8456895
Description
Quiz by Kristen Moore, updated more than 1 year ago
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Created by Kristen Moore
about 7 years ago
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Question 1
Question
Externalities *
Answer
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can be either benefits or costs.
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always create extra social costs.
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always make society better off.
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cannot be expressed in dollar amounts.
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are always part of private costs or private benefits.
Question 2
Question
For a product with an external cost, the supply curve *
Answer
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represents the various quantities people can buy.
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is the same as the marginal private cost curve.
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is the same as the marginal social cost curve.
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is the same as the marginal external cost curve.
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is undefined.
Question 3
Question
For a firm, its labor costs are *
Answer
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a marginal benefit.
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a private cost.
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an external cost.
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Both answers A and C are correct.
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Both answers A and B are correct.
Question 4
Question
A marginal external cost of a product is equal to
Answer
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what the producer has to pay to hire resources to produce another unit.
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the cost someone other than the producer incurs when another unit is produced.
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the cost the producer incurs to produce another unit.
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what the consumer must pay when he or she buys the good or service.
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None of these answers describes a marginal external cost.
Question 5
Question
Which of the following equations is correct?
Answer
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MC = MSC + marginal external cost
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MSC = MC ÷ marginal external cost
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MSC = MC + marginal external cost
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MSC = MC × marginal external cost
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MC = marginal external cost - MSC
Question 6
Question
If the marginal social cost of generating a kilowatt of electricity is $0.10 and the marginal private cost is $0.08, what is the marginal external cost?
Answer
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$0.18
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$0.10
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$0.08
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$0.02
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$0.80
Question 7
Question
When a person receives a flu vaccination, the ________ is the additional benefit the person receives from getting the shot.
Answer
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marginal private benefit
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marginal external benefit
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marginal social benefit
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marginal social cost
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marginal external cost
Question 8
Question
If the marginal private benefit of attending college for Shelly is $40,000 and the marginal external benefit is $15,000, she will attend college if the cost of attendance is no more than
Answer
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$55,000.
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$45,000
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$40,000
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$25,000
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$15,000
Question 9
Question
If a government action is designed to achieve efficiency, then the action must have the market produce the amount of output so that the
Answer
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marginal private cost equals the marginal private benefit.
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marginal social cost equals the marginal social benefit.
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marginal external cost equals the marginal external benefit.
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marginal private cost equals the tax.
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marginal social benefit exceeds the marginal social cost by as much as possible.
Question 10
Question
If all education in the United States were provided by private, tuition-charging schools,
Answer
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too much education would be consumed.
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too little education would be consumed.
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the efficient level of education would be provided.
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the government would provide both students and schools with vouchers.
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education would no longer have an external benefit.
Question 11
Question
A good or service with a positive externality is one which (Choose 2)
Answer
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everyone wants to have access to.
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is produced in the social interest.
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the marginal social benefit exceeds the marginal private benefit.
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there will be overproduction of the good.
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there will be underproduction of the good.
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