Homework #12 – Flashcards
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Which of the following is not characteristic of the socially efficient outcome?
A. All participants make decisions that are the best for themselves
B. The price freely adjusts so that the market clears
C. The cost to society of producing the good is different from the value of the good perceived by the consumers
D. There is no excess and no shortage
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C. The cost to society of producing the good is different from the value of the good perceived by the consumers
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If the social cost of producing chickens is greater than the private cost, then:
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A negative externality exists
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Pollution is an example of market failure because:
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The equilibrium price is less than the efficient price
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In order for someone to be a free rider, an activity must be undertaken that:
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Creates benefits for people who can't be forced to pay for them.
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The social cost curve lies above the supply (private cost) curve for the producer in cases of:
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Negative Externalities
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If a per unit tax is imposed on a producer of a good with a negative externality, then the tax shifts the market's:
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Supply Curve to the left
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Which of the following is true about Public Goods?
A. Consumption by one person does not diminish the amount that others can consumer
B. Public goods are often oversupplied
C. Governments generally need to provide public goods or they will be undersupplied
D. Both (a) and (c)
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D. Both (a) and (c)
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A rival good is a good:
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Where the use by one person limits the use of the good by other people
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Public Goods are classified as:
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Non-excludable and non-rivalrous
