Economics - Externality & Internality
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This is the MCQs of Economics
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Question 1 of 20
1. Question
An externality is:
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Question 2 of 20
2. Question
A negative externality generates:
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Question 3 of 20
3. Question
A positive externality generates:
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Question 4 of 20
4. Question
A negative externality (that has not been internalized) causes the
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Question 5 of 20
5. Question
A positive externality (that has not been internalized) caused the
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Question 6 of 20
6. Question
To internalize a negative externality an appropriate public policy response would be to
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Question 7 of 20
7. Question
The government engages in a technology policy
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Question 8 of 20
8. Question
When an individual buys a car in a congested urban area, it generates
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Question 9 of 20
9. Question
The most efficient pollution control system would ensure that
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Question 10 of 20
10. Question
According to the Coase theorem, private parties can solve the problem of externalities if:
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Question 11 of 20
11. Question
To internalize a positive externality an appropriate public policy response would be to:
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Question 12 of 20
12. Question
Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality?
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Question 13 of 20
13. Question
Roberto and Thomas live in a university hall of residence Roberto values playing loud music at a value of €100. Thomas values pease and quiet at a value of €150. Which of the following statements is true?
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Question 14 of 20
14. Question
Roberto and Thomas live in a university hall of residence. Reberto values playing loud music at a value of €100. Thomas values peace and quiet at a value of €150. Which of the following statements is true about an efficient solution to this externality problem if Roberto has the right to play loud music and if there are no transaction costs?
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Question 15 of 20
15. Question
Which of the following is true regarding tradable pollution permits and Pigovian taxes?
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Question 16 of 20
16. Question
The gas-guzzler tax that is placed on new vehicles that are very fuel inefficient is an example of
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Question 17 of 20
17. Question
A pigovian tax on pollution:
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Question 18 of 20
18. Question
Tradable pollution permits
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Question 19 of 20
19. Question
When wealthy alumni provide charitable contributions to their universities to reduce the tuition payments of current students it is an example of:
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Question 20 of 20
20. Question
Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future they would probably rank them in the following order (from most favoured to least favoured):
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