Module 4-Exam-MicroV1

_____________ has occurred if a government-owned firm becomes privately owned. Privatization Nationalization Deregulation Regulatory capture

Privatization

Which of the following would most likely be identified as being the ultimate goal of public policies that pertain to technology? to help inventors earn higher rates of return to help inventors earn reasonable returns to encourage a stream of inventions that monetarily benefit the inventor. to encourage a stream of invention that benefits the whole of society.

to encourage a stream of invention that benefits the whole of society.

____________________ describes a situation where a third party, outside the transaction, suffers from a market transaction by others. Negative externality Positive externality A spillover A market failure

Negative externality

Which of the following has the power to allow a merger, prohibit it, or allow it if certain conditions are met? antitrust regulators at the FTC State Department Congress and/or Senate Supreme Court

antitrust regulators at the FTC

The problem of pollution arises in primarily ______________ economies around the world. command-oriented market-oriented middle income both a and b

both a and b

Which of the following will need to strike some balance between economic output and environmental quality as a prominent climate change priority? countries with high-incomes every country market-oriented countries command-oriented countries

every country

For a positive externality, _________________________than the social benefits. private benefits of an action are more social benefits of an action are more private benefits of an action are less social costs of an action are less

private benefits of an action are less

If the largest four firms in an industry control less than half the market, their competitive concentration ratio would be considered to be especially high. would not be considered particularly high would not be considered particularly low. would be considered to be especially low.

would not be considered particularly high

The refundable charge of 5 or 10 cents for returning recyclable cans and bottles works like an incentive to throw bottles and cans in the trash. command-and-control regulation. a market permit program. a pollution tax incentive to avoid littering.

a pollution tax incentive to avoid littering.

Firms operating under cost-plus regulation have an incentive to generate high costs by building huge factories or employing lots of staff, because doing so creates efficiencies and innovation. because the market changes dramatically and they have incentive to meet new demand. because this will reduce the firm's costs more quickly and it can make a high level of profit. because what they can charge is linked to the costs they incur.

because what they can charge is linked to the costs they incur.

Antitrust laws were created to give government the power to block certain mergers and break up large firms into smaller ones. block cartels, and break up regulatory capture. force the firm to sell off the profitable parts of its operation. block certain mergers that are determined to be uncompetitive.

block certain mergers and break up large firms into smaller ones.

Because attempting to define a particular market can be difficult and controversial the Federal Trade Commission has begun to look less at market share and more at the data on actual ______________________________. competition in the overall economy selective anti-competitive industry practices competition between businesses market definition

competition between businesses

If I'MSmartCo's research and development project succeeds, then market competition will ultimately discourage commercialization of the new technology. competitors may find a way to adapt and copy the underlying idea without incurring R&D costs. their success will be temporary because they will inevitably fall behind other innovative competitors. they will need to find a less expensive way to add even more desirable characteristics.

competitors may find a way to adapt and copy the underlying idea without incurring R&D costs.

Which of the following circumstances would encourage I'MaPharmaCo. to increase research and development activities? cost of financial capital is high patent term expires in 20 years cost of financial capital is low a low rate of return is likely

cost of financial capital is low

If a glass manufacturer has only a few ________________ of reducing pollutants, it will ____________________ . costly ways; end up paying the pollution tax. inexpensive ways; incur the pollution tax instead. costly ways; do so to minimize its pollution taxes. inexpensive ways; buy the most expensive technology.

costly ways; end up paying the pollution tax.

In addition to the current levels of air and water pollution, a list of important environmental issues would most likely include: emissions of greenhouse gases safe disposal of hazardous waste materials destruction of wetlands and other habitats extinction of species and all of the above

extinction of species and all of the above

Which of the following is the most appropriate response of public policy to a negative externality like pollution? modernize, update, and restore homes in run down neighborhoods to decrease littering find ways to account for the social costs of the negative externality in economic decisions encourage high standards of public education to increase innovation capability of youth assist the private party creating the negative externality to receive more social benefits

find ways to account for the social costs of the negative externality in economic decisions

An individual who wants others to pay for public goods, but plans to use those goods for their own purposes, is often referred to as a ______________ . tax evader excludable free rider nonexcludable

free rider

Why would a typical U.S. business fail to take the social costs of pollution into consideration during the development of their operating strategies? the range of flexible, market-oriented pollution control policies are flawed government regulated the limits for how much pollutant can be emitted it isn't required to pay any of the cost of cleaning up its pollution it is following the principle of voluntary exchange of benefits

it isn't required to pay any of the cost of cleaning up its pollution

When it is costly or impossible to exclude someone who hasn't paid to use a particular good from using it, then that good is classified as being unexcludable free rider public good nonexcludable

nonexcludable

A public good is a good that is ____________________ , and thus is difficult for market producers to sell to individual consumers. excludable or rivalrous nonexcludable and nonrivalrous excludable and rivalrous unexcludable or unrivaled

nonexcludable and nonrivalrous

In order for a good to be classified as ______________ , when one person uses the good, others are also able to use it. nonrivalrous unrivalrous unexcludable nonexcludable

nonrivalrous

Some studies done by economists have found that the original inventor receives _________________________________________________ from innovations, while other businesses and new product users receive the rest of the benefit. one-quarter to one-half of the social and economic benefits one-quarter to one-third of social and economic benefits one-third to one-half of the total economic benefits one-quarter to one-third of the total economic benefits

one-third to one-half of the total economic benefits

In economic terms, when I'mASoftwareCo. invests in new technology innovations, competitive externalities arise. potential externalities arise. negative externalities arise. positive externalities arise.

positive externalities arise

The objective of imposing a higher pollution tax is to ensure firms have pollution charge credits for all reduced emissions. provide incentive for firms to maintain regulation emission levels. provide adequate incentive for firms to reduce their emissions by more. ensure firms must pay the pollution charge for all reduced emissions.

provide adequate incentive for firms to reduce their emissions by more.

Which of the following is an example of economic output that can injure the environment? gold mine discharging arsenic into a natural lake it's using for a tailings pond paper mill discharging raw chemical waste into a river excessive clear cutting of wood resources by logging companies radio-active waste leaking into a river, and all of the above

radio-active waste leaking into a river, and all of the above

The term ______________ refers to a situation where the firms supposedly being regulated end up playing a large role in setting the regulations that they will follow. regulatory tie-in deregulation privatization regulatory capture

regulatory capture

Practices that reduce competition without actual documented agreements between firms to raise price are commonly referred to as ______________________ . legal practices competitive practices regulated practices restrictive practices

restrictive practices

A highly innovative firm operating in a competitive market will usually have a permanent edge over its competitors. a lack of ability to earn reasonable profits. vast numbers of competitors catching up to its innovations. some time before competitors catch up to its innovations.

some time before competitors catch up to its innovations.

Which of the following has become the least willing to sacrifice their environmental quality for some additional economic output? the European Union China Ohio command economies

the European Union

A beekeeper decides to locate her business on a plot of land that is between an apple orchard and an elementary school. A positive externality that can result is the cost of the bee hives to the beekeeper. the possibility of the bees stinging the students at the school. the bees helping to pollinate the orchard, leading to more fruit. the honey the bees produce.

the bees helping to pollinate the orchard, leading to more fruit.

Which of the following would most likely be recognized as a defining characteristic of a public good? the good is nonrivalrous item the good is nonexcludable item the good is both a and b above the good is a separate and identifiable item

the good is both a and b above

A beekeeper decides to locate her business on a plot of land that is between an apple orchard and an elementary school. A negative externality that can result is the cost of the bee hives to the beekeeper. the possibility of the bees stinging the students at the school. the bees helping to pollinate the orchard, leading to more fruit. the honey the bees produce.

the possibility of the bees stinging the students at the school.