25.

I decide to collect old rusted cars and scatter them on my property in front of my house. Based on the lessons of this unit

Group of answer choices

there is no market failure as I own the property

I am acting irrationally

my actions create a negative externality

car collection is a contestable market

26.

Pollution permits may be created by government. Assume a perfectly inelastic supply of pollution permits. All else equal, if the government increased the number of permits:

Group of answer choices

the price of pollution rights would fall, and pollution would also fall

the price of pollution rights would rise, and pollution would rise

the price of pollution rights would rise, and pollution would fall

pollution would not be affected

the price of pollution rights would fall, and pollution would rise

26.

Brazil has a gini coefficient of .64 while Costa Rica has one of .37. This tells us

Group of answer choices

Costa Rica is wealthier and has less income equality

Brazil is wealthier and has less income equality

Brazil has greater income inequality but we do not know about wealth

Brazil is wealthier and has greater income equality

Costa Rica is wealthier and has greater income equality

Costa Rica has greater income inequality but we do not know about wealth

Brazil is wealthier but we do not know about income equality

28.

The tragedy of the commons problem

Group of answer choices

occurs when access to common property resources is unrestricted

arises whenever property rights are well defined

is usually caused by government intervention into private markets

is an example of predatory pricing

occurs whenever goods are not rival in consumption

29.

The reason economists generally do not believe that direct regulation (by government command) is the most efficient method of dealing with negative externalities is because:

Group of answer choices

it does not take into account that the costs of reducing consumption are the same for all individuals.

it does not take into account that the costs of reducing consumption may differ among individuals.

it does not take negative externalities into account.

affected firms ignore regulations; for example, by dumping toxic waste illegally.