经济学原理对应练习 (2)

Chapter 10 Externalities

Multiple Choice

1. In a market economy, government intervention a. will always improve market outcomes.

b. reduces efficiency in the presence of externalities.

c. may improve market outcomes in the presence of externalities. d. is necessary to control individual greed. ANS: C PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Applicative

2. In the absence of externalities, the \

a. producer profit from that market.

b. total benefit to society from that market. c. both equity and efficiency in that market. d. output of goods or services in that market. ANS: B PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Applicative

3. One advantage market economies have over other types of economies is that market economies

a. provide an equal distribution of goods and services to consumers. b. establish government economic control. c. solve the problem of scarcity. d. are more efficient. ANS: D PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Applicative

4. The term market failure refers to

a. a market that fails to allocate resources efficiently.

b. an unsuccessful advertising campaign which reduces demand. c. ruthless competition among firms.

d. a firm that is forced out of business because of losses. ANS: A PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Definitional

5. Market failure can be caused by

a. too much competition. b. externalities.

c. low consumer demand. d. scarcity. ANS: B PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Interpretive

6. An externality is the impact of

a. society's decisions on the well-being of society. b. a person's actions on that person's well-being.

c. one person's actions on the well-being of a bystander. d. society's decisions on the poorest person in the society. ANS: C PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Definitional

7. The impact of one person's actions on the well-being of a bystander is called

a. an economic dilemma. b. deadweight loss.

c. a multi-party problem. d. an externality. ANS: D PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Applicative

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8. An externality

a. is a type of market failure.

b. causes markets to allocate resources efficiently.

c. strengthens the role of the “invisible hand” in the marketplace. d. affects producers but not consumers. ANS: A PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Interpretive

9. Dog owners do not bear the full cost of the noise their barking dogs create and often take too few precautions to

prevent their dogs from barking. Local governments address this problem by a. making it illegal to \

b. having a well-funded animal control department. c. subsidizing local animal shelters. d. encouraging people to adopt cats. ANS: A PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Applicative 10. An externality is

a. the costs that parties incur in the process of agreeing and following through on a bargain. b. the uncompensated impact of one person's actions on the well-being of a bystander.

c. the proposition that private parties can bargain without cost over the allocation of resources. d. a market equilibrium tax. ANS: B PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Definitional 11. An externality is an example of

a. a corrective tax.

b. a tradable pollution permit. c. a market failure.

d. Both a and b are correct. ANS: C PTS: 1 DIF: 1 REF: 10-0 TOP: Externalities MSC: Applicative

12. An externality exists whenever

a. the economy can benefit from government intervention. b. markets are not able to reach equilibrium. c. a firm sells its product in a foreign market.

d. a person engages in an activity that influences the well-being of a bystander and yet neither pays nor receives

payment for that effect.

ANS: D PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Definitional 13. When externalities are present in a market, the well-being of market participants

a. and market bystanders are both directly affected. b. and market bystanders are both indirectly affected.

c. is directly affected, and market bystanders are indirectly affected. d. is indirectly affected, and market bystanders are directly affected. ANS: C PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Analytical

14. Which of the following statements about a well-maintained yard best conveys the general nature of the externality?

a. A well-maintained yard conveys a positive externality because it increases the home's market value.

b. A well-maintained yard conveys a negative externality because it increases the property tax liability of the owner. c. A well-maintained yard conveys a positive externality because it increases the value of adjacent properties in the

neighborhood.

d. A well-maintained yard cannot provide any type of externality. ANS: C PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative

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15. Since restored historic buildings convey a positive externality, local governments may choose to

a. regulation the demolition of them.

b. provide tax breaks to owners who restore them. c. increase property taxes in historic areas. d. Both a and b are correct. ANS: D PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative 16. Externalities

a. cause markets to fail to allocate resources efficiently. b. cause equilibrium prices to be too high.

c. benefit producers at the expense of consumers. d. cause equilibrium prices to be too low. ANS: A PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative

17. When externalities exist, buyers and sellers

a. neglect the external effects of their actions, but the market equilibrium is still efficient. b. do not neglect the external effects of their actions, and the market equilibrium is efficient. c. neglect the external effects of their actions, and the market equilibrium is not efficient.

d. do not neglect the external effects of their actions, and the market equilibrium is not efficient. ANS: C PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative

18. Dioxin emission that results from the production of paper is a good example of a negative externality because

a. self-interested paper firms are generally unaware of environmental regulations. b. there are fines for producing too much dioxin.

c. self-interested paper producers will not consider the full cost of the dioxin pollution they create. d. toxic emissions are the best example of an externality. ANS: C PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative 19. If a paper manufacturer does not bear the entire cost of the dioxin it emits, it will

a. emit a lower level of dioxin than is socially efficient. b. emit a higher level of dioxin than is socially efficient. c. emit an acceptable level of dioxin.

d. not emit any dioxin in an attempt to avoid paying the entire cost. ANS: B PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative

20. One of the Ten Principles of Economics is that \

statement does not imply which of the following? a. Some markets produce negative externalities.

b. The invisible hand of the marketplace does not always lead buyers and sellers to maximize total benefit to

society.

c. Some markets are characterized by market failure.

d. Other types of economies are more efficient than market economies. ANS: D PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Interpretive 21. Which of the following is an example of an externality?

a. cigarette smoke that permeates an entire restaurant

b. a flu shot that prevents a student from transmitting the virus to her roommate c. a beautiful flower garden outside of the local post office d. All of the above are correct. ANS: D PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative

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22. Which of the following statements is not correct?

a. Government policies may improve the market's allocation of resources when negative externalities are present. b. Government policies may improve the market's allocation of resources when positive externalities are present. c. A positive externality is an example of a market failure.

d. Without government intervention, the market will tend to undersupply products that produce negative

externalities.

ANS: D PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Interpretive 23. Which of the following represents a way that a government can help the private market to internalize an externality?

a. taxing goods that have negative externalities b. subsidizing goods that have positive externalities

c. The government cannot improve upon the outcomes of private markets. d. Both a and b are correct. ANS: D PTS: 1 DIF: 2 REF: 10-0 TOP: Externalities MSC: Applicative 24. When externalities are present in a market,

a. the market equilibrium maximizes the total benefit to society as a whole. b. participants lose some market benefits to bystanders. c. firms produce too much output.

d. the market fails to allocate resources efficiently. ANS: D PTS: 1 DIF: 2 REF: 10-0 | 10-1 TOP: Externalities MSC: Applicative 25. If an externality is present in a market, economic efficiency may be enhanced by

a. increased competition. b. weakening property rights.

c. better informed market participants. d. government intervention. ANS: D PTS: 1 DIF: 1 REF: 10-1 TOP: Externalities MSC: Applicative

26. If a sawmill creates too much noise for local residents,

a. noise restrictions will force residents to move out of the area.

b. a sense of social responsibility will cause owners of the mill to reduce noise levels. c. the government can raise economic well-being through noise-control regulations.

d. the government should avoid intervening because the market will allocate resources efficiently. ANS: C PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative 27. Private markets fail to account for externalities because

a. externalities don't occur in private markets.

b. sellers include costs associated with externalities in the price of their product.

c. decisionmakers in the market fail to include the costs of their behavior to third parties. d. the government cannot easily estimate the optimal quantity of pollution. ANS: C PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative 28. When the government intervenes in markets with externalities, it does so in order to

a. increase production when negative externalities are present. b. protect the interests of bystanders.

c. make certain all benefits are received by market participants. d. reduce production when positive externalities are present. ANS: B PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative

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29. Research into new technologies

a. provides positive externalities because it creates knowledge others can use.

b. results in negative externalities because government funding for research causes less government spending in

other areas.

c. is protected by patent laws, which eliminates the need for government intervention.

d. should only be funded by the corporations that will receive the profits from the research. ANS: A PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative 30. At any given quantity, the willingness to pay in the market for gasoline is reflected in the

a. height of the demand curve at that quantity. b. height of the supply curve at that quantity.

c. value to the producer of the last unit of gasoline sold. d. total quantity of gasoline exchanged in the market. ANS: A PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative 31. The supply curve for a product reflects the

a. willingness to pay of the marginal buyer.

b. quantity buyers will ultimately purchase of the product. c. cost to sellers of producing the product. d. seller's profit from producing the product. ANS: C PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative

32. Without government intervention, the market equilibrium for oranges will

a. maximize the sum of producer and consumer surplus in the market. b. be both efficient and equitable. c. be equitable but not efficient. d. be neither efficient nor equitable. ANS: A PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative

33. Since air pollution creates a negative externality,

a. social welfare will be enhanced when some, but not all air pollution is eliminated. b. social welfare is optimal when all air pollution is eliminated.

c. governments should encourage private firms to consider only private costs. d. the free market result maximizes social welfare. ANS: A PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative 34. The difference between social cost and private cost is a measure of the

a. loss in profit to the seller as the result of a negative externality. b. cost of an externality.

c. cost reduction when the negative externality is eliminated.

d. cost incurred by the government when it intervenes in the market. ANS: B PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative

35. Which of the following statements is correct?

a. Government should tax goods with either positive or negative externalities.

b. Government should tax goods with negative externalities and subsidize goods with positive externalities. c. Government should subsidize goods with either positive or negative externalities.

d. Government should tax goods with positive externalities and subsidize goods with negative externalities. ANS: B PTS: 1 DIF: 2 REF: 10-1 TOP: Externalities MSC: Applicative