If a firm does not take account ofthe negative externality caused by its production it will produce where: Select one: C: a. marginal private cost equals marginal social benet (it b. marginal private cost equals marginal private benefit 0 c. marginal social cost equals marginal social benefit 0 d. marginal social cost equals marginal private benet Clear my choice Suppose that vaccinating children has a positive externality. Which of the following policies might help to correct the market failure. Tick all that apply. Select one or more: Cl a. Establish clear property rights b. Establish a market in children being vaccinated :I c. Make vaccination compulsory but charge the cost of rt d. Makevaccination free Which of the following are examples of negative externalities. Tick all that apply. Select one or more: Cl a. I pick up a piece oflitter on the street and put it in the bin b. I pick a ower from the park and prevent you from enjoying rt c. I push my way onto a tube train in rush hour D d. | buy a banana, eat it and prevent you from eating it. CI e. I travel by tube in the middle of the afternoon It is often said that the value of ivory might be what causes extinction of the elephant. But the value of wool does not threaten the continued existence of the sheep. Why the difference? Select one: Q a. Ivory is a non-rival good; wool is not. O b. People tend to own sheep; elephants tend to be owned by nobody (i) c. Ivory is expensive and wool is cheap 0 d. Elephants tend to live in developing countries Clear my choice Which of the following are public goods? Tick all that apply. Se ect one or more: I: a. Kew Gardens (you need to pay to enter} C D. The BBC c. Hyde Park d. A Lighthouse e. The Thames Flood Control Barrier The fIre service is free of charge to those who need it. Why do you think this is? Select one: Q a. Because its an important public service b. Because there is an ekternality caused by the fact that if my house burns down it is likely to affect others 0 c. Because people cant afford to pay for it Clear my choice I pa id the LSE some fees to have someone teach me Economics and some years later I discovered everything I was taught was rubbish. Is this likely to be an example of: Select one: a. Misinformation O D. Adverse Selection 0 c. Moral Hazard Q d. The natural outcome of a perfectly competitive market Clear my choice Suppose that consumers nd it hard to directly observe the hygiene standards of restaurants in which they are eating. Which of the following policies might help to correct the market failure caused by the asymmetric information? Tick all that apply. Select one or more: a. Establish laws on minimum hygiene standards b. Have professional kitchen inspectors who publish their results :1 c. Have restaurants offer guarantees that their food will not poison you d. Make restaurants liable for any food poisoning they may cause Suppose the government insists that profit-maximizing insurance companies charge the same price for everyone to be insure themselves against the risk of loss from an earthquake. It then finds the price is very high and take-up very low. Why has this happened? Select one: O a. Nobody wants to buy earthquake insurance O b. Adverse Selection O c. Moral Hazard O d. Government regulation always messes up markets Clear my choice Healthcare is provided free in the UK. Is healthcare in principle: Select one: O a. Non-rival and excludable O b. Rival and non-excludable O c. Rival and excludable O d. Non-rival and non-excludable Clear my choice