Kristen Moore
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Business/Economics Quiz on Chapter 10 - Examining Externalities, created by Kristen Moore on 06/04/2017.

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Kristen Moore
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Chapter 10 - Examining Externalities

Chapter 10 - Examining Externalities

Question 1 of 11

1

Externalities *

Select one of the following:

  • can be either benefits or costs.

  • always create extra social costs.

  • always make society better off.

  • cannot be expressed in dollar amounts.

  • are always part of private costs or private benefits.

Explanation

Question 2 of 11

1

For a product with an external cost, the supply curve *

Select one of the following:

  • represents the various quantities people can buy.

  • is the same as the marginal private cost curve.

  • is the same as the marginal social cost curve.

  • is the same as the marginal external cost curve.

  • is undefined.

Explanation

Question 3 of 11

1

For a firm, its labor costs are *

Select one of the following:

  • a marginal benefit.

  • a private cost.

  • an external cost.

  • Both answers A and C are correct.

  • Both answers A and B are correct.

Explanation

Question 4 of 11

1

A marginal external cost of a product is equal to

Select one of the following:

  • what the producer has to pay to hire resources to produce another unit.

  • the cost someone other than the producer incurs when another unit is produced.

  • the cost the producer incurs to produce another unit.

  • what the consumer must pay when he or she buys the good or service.

  • None of these answers describes a marginal external cost.

Explanation

Question 5 of 11

1

Which of the following equations is correct?

Select one of the following:

  • MC = MSC + marginal external cost

  • MSC = MC ÷ marginal external cost

  • MSC = MC + marginal external cost

  • MSC = MC × marginal external cost

  • MC = marginal external cost - MSC

Explanation

Question 6 of 11

1

If the marginal social cost of generating a kilowatt of electricity is $0.10 and the marginal private cost is $0.08, what is the marginal external cost?

Select one of the following:

  • $0.18

  • $0.10

  • $0.08

  • $0.02

  • $0.80

Explanation

Question 7 of 11

1

When a person receives a flu vaccination, the ________ is the additional benefit the person receives from getting the shot.

Select one of the following:

  • marginal private benefit

  • marginal external benefit

  • marginal social benefit

  • marginal social cost

  • marginal external cost

Explanation

Question 8 of 11

1

If the marginal private benefit of attending college for Shelly is $40,000 and the marginal external benefit is $15,000, she will attend college if the cost of attendance is no more than

Select one of the following:

  • $55,000.

  • $45,000

  • $40,000

  • $25,000

  • $15,000

Explanation

Question 9 of 11

1

If a government action is designed to achieve efficiency, then the action must have the market produce the amount of output so that the

Select one of the following:

  • marginal private cost equals the marginal private benefit.

  • marginal social cost equals the marginal social benefit.

  • marginal external cost equals the marginal external benefit.

  • marginal private cost equals the tax.

  • marginal social benefit exceeds the marginal social cost by as much as possible.

Explanation

Question 10 of 11

1

If all education in the United States were provided by private, tuition-charging schools,

Select one of the following:

  • too much education would be consumed.

  • too little education would be consumed.

  • the efficient level of education would be provided.

  • the government would provide both students and schools with vouchers.

  • education would no longer have an external benefit.

Explanation

Question 11 of 11

1

A good or service with a positive externality is one which (Choose 2)

Select one or more of the following:

  • everyone wants to have access to.

  • is produced in the social interest.

  • the marginal social benefit exceeds the marginal private benefit.

  • there will be overproduction of the good.

  • there will be underproduction of the good.

Explanation

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