chapter 7 practice - REVIEW CH 7 Fall 14 Multiple Choice...

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REVIEW CH 7 Fall 14Multiple ChoiceIdentify the choice that best completes the statement or answers the question.Figure 10-2Private CostSocial CostDemand100200300400500600700800900Quantity0.511.522.533.544.555.566.577.588.5Price____1.Refer to Figure 10-2.Suppose that the production of plastic creates a social cost which is depicted in thegraph above. Without any government regulation, what price will the firm charge per unit of plastic?a.$3b.$3.50c.$5d.$8
____2.When a negative externality exists in a market, the cost to producers
____3.When a market experiences a positive externality,
____4.Flu shots provide a positive externality. Suppose that the market for vaccinations is perfectly competitive.Without government intervention in the vaccination market, which of the following statements is correct?
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Chapter 10 / Exercise 4
Principles of Microeconomics
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c.A per-shot subsidy could turn an inefficient situation into an efficient one.d.All of the above are correct.____5.Technology spillover is one type ofa.negative externality.b.positive externality.c.subsidy.d.producer surplus.
____6.Which of the following best defines the situation where one firm's research yields knowledge that is used bysociety as a whole?
____7.In the case of a technology spillover, the government can encourage firms to internalize a positive externalityby
____8.Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by thestudent in the form of higher wages. If the government offers subsidies for MBAs, then which of thefollowing statements is correct?

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Term
Fall
Professor
Spiegelman
Tags
Government, Market failure, Externality, Applicative
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Principles of Microeconomics
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 4
Principles of Microeconomics
Mankiw
Expert Verified

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