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QUESTION 16

Positive externalities exist because:

  a.

internal benefits are greater than external benefits.
  b.

internal benefits are greater than social benefits.
  c.

internal benefits are less than external benefits.
  d.

external benefits are greater than social benefits.
  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.
  b.

It is an illegal market that emerges when only binding price ceilings and binding price floors are in place.
  c.

It is an illegal market that emerges when no price controls are present.
  d.

It is an illegal market that emerges when binding and nonbinding price controls are in
place.
  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.
  b.

public-good costs.
  c.

third-party costs.
  d.

internal costs.
  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
  b.

above; shortage; downward
  c.

above; surplus; upward
  d.

above; surplus; downward
  e.

below; surplus; upward

 

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019
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Related questions

2a)

A market in which there are neither external benefits nor external costs is:

Select one:

a. efficient.

b. inefficient.

c. efficient and equitable.

d. impossible.

2b)

According to the special-interest theory of government, government officials and policymakers:

Select one:

a. are assumed to maximize social good.

b. tend to listen to small groups of people who contribute money to their political campaigns.

c. manage resources to maximize efficiency.

d. have a strong incentive to ensure that society's members equally benefit from a project.

2c)

Scientific research is subsidized by the government because

Select one:

a. it yields benefits to consumers and producers who did not participate in the research.

b. researchers are under-paid by private firms, so the government must make up the difference.

c. much scientific research takes place at state-funded universities.

d. scientific research has no market value so would not be undertaken without government intervention.

2d)

The forces of supply and demand will provide a quantity that is

Select one:

a. less than the efficient quantity if a good generates external benefits.

b. more than the efficient quantity if a good generates external benefits.

c. exactly the efficient quantity if a good generates external benefits.

d. either more than or less than the efficient quantity if a good generates external benefits. It is impossible to know whether it will be too much or too little without more information.

Which of the following best describes the kinds of decisions that result from using cost-benefit analysis?
A. An outcome with benefits that are greater than the costs.
B. An outcome that is rational if only monetary costs and benefits are included.
C. A maximum amount of profit for both producers and consumers.
D. A high sale price for producers and low buying price for consumers.

QUESTION 38

You are the president of the United States. In an attempt to make gasoline prices cheaper, you have imposed a binding price ceiling on gas. What would you expect your critics to say?

  a.

The binding price ceiling will cause firms to minimize their spending on the research and development of alternatives to gasoline.
  b.

The binding price ceiling will discourage individuals from using their personal automobile to commute to work or school.
  c.

The binding price ceiling will increase the likelihood that customers obtain needed
gasoline on the black market.
  d.

The binding price ceiling will encourage oil companies to deplete the resource too quickly.
  e.

The binding price ceiling will cause firms to produce only gasoline of the highest quality.

1.05000 points

QUESTION 39

If a firm's long-run average total costs increase as it increases its scale of production, the firm is experiencing:

  a.

increasing returns from specialization.
  b.

diseconomies of scale.
  c.

economies of scale.
  d.

constant returns to scale.
  e.

diminishing marginal product.

1.05000 points

QUESTION 40

A(n) __________ in the elasticity of supply or demand in a market for a good that is taxed would tend to __________ tax revenue from that tax.

  a.

increase; increase
  b.

increase; have no effect on
  c.

decrease; have no effect on
  d.

decrease; decrease
  e.

increase; decrease

1.05000 points

QUESTION 41

The costs of a market activity paid for by an individual engaged in the market activity are:

  a.

external costs.
  b.

social costs.
  c.

common costs.
  d.

free-rider costs.
  e.

internal costs.

1.05000 points

QUESTION 42

Assume that the price of rubber increased at the same time that Michael Jordan, arguably the best NBA basketball player of all time, became famous. What do you expect to happen to the equilibrium price and equilibrium quantity of the basketball shoes that are promoted by Michael Jordan?

  a.

Equilibrium price will go down and equilibrium quantity will be indeterminate.
  b.

Equilibrium price will go up and equilibrium quantity will go down.
  c.

Equilibrium price will go up and equilibrium quantity will be indeterminate.
  d.

Equilibrium price will go down and equilibrium quantity will go up.
  e.

Equilibrium price will go up and equilibrium quantity will go up.

1.05000 points

QUESTION 43

The minimum wage law is an example of a:

  a.

price floor.
  b.

law that sets the minimum number of hours that an employee must work for wages during the week.
  c.

law that allows individual employers and employees to make free decisions.
  d.

law that requires quantity demanded to equal quantity supplied.
  e.

price ceiling.

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