哈伯德英文版微观经济学练习c05

Microeconomics - Testbank 1 (Hubbard/O'Brien)
Chapter 5 Exernalities, Environmental Policy, and Public Goods
1) A n externality is:
A) a benefit realized by the purchaser of a good or service.
B) a cost paid for by the producer of a good or service.
C) a benefit or cost felt by someone who is not a producer or consumer of a good or service.
D) a nything that is external or not relevant to the production of a good or service.
2) I f your neighbor burns auto tires in the yard and you can smell them and cannot see sunlight
because of the black smoke, you are experiencing:
A) a positive externality.
B) a negative externality.
C) a private cost.
D) a private benefit.
3) Externalities:
A) s hould be banned.
B) s hould be subsidized.
C) c an either be positive or negative.
D) a re what the private consumer and producer in an exchange realize.
4) I f you buy a sweater to keep you warm in the winter, you are experiencing a:
A) p rivate benefit.
B) e xternal benefit.
C) s ocial cost because it cost you some money.
D) l oss of consumer surplus.
5) I f a negative exrternalitiy exists in reality, it will be experienced by:
A) s ome people not directly involved in the production or consumption of the good or
service.
B) t he producer of the good or service.
C) t he consumers of the good or service.
D) t he government.
6) A n example of a positive externality would be:
A) c leaning up the sidewalk on your block.
B) g raduating from college.
C) r epainting the house you live in.
D) a ll of the above.
7) W hich of the following is correct?
A) P rivate cost equals external cost.
B) P rivate benefit plus external benefit equals social benefit.
C) E xternal cost minus private cost equals social cost.
D) P rivate benefit equals external benefit minus social benefit.
8) W hy might even well-meaning producers in a market economy pollute?
A) T o avoid the external costs of production
B) B y polluting, supply is reduced and market price increases.
C) P olluting producers are being irrational.
D) T here is no good reason why some producers pollute.
9) I f there is pollution in producing a good and service, then:
A) e quilibrium price is too high and equilibrium quantity is too low.
B) e quilibrium price and equilibrium quantity are too low.
C) e quilibrium price and equilibrium quantity are too high.
D) e quilibrium price is too low and equilibrium quantity is too high.
10) B ecause producers do not bear the external cost of pollution:
A) t he economically efficient level of production is achieved.
B) p roduction is below the economically efficient level.
C) p roduction is beyond the economically efficient level.
D) t he market price is too high.
Refer to Figure 5.1 for the questions below.
Figure 5.1
11) F igure 5.1 shows:
A) a positive externality.
B) a negative externality.
C) c ommon property.
D) a public good.
12) I n figure 5.1 the firm wants to produce:
A) Q1.
B) Q2.
C) Q3.
D) Q4.
13) I n figure 5.1 the efficient output is:
A) Q1.
B) Q2.
C) Q3.
D) Q4.
14) W hen a competitive market equilibrium is economically efficient:
A) t here is a positive deadweight loss.
B) p roducer and consumer surplus are exactly equal in size.
C) t here are no positive and no negative external effects from consumption and production.
D) A ll of these must be correct.
15) W hich of the following is true when a negative external effect creates a deadweight loss?
A) T he marginal benefit to consumers is equal to the marginal cost to society of the last
units produced.
B) T he marginal benefit to consumers is above the marginal cost to society of the last units
produced.
C) T he marginal benefit to consumers is below the marginal cost to society of the last units
produced.
D) N one of these are true.
16) W hen there is a positive externality in a free market, there is:
A) t oo much of the good produced and consumed.
B) t oo little of the good produced and consumed.
C) t he right amount of the good produced and consumed.
D) a n economically efficient level of production and consumption.
17) W hen there is a positive externality, then:
A) t he marginal private benefit is less than the marginal social benefit at equilibrium.
B) t he marginal private benefit is greater than the marginal social benefit at equilibrium.
C) t he marginal private benefit is equal to the marginal social benefit at equilibrium.
D) t he marginal private costs are declining.
Refer to Figure 5.2 for the questions below.
Figure 5.2
18) I f figure 5.2, the firm wants to produce:
A) Q1.
B) Q2.
C) Q3.
D) Q4.
19) I f figure 5.2, the efficient output is:
A) Q1.
B) Q2.
C) Q3.
D) Q4.
20) I f figure 5.2, the dead weight loss due to the externality is:
A) F+J
B) H+L
C) T+U
D) A+B+C+E+F
21) T he level of pollution in reality should be:
A) r educed completely to zero because by definition, it is a negative external effect.
B) i gnored because it has always been present since the beginning of history.
C) r educed to the point where the marginal benefit is equal to the marginal cost to society.
D) l eft alone because the optimal level is controversial.
22) T he best level of pollution for society is:
A) z ero.
B) w here total benefit from reducing the pollution is the greatest.
C) w here marginal benefit from reducing the pollution is the greatest.
D) w here net benefit from reducing the pollution is the greatest.
23) T he Coase theorem is that:
A) g overnment intervention is always needed if externalities are present.
B) a ssigning property rights is the only thing the government should do in a market
economy.
C) i f transactions costs are low, private bargaining will result in an efficient solution to the
problem of externalities.
D) a free market equilibrium is always the best solution.
24) I f government decides to control pollution by placing a tax on the product that is associated
with the pollution, the size of the tax should be:
A) t hat will force the market price so high that no buyer can afford the product.
B) e qual to the social cost of the product.
C) e qual to the private cost of the product.
D) e qual to the external cost of the product.
25) G overnment can increase the consumption of a good or service that has positive externalities
by:
A) s ubsidizing the production of the good or service so that the supply is increased and
market price is reduced.
B) t axing the production and consumption of the good or service.
C) c onvincing everyone to consume the good.
D) b y assigning property rights.
26) W ho was the economist who first proposed that governments use taxes and subsidies to
correct for externalities?
A) R onald Coase
B) A. C. Pigou
C) A dam Smith
D) n one of these
27) T he imposition of a tax on the production of a polluting good or service that is equal to the
external costs will:
A) i ncrease the equilibrium market price.
B) d ecrease the equilibrium quantity produced and consumed.
C) d ecrease market supply of the product.
D) a ll of the above.
28) A good or service is considered to be excludable:
A) i f you can keep other people who did not pay for the item from enjoying its benefits.
B) i f you can't keep other people who did not pay for the item from enjoying its benefits.
C) w hen you consume a unit of the good, there is one less for everyone else.
D) w hen all people can be considered as an owner and no one is excluded from ownership.
29) A good or service is considered to be nonexcludable:
A) i f you can keep other people who did not pay for the item from enjoying its benefits.
B) i f you can't keep other people who did not pay for the item from enjoying its benefits.
C) w hen if you consume a unit, there is one less for everyone else.
D) w hen all people are considered owners.
30) W hen is a good or service considered to be rival in nature?
A) I f you can keep other people who did not pay for the item from enjoying its benefits.
B) I f you can't keep other people who did not pay for the item from enjoying its benefits.
C) W hen you consume one unit there is one less for everyone else.
D) A ll people are considered to be owners.
31) A good that is both rival and excludable is a:
A) p ublic good.
B) p rivate good.
C) n atural monopoly.
D) c ommon resource.
32) A good that is nonrivalrous and nonexcludable is a:
A) p ublic good.
B) p rivate good.
C) n atural monopoly.
D) c ommon resource.
33) A good that is rival and nonexcludable is a:
A) p ublic good.
B) p rivate good.
C) n atural monopoly.
D) c ommon resource.
34) A public good differs from a private good in that:
A) o nly the government can produce public goods.
B) i f a person does not pay for the good, they can be kept from enjoying the benefits of a
public good.
C) i f you consume a unit of a public good, there is one less for everyone.
D) n o one can be kept from enjoying the benefits of a public good and one person using it
does not reduce the amount available for everyone else.
35) I f someone enjoys the benefits from national defense but never pays any taxes to support it,
that person is known in economics as a:
A) t ax cheater.
B) f ree loader.
C) h omeless person.
D) f ree rider.
36) A n example of a good that has nonexclusive benefits would be:
A) c akes for sale at a bakery.
B) a light house.
C) h ouses.
D) t oothpicks.
37) A n example of a natural monopoly type of good would be:
A) c able television.
B) a pples.
C) a ir.
D) n one of these.
38) T he market demand for public goods can be determined by:
A) b y adding up how much each citizen is willing to buy at every possible price.
B) m ultiplying how much each citizen is willing to buy at every price.
C) a dding up how much each consumer will pay for each unit of the public good.
D) m ultiplying how much each consumer will pay for each unit of the public good.
39) F or profit producers will produce only private goods because:
A) t hey are small enough that everyone can afford them.
B) t he cost of production is easily found.
C) b uyers will be willing to pay for it because benefits are excludable.
D) t hey are greedy.
40) I n which of these situations is there no deadweight loss?
A) F ree market production of a private good with a negative externality
B) F ree market consumption of a private good with a positive externality
C) F ree market production and consumption of a private good without any externalities
D) C onsumption of a common resource without government restrictions
41) O veruse of a common resource may be avoided in modern times by:
A) g overnments taxing use of common resources.
B) g overnments issuing tradeable permits for use of common resources.
C) g overnments issuing quotas or legal limits for use of common resources.
D) a ll of the above.
42) I f you buy a product for your own use, it is a:
A) p rivate good.
B) p ublic good.
C) n atural monopoly.
D) c ommon resource.
43) T he social cost of cutting trees for firewood in a government forest are:
A) t he rising chance of flooding as more trees are cut.
B) t he rising chance of flooding as more trees are cut plus the private cost of the cutting.
C) o pportunity cost to the individual of cutting the wood.
D) t he marginal costs of cutting the last tree.。