10 - Sample Questions: Chapter 10 Short Questions Try...

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Sample Questions: Chapter 10 Short Questions Try textbook questions 3, 4, 8 and 9 Multiple Choice Questions 1. All of the following are examples of externalities except : A) carbon dioxide from energy generation that adds to the worldwide, long-term greenhouse effect. B) heat from a factory that makes the neighbouring tomato patches more productive. C) a defective part that causes an automobile to break down three months after purchase. D) acidic smoke that produces acid rain. E) a chemical plant that pollutes the air in your community. 2. If a positive externality exists in the provision of a good that is provided in a perfectly competitive market without government intervention, then at the market equilibrium level of output: A) additional net gains to society are possible by reducing output. B) additional net gains to society are possible by raising output. C) the marginal social benefit equals the marginal social cost. D)
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10 - Sample Questions: Chapter 10 Short Questions Try...

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