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D. None of the above. 41 6. “The private optimum in the presence of a unilateral externality maximizes social
surplus but is not Pareto efficient”. True or false?
7. A “reciprocal externality”
A. is an externality that operates in only one direction.
B. is an externality associated with a repeated action (such as ongoing pollution).
C. is an externality whereby external agents are also source agents (as in traffic
D. None of the above.
8. “The equilibrium in the presence of a reciprocal externality does not maximize social
surplus and is not Pareto efficient”. True or false?
9. An unregulated fishery is an example of
A. a pure public good.
B. a congestible public good.
C. an open access resource.
D. a positive externality.
10. The “tragedy of the commons” refers to
A. the loss of social surplus associated with an externality.
B. the inefficient depletion of an open access resource.
C. the under-provision of public goods by the market.
D. an oper...
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- Spring '14