Which of the following represents a valid economic rationale for government intervention in the economy? a. Marginal consumer value equals marginal social cost in equilibrium. b. Marginal social cost exceeds marginal consumer value in equilibrium. c. The equilibrium wage rate varies across industries. d. Equilibrium prices vary over the course of the year.

A good is a commons good (or common-property good) if it is a. excludable and rival. b. non-excludable and non-rival. c. excludable and non-rival. d. non-excludable and rival.

A disadvantage of pricing access to the local atmosphere for waste disposal is that a. the cost of installing emissions monitors in flues and managing the programme may exceed the benefits from cleaner air. b. income constrained households may reduce heat to the point of discomfort or illness. c. local residents may feel aggrieved that a previously unpriced natural resource, available freely to everyone, is now just another thing they have to pay for to access. d. All of the above are potential disadvantages of pricing.

An advantage of pricing access to the atmosphere for waste disposal is that it a. allows households to choose how and by how much they respond to the pricing. b. raises funds for the local council, which could be used, for example, to reduce other taxes or to assist households in changing heating habits. c. minimises the cost of emissions reduction and thereby improving air quality. d. All of the above are advantages of pricing.