econ - problem set 5_ProblemSet

# econ - problem set 5_ProblemSet - Review Assessment:...

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Review Assessment: Problem Set 5 Name: Problem Set 5 Status: Completed Score: 80 out of 100 point(s) Instructions: Question 1 Multiple Choice 5 of 5 point(s) This figure reflects the market for outdoor concerts in a public park surrounded by residential neighborhoods. Figure 10-2 Refer to Figure 10-2. The social cost curve is above the supply curve because Your Answer: it takes into account the external costs imposed on society by the concert organizers. Correct Answer: it takes into account the external costs imposed on society by the concert organizers. Feedback: it takes into account the external costs imposed on society by the concert organizers. Question 2 Multiple Choice 5 of 5 point(s) Dick owns a dog whose barking annoys Dick's neighbor Jane. Suppose that the benefit of owning the dog is worth \$500 to Dick and that Jane bears a cost of \$700 from the barking. Assuming Dick has the legal right to keep the dog, a possible private solution to this problem is that Your Answer: Jane pays Dick \$650 to get rid of the dog. Correct Answer: Jane pays Dick \$650 to get rid of the dog.

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Feedback: Jane pays Dick \$650 to get rid of the dog. Question 3 Multiple Choice 0 of 5 point(s) Two types of private solutions to the problem of externalities are Your Answer: taxes and subsidies. Correct Answer: charities and the Golden Rule. Feedback: charities and the Golden Rule. Question 4 Multiple Choice 5 of 5 point(s) Which of the following statements about internalizing a negative externality is most correct? Your Answer: Internalizing a negative externality will cause an industry to decrease the quantity it supplies to the market and increase the price of the good produced. Correct Answer: Internalizing a negative externality will cause an industry to decrease the quantity it supplies to the market and increase the price of the good produced. Feedback: Internalizing a negative externality will cause an industry to decrease the quantity it supplies to the market and increase the price of the good produced. Question 5 Multiple Choice 5 of 5 point(s) Regulations to reduce pollution Your Answer: cause each factory to reduce pollution to the same maximum level. Correct Answer: cause each factory to reduce pollution to the same maximum level. Feedback: cause each factory to reduce pollution to the same maximum level. Question 6 Multiple Choice 5 of 5 point(s)
Figure 10-5 Refer to Figure 10-5. Which price and quantity combination represents the social optimum? Your Answer: P 2 and Q 1 . Correct Answer: P 2 and Q 1 . Feedback: P 2 and Q 1 . Question 7 Multiple Choice 5 of 5 point(s) A Pigovian tax Your Answer: places a price on the right to pollute. Correct Answer: places a price on the right to pollute. Feedback:

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## This note was uploaded on 06/13/2011 for the course ECON 2252 taught by Professor Byrd during the Spring '11 term at Troy.

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econ - problem set 5_ProblemSet - Review Assessment:...

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