ECON 200 Lecture Notes - Lecture 25: Cost, Externality, Social Cost
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QUESTION 16
Positive externalities exist because:
a. |
internal benefits are greater than external benefits. |
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b. |
internal benefits are greater than social benefits. |
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c. |
internal benefits are less than external benefits. |
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d. |
external benefits are greater than social benefits. |
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e. |
internal benefits are less than social benefits. |
QUESTION 17
What is a black market?
a. |
It is an illegal market that emerges when binding price ceilings are in place. |
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b. |
It is an illegal market that emerges when only binding price ceilings and binding price floors are in place. |
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c. |
It is an illegal market that emerges when no price controls are present. |
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d. |
It is an illegal market that emerges when binding and nonbinding price controls are in |
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e. |
It is an illegal market that emerges when binding price floors are in place. |
QUESTION 18
The personal decisions of consumers and firms are based on:
a. |
external costs. |
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b. |
public-good costs. |
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c. |
third-party costs. |
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d. |
internal costs. |
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e. |
social cost. |
QUESTION 19
When the price is _________ the equilibrium price, we would expect there to be a _________, causing the market to put _________ pressure on the price until it went back to the equilibrium price.
a. |
below; shortage; downward |
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b. |
above; shortage; downward |
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c. |
above; surplus; upward |
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d. |
above; surplus; downward |
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e. |
below; surplus; upward |
In Chapter 6, Boyes focuses on negative externalities such as the various types of pollution. However, as we discussed during our online session, we can also observe positive externalities in which external benefits are generated for people. Which of the following is NOT an example of a positive externality?
A. | Workers can help one another to "cover the phones" and make sure that someone is always available to help clients | |
B. | Workers can provide ideas to one another about how to solve problems | |
C. | Workers can form carpools and use other means to reduce commuting costs | |
D. | All of these cases are examples of positive externalities |