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Question 1 Which of the following specifically refers to a situation where a third party, outside the transaction, suffers from a market transaction by others? O Spillover O Market Failure O Positive Externality O Negative Externality Question 2 include both the private costs incurred by firms and also costs incurred by third parties outside the production process. O Private costs O External costs O Social costs O Market costsQuestion 3 2.5 pts For Questions 3 - 4, refer to the following graph for the market of hot sauce. The process of producing the hot sauce creates a negative externality as the odors are unpleasant to the surrounding community. The external costs are included in the creation of the social/public supply curve. Price $5.00 $4.00 $3.00 $2.00 $1.0 100 200 300 400 500 600 700 800 900Quantity How many of bottles of hot sauce would the free market produce in the absence of government intervention? O 600 O 500 O 300 O 400 Question 4 2.5 pts What is the efficient output? How many bottles of hot sauce would maximize social well-being? O 500 O 400 O 300 O 600Question 5 In the presence of a negative externality the free market does not produce the efficient outcome. Economists refer to this situation as a O Inefficient equilibrium O Non-optimum outcome Pollution Market failure Question 6 California's Smog Check program which requires cars to emit under a stated quantity of pollutants is an example of which of the following regulations? Pollution Charges Better-Defined Property Rights O Marketable Permits O Command and Control Question 7 What is the more common term for a marketable permit program? O Cap-and-Trade Pay-as-you-throw O Carbon Tax O Pigouvian TaxesQuestion 8 2.5 pts According to the text, though economists can make statements about efficiency, each society has to weight its own values when contemplating the inherent tradeoff between environmental protection and O Biodiversity Economic Output O Productive efficiency O International externalities