Micro-Economics Ch 17-18 Questions

Micro-Economics Ch 17-18 Questions - Name Date CHAPTER 17 1...

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Page 1 Name: __________________________ Date: _____________ CHAPTER 17: 1. A market economy, without any government regulation, will produce: A) too little pollution. B) too much pollution. C) the socially optimal quantity of pollution. D) the amount of pollution that maximizes total surplus. 2. Activities that generate external costs will likely be carried out at levels that ________ those that would be efficient. 3. Suppose the production of DVDs generates sulfur dioxide, an air pollutant. Then the equilibrium market quantity of DVDs produced and consumed: 4. Suppose the production of DVDs generates sulfur dioxide, an air pollutant. Then the market price for DVDs: 5. An externality is said to exist when: A) individuals impose costs or benefits on others but have no incentive to take these costs and benefits into account. B) individuals impose costs or benefits on others, and the market provides incentives to take these costs and benefits into account. C) individual actions are affected by external forces; for example, the loss of U.S. jobs due to competition from abroad is an externality. D) individual actions are affected by government policies (such as taxes) that are externally imposed on the market.
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