Economics MCQs

A. Equilibrium quantity to exceed the optimal quantity
B. Equilibrium quantity to equal the optimal quantity
C. Optimal quantity to exceed the equilibrium quantity
D. Equilibrium quantity to be either above or below the optimal quantity

A. By allocating tradable technology permits to high technology industry.
B. To internalize the positive externality associated with technology-enhancing industries.
C. To help stimulate private solution to the technology externality
D. To internalize the negative externality associated with industrial pollution

A. The regulators decide how much each polluter should reduce its pollution.
B. No pollution of the environment is tolerated
C. Each polluter reduces its pollution an equal amount
D. The polluters with the lowest cost of reducing pollution reduce their pollution the greatest amount

A. Ban the good creating the externality
B. Tax the good
C. Subsidize the good
D. Have the government produce the good until the value of an additional unit is zero

A. It is efficient for roberto to stop playing loud music regardless of who has the property right to the level of sound
B. It is efficient for roberto to continue to play loud music
C. It is efficient for roberto to stop playing loud music only if thomas has the property right to peace and quiet
D. It is efficient for roberto to stop playing loud music only if roberto has the property right to play loud music

A. All of these answers are true
B. Pigouvian taxes and tradable pollution permits create an efficient market for pollution.
C. Tradable pollution permits efficiently reduce pollution only if they are initially distributed to the firms that can regulator pollution at the lowest cost.
D. To set the quantity of pollution with tradable pollution permits, the regulator must know everything about the demand for pollution rights.

A. Sets the quantity of pollution
B. Reduces the incentive for technological innovations to further reduce pollution
C. Sets the price of pollution
D. Determines the demand for pollution rights.

A. An attempt to internalize a positive externality
B. An attempt to internalize a negative externality
C. A pigouvian tax
D. A command-and-control policy

A. Lower interest rates
B. Increased lending by the banks
C. An increase in corporation tax
D. An increase in discretionary government spending

A. The amount of tax paid will increase by rs4,800
B. The amount of tax paid will increase by rs4,000
C. The amount of tax paid will increase by rs 800
D. The total tax paid will be rs4,800