3.1 Key

3.1 Key - Problem Set 3.1 Answer Key 1. The idea that the...

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Problem Set 3.1 Answer Key 1. The idea that the problem of externality can be solved by bargaining is attributable to a. Ronald Coase b. Alfred Marshall c. A. C. Pigou d. Jules Dupuit e. Arthur Laffer 2. Ronald Coase’s approach to externalities places primary emphasis upon a. victims and culprits b. technology c. divergence between private and social cost d. transactions costs and property rights e. liability rules and injunctions 3. The notion of taxing goods with negative externalities is attributable to a. Ronald Coase b. Alfred Marshall c. A. C. Pigou d. Jules Dupuit e. Arthur Laffer 4. In its extreme form, the Coase theorem reduces to the following statement: a. externalities must be taxed b. externalities must be externalities c. externalities do not matter d. property does not matter e. property rights do not matter. 5. If a product has an external benefit associated with it, then a. government should tax its production. b. the output level is too high. c. government should take steps to shift its demand to the left. d. the demand curve for the product underestimates the marginal benefits to the society. e. the supply curve for the product underestimates the marginal benefits to the society. 6. Because of the presence of a negative externality in an otherwise free market environment is: a. An efficient allocation of resources b. Production of more than the socially efficient quantity of the good c. Production of less than the socially efficient quantity of the good d. Establishment of a market price that is greater than the socially efficient price e. None of the above 7. The best modern example of an effective Pigouvian tax was a tax levied on:
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This note was uploaded on 05/09/2008 for the course ECN 212 taught by Professor Nancy during the Fall '07 term at ASU.

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3.1 Key - Problem Set 3.1 Answer Key 1. The idea that the...

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