Answer

Macro instability refers to the underproduction of public goods.

Correct AnswerverifiedShow Answer

If a system of emission charges forces firms to internalize all external costs:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a goal of macro intervention?

Correct AnswerverifiedShow Answer

Suppose a coal burning plant is emitting excessive pollution into the air.Suggest two ways the government can deal with this market failure.

Correct AnswerverifiedThe two ways that government has to deal...View AnswerShow Answer

An emission charge is a:

Correct AnswerverifiedShow Answer

Which of the following is not an example of market failure?

Correct AnswerverifiedShow Answer

Figure 9.3: -In Figure 9.3,if the rate of output is 320 units:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The two ways that government has to deal...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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