1. Which of the following makes it likely there will be market failure?
2. unforeseen circumstances which leads to the bankruptcy of many firmsincomplete property rights or the inability to enforce property rightsa lack of government intervention in a marketa severe fall in the value of various stock indices.

1.5 points

QUESTION 7

1. Which of the following is a situation involving a negative externality
2. A garbage disposal gets built close to your house and causes pollution.The company you work for orders new desks but you don't get one.You are walking down the street and you get robbed.The Olympics are hosted by your town causing all the hotels to fill.

1.5 points

QUESTION 8

1. Which of the following would result in a positive externality?
2. An electric utility burns coal that causes acid rain.
3. World-wide Wifibecomes freely available to all.
4. A local government establishes a price ceiling on rental apartments.
5. McDonald's eliminates all salads from its menu.

1.5 points

QUESTION 9

1. The Coase theorem states that
2. if transactions costs are low, private bargaining will result in an efficient solution to the problem of externalities.a free-market equilibrium is the best solution to address externalities.government intervention is always needed if externalities are present.assigning property rights is the only thing the government should do in a market economy.

1.5 points

QUESTION 10

1. A pair ofbluejeans are a rival good.
2. False
3. True

1.5 points

QUESTION 11

1. All of the following meet the criteria of public goods except
2. US National Park designated Campgrounds
3. Local Sewer System
4. Police Protection
5. National Defense

1.5 points

QUESTION 12

1. Everybody in the town agrees a new bridge is needed but the attempts to raise private money for the bridge continually fail, despite the community's affluence. Which economic term best describes this phenomenon?
2. Negative externalitythe Free-Rider problemExternal Benefita Rival Good problem

1.5 points

QUESTION 13

1. Congress passed the Clean Air Act in 1970. Since this act was passed emissions of sulfur dioxide, lead and carbon monoxide air pollutants
2. have fallen by roughly 75%.
3. have remained essentially constant, even though significant economic growth has occurred in the United States since 1970.
4. cannot be measured since Congress failed to appropriate money to monitor the level of emissions.
5. have increased significantly due to the growth of the U.S. economy.