2 A market is efficient when: A) Producers can have as much surplus as they want. B) Consumer surplus is as large as possible. C) The total of consumer surplus plus producers surplus is as large as possible. D) Consumer and producers surplus are equal. Question 6 A) Is equal to the marginal social cost of pollution, since benefits to producers are equal to costs to consumers. B) Can be measured as the additional gain to society from one additional unit of pollution. C) Is zero, since pollution is not beneficial. D) Is easy to estimate, since polluters are required to file this information in their tax returns. Question 9 Which of the following is an example of an activity generating a negative externality? A) The only two coffee shops in town conspire to raise prices. B) Your next door neighbor mows the lawn at 6 am. C) You buy a new car, then discover it needs a new transmission. D) After Jane bought health insurance, she began racing motorcycles on the weekends. Question 28 A negative externality is internalized if A) The one who had been generating the externality stops having an effect on others. B) The one who generates the externality does not agree that there is any spillover cost. C) People are aware that social costs are greater than their costs. D) The one who generates the externality includes the cost of the externality on their private costs. Question 29 A negative externality can be internalized by: A) Persuading polluters that it is not in their interest to pollute. B) Imposing a tax on pollution. C) Assigning property rights to the affected resource to someone. C) Getting polluters to sign a binding agreement not to pollute. D) All of the above are ways to internalized an externality