Pollution is an example of market failure because

Select one:

a. the market does not produce enough of the good

b. the equilibrium price is higher than the efficient price

c. property rights are poorly distributed

d. the equilibrium price is less than the efficient price

The market demand curve shows

Select one:

a. the quantity of a good that consumers would like to purchase at different prices.

b. the effect of advertising expenditures on the market price of a good.

c. the marginal cost of producing and selling different quantities of a good.

d. the effect on market supply of a change in the demand for a good or service.

A clear advantage to using obligatory control directives to deal with negative externalities is that they

Select one:

a. are relatively simple

b. reduce the need for bureaucrats

c. reduce pollution to zero

d. are costless to monitor and enforce

Suppose you have bought and paid for a ticket to see Kanye in concert. You were willing to pay up to $350 for this ticket, but it only cost you $100. On the day of the concert, a friend offers you a free ticket to Lady Gaga instead. You can resell your Kanye ticket for $80. What do your sunk costs equal?

Select one:

a. $100.

b. $20.

c. $80.

d. $0.

Additional cost associated by producing one additional unit of product.

Select one:

a. Marginal Costs

b. Average Costs

c. Explicit Costs

d. Fixed Costs

Which of the following causes a good to be more elastic?

Select one:

a. Greater percentage of income.

b. Fewer suppliers of the good.

c. Fewer substitutes.

d. Greater necessity.

Question text

For a monopoly firm, which of the following equalities is always true?

Select one:

a. marginal revenue = marginal cost

b. price = average revenue

c. price = total revenue

d. price = marginal revenue

Question text

A tax on petrol encourages people to drive smaller, more fuel efficient cars. Which principle of economics does this illustrate?

Select one:

a. The cost of something is what you give up to get it.

b. People respond to incentives.

c. Rational people think at the margin.

d. People face tradeoffs.

Which of these statements best represents the law of supply?

Select one:

a. When production technology improves, sellers produce less of the good.

b. When the price of a good decreases, sellers produce less of the good.

c. When input prices increase, sellers produce less of the good.

d. When sellers' supplies of a good increase, the price of the good increases.

Question text

Economic scarcity arises from

Select one:

a. exploration.

b. inefficient production.

c. limited resources and limitless wants.

d. limited wants and limitless resources.