. A negative externality causes a private market to produce which of the following quantities? (1) More than market equilibrium (2) More than is socially desirable 3) Less than is socially desirable (4) Less than market equilibrium 2. The social cost of a good is: (1) its benefit to the people who buy and consume it. (2) its total benefit to everyone in the society. (3) the cost paid by the firm that produces and sells it. (4) its cost to everyone in the society. 3. When a factory causes air pollution that harms people who live nearby: (1) the private cost of producing the good exceeds the social cost. (2) the social cost of producing the good exceeds the private cost. (3) the private benefit of the good exceeds the social benefit. (4) the social benefit of the good exceeds the private benefit. 4. Connie's Coal Mill creates a lot of pollution as a result of the mill's coal production activities. If the government regulates coal mill pollution levels and forces the mills to produce at a social cost curve, what will be the impact? (1) A deadweight loss will be created. (2) The price charged by Connie will decrease after the restrictions. (3) Connie will produce more coal now than before the restrictions. (4) There will be no changes because the social cost curve is the same as the private cost curve that Connie currently produces at. . A fertilizer plant emits a very foul odour during the production process. If the government forces the plant to internalize this negative externality, what would result? (1) The supply curve for fertilizer would shift to the right (down). (2) The supply curve for fertilizer would shift to the left (up). (3) The demand curve for fertilizer would shift to the right (down). (4) The demand curve for fertilizer would shift to the left (up).6. Some pollution may be preferable to zero pollution because: (1) there may be significant losses in society's welfare if we attempt to decrease the level of pollution to zero. (2) pollution does not impact the welfare of society. (3) citizens of the nation are against government involvement in solving the pollution problem. (4) there is no form of regulation that has been shown to be effective at solving the pollution problem. 7. When all the positive and negative externalities have been internalized: (1) marginal private benefit equals marginal private cost. (2) marginal private benefit equals marginal social cost. (3) marginal social cost equals marginal private cost. (4) marginal social benefit equals marginal private cost.THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING GRAPH: $ Social Cost Private Cost P P2 P Demand Q2 Q, . In the figure shown: (1) the marginal benefit of the positive production externality is measured by P3 - P1. (2) the marginal cost of the negative production externality is measured by P3 - P2. (3) the marginal cost of the negative production externality is measured by P3 - P1. (4) the marginal cost of the negative production externality cannot be measured. 9. At the private market solution to the market represented in the figure: (1) the total cost of the negative externality is equal to (P3 - P1) x Q1. (2) market efficiency could be improved if output were to be increased. (3) a positive externality is reflected in the difference between Q2 and Q1. (4) the market is at a socially efficient outcome