Economics Chapter 16 Section Emissions Taxes 11 Multiple Choice Acid

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Test Canvas : Self-Test Quiz – Chapter 16

Microeconom ics, 3e

Test Canvas: Self-Test Quiz – Chapter 16

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1. Multiple Choice: Acid rain is caused by:

Question Acid rain is caused by:

Answer

automobile exhaust.

2. Multiple Choice: Suppose chicken farm waste flowed int…

Question Suppose chicken farm waste flowed into a river used by a neighbor for drinking

water. The results of the Coase theorem s are relevant when the legal rights to the

river are given to:

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3. Multiple Choice: Tradable emissions permits are used to:

Question Tradable emissions permits are used to:

Answer

reduce sulfur dioxide emissions by requiring firms to pay a pollution tax.

4. Multiple Choice: Suppose a farmer in Nebraska incurs &...

Question Suppose a farmer in Nebraska incurs $8,700 in crop damage from sparks that are

created when a local railroad company sends trains along tracks bordering the

farm. This damage can be best described as a:

Points: 1

5. Multiple Choice: The optimal Pigouvian tax is equal to...

Question The optimal Pigouvian tax is equal to the marginal social:

Answer

benefit of pollution at the market-determined level of pollution.

6. Multiple Choice: Since the United States passed the Cl…

Question Since the United States passed the Clean Air Act in 1970, overall emission of

pollutants into the air has:

Answer

fallen by 90%.

7. Multiple Choice: An emissions fee equal to the optimal...

Question An emissions fee equal to the optimal Pigouvian tax on coal has the effect of

_____________ the externality associated with the burning of coal, while ensuring

that the marginal benefit of pollution _________ the marginal cost of pollution.

Points: 1

8. Multiple Choice: Apartment dwellers near Wrigley Field...

Question Apartment dwellers near Wrigley Field in Chicago are often able to watch the

Chicago Cubs baseball team play from the roof of their apartment building, without

having to pay the cost of buying a ticket. This is an example of a:

Answer

marginal social cost.

9. Multiple Choice: An emissions tax equal to the margina...

Question An emissions tax equal to the marginal social cost of pollution at ___________

induces polluters to internalize the externality and leads to the socially optimal

quantity of pollution.

Points: 1

10. Multiple Choice: Suppose the local government decides …

Question Suppose the local government decides to tax emission of sulfur dioxide. The

optimal Pigouvian tax equals the marginal cost of:

Answer

production at the socially optimal quantity of pollution.

11. Multiple Choice: Acid rain is harmful to which of the …

Question Acid rain is harmful to which of the following?

Answer

trees.

12. Multiple Choice: The Coase theorem asserts that:

Question The Coase theorem asserts that:

Points: 1

13. Multiple Choice: Although Mike has a legal right to li...

Question Although Mike has a legal right to listen to any kind of music, suppose his

roommate John dislikes the heavy metal music Mike plays on his iPod dock.

According to the Coase theorem, an efficient private solution to this negative

externality can be found:

14. Multiple Choice: When an emissions tax is imposed on p...

Question When an emissions tax is imposed on production of a good, the price will be

__________ than it would be in the absence of the tax, and the equilibrium quantity

will be __________ :

Points: 1

15. Multiple Choice: Tradable emissions permits:

Question Tradable emissions permits:

16. Multiple Choice: Which of the following is not a negat…

Question Which of the following is not a negative externality?

Answer

second-hand smoke

17. Multiple Choice: In some countries, motorists pay an e…

Question In some countries, motorists pay an extra fee to travel on congested highways at

peak times. This extra fee serves to:

Points: 1

18. Multiple Choice: If an emissions tax is imposed but it...

Question If an emissions tax is imposed but it is less than the optimal Pigouvian tax, then:

19. Multiple Choice: A system of tradable emissions permit...

Question A system of tradable emissions permits ensures that:

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20. Multiple Choice: Network externalities:

Question Network externalities:

Answer

can have a negative externality or a positive externality on a society.

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Points: 1