Micro Flip Quiz Ch 10 - 11

If the government removes a tax on a good, then the price paid by buyers will a. decrease, and the price received by sellers will increase. b. increase, and the price received by sellers will decrease. c. increase, and the price received by sellers will increase. d. decrease, and the price received by sellers will decrease.

A

This graph shows the market for pollution when permits are issued to firms and traded in the marketplace. The equilibrium NUMBER of permits is a. 1,000 b. 100 c. 2,000 d. 50

A

When a tax is levied on a good, the buyers and sellers of the good share the burden, a. regardless of how the tax is levied. b. provided the tax is levied on the buyers. c. provided a portion of the tax is levied on the buyers, with the remaining portion levied on the sellers. d. provided the tax is levied on the sellers.

A

A free rider is a person who a. rides public transit regularly. b. receives the benefit of a good but avoids paying for it. c. can produce a good at no cost. d. will only purchase a product on sale.

B

The demand for a good or service is determined by a. those who sell the good or service. b. those who buy the good or service. c. both those who buy and those who sell the good or service. d. the government.

B

When a good is excludable, a. one person's use of the good diminishes another person's ability to use it. b. people can be prevented from using the good. c. everyone will be excluded from using the good. d. no more than one person can use the good at the same time.

B

A legal maximum on the price at which a good can be sold is called a price a. subsidy. b. floor. c. ceiling. d. support.

C

Goods that are rival in consumption include both a. club goods and public goods. b. public goods and common resources. c. common resources and private goods. d. private goods and club goods.

C

The movement from point A to point B on the graph shows a. a decrease in demand. b. a decrease in quantity demanded. c. an increase in quantity demanded. d. an increase in demand.

C

Which of the following is an example of a positive externality? a. air pollution b. a person littering in a public park c. a nice garden in front of your neighbor's house d. the pollution of a stream

C

Which price and quantity combination represents the social optimum? a. P0 and Q1. b. P2 and Q0. c. P2 and Q1. d. P1 and Q0.

C

Without government intervention, public goods tend to be a. overproduced and common resources tend to be underconsumed. b. underproduced and common resources tend to be underconsumed. c. underproduced and common resources tend to be overconsumed. d. overproduced and common resources tend to be overconsumed.

C

Most economists prefer corrective taxes to regulation to correct the pollution problem because: a. the market-based solution is less costly to society. b. the market-based solution can result in a greater reduction in pollution. c. the market-based solution raises revenue for the government. d. all of the above.

D

Negative externalities occur when one person's actions a. cause his or her employer to lose business. b. adversely affect the well-being of a bystander who is not a party to the action. c. cause another person to lose money in a stock market transaction. d. reveal his or her preference for foreign-produced goods.

D

The Tragedy of the Commons occurs because a. a common resource is underutilized. b. crimes are committed in public places. c. common resources are subject to exclusionary rules. d. a common resource is rival in consumption.

D

The deadweight loss from a tax of $5 per unit will be smallest in a market with a. elastic supply and inelastic demand. b. elastic supply and elastic demand. c. inelastic supply and elastic demand. d. inelastic supply and inelastic demand.

D

This graph shows the market for pollution when permits are issued to firms and traded in the marketplace. In the absence of a pollution permit system, the quantity of pollution would be a. 50 b. 75 c. 25 d. 100

D

Which of the following is not a common resource? a. wild gorillas b. congested roads c. clean water d. a fireworks display

D

This graph shows the market for pollution when permits are issued to firms and traded in the marketplace. The equilibrium PRICE of pollution is a. $2,000 b. $50 c. $1,000 d. $500

c