A negative of Tradable pollution permits is that...

It is difficult to know how many permits to give out

A positive of Tradable pollution permits is that...

It encourages firms to be innovative and more competitive

A tradable pollution permit can benefit efficient firms because they

Can sell on unwanted allocation to earn revenue

What is allocative efficiency?

Producing the combination of goods most wanted by society

What is dynamic efficiency

Takes into account innovation and technical change

All of the following are benefits of horizontal merger EXCEPT which one of these

Control over sourcesof supply inputs

A concentration ratio measures the

aggregate market share of the largest firms in the market, as a percentage

Which of these would show there is Dynamic Efficiency in a market?

Improving productivity in the Long Run

The difference between a corrective tax and a tradable pollution permit is that

a tax sets the P of pollution and a permit sets the Q of pollution

What is Productive efficiency?

Where a firm is operating at the lowest average cost it can

Define horizontal integration

Firms joining at the same stage of the production process.

A tradeable pollution permit

is designed to reduce the negative externalities arising from pollution.

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2021 P1b U6 Economics

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Questions 22

Answers

1
A negative of Tradable pollution permits is that...
It is cheap to set up
It encourages innovation
It is difficult to know how many permits to give out
It encourages more pollution
2
A positive of Tradable pollution permits is that...
It encourages firms to expand their business
It allows firms to receive more profit
It allows firms to increase their prices
It encourages firms to be innovative and more competitive
3
Definition: When people's decisions are based on the form in which information is presented
Framing
Bounded rationality
Choice architecture
Fairness
4
Allocative efficiency is
AR= MC
MR = MC
AR =MR
AR =AC
5
A tradable pollution permit can benefit efficient firms because they
Have to pay less to buy it than an inefficient firm
Can pollute as much as they want
Can sell on unwanted allocation to earn revenue
Don't pollute so won't be affected
6
What is allocative efficiency?
Producing the minimum amount of goods with certain resources
Producing the maximum amount of goods with certain resources
Producing the combination of goods most wanted by society
Producing the combination of goods least wanted by society
7
What is dynamic efficiency
Achieved when factors of production are fully utilised
Achieved at a particular point in time
Takes into account innovation and technical change
Achieved when society in on the PPF
8
Which of the following concepts is NOT associated with behavioural economics?
Heuristics.
Utility maximization
Satisficing behaviour.
Bounded rationality.
9
All of the following are benefits of horizontal merger EXCEPT which one of these
Sharing of technical knowledge
Economies of scale
Reduction of competition
Control over sourcesof supply inputs
10
Playing festive music in a store at Christmas to remind people to buy gifts is an example of
Satisficing
Choice architecture
Priming
Anchoring
11
A online hotel booking site claims "only 3 rooms left at this price!" This is an example of
Availability bias
Optimism bias
Default bias
Scarcity bias
12
A concentration ratio measures the
concentration of Robinson's squash
aggregate demand of the largest firms in the market, as a percentage
aggregate market share of the largest firms in the market, as a percentage
aggregate supply of the largest firms in the market, as a percentage
13
Which of these would show there is Dynamic Efficiency in a market?
Improving productivity in the Long Run
Increase in costs
Supernormal profits are being made
Inefficiency in the Short Run
14
Calculate the 3 firm concentration ratio
70%
72%
74%
64%
15
The difference between a corrective tax and a tradable pollution permit is that
apermit creates a more efficient outcome than a corrective tax
a tax sets the Q of pollution and a permit sets the P of pollution
acorrective tax creates a more efficient outcome than a permit
a tax sets the P of pollution and a permit sets the Q of pollution
16
What is Productive efficiency?
When the output of a firm maximises total consumer welfare
Where a firm is operating at the lowest average cost it can
Where a firms workers are working at their most productive
The cost after all social externalities are accounted for
17
Many people under-estimate the probability of a severe recession in the US property market. This is an example of?
Framing bias
Scarcity bias
Default bias
Optimism bias
18
Productive Efficiency is where...
MC =AC
P = MC
MC= AR
AC=AR
19
Define horizontal integration
Firms joining at the same stage of the production process.
Firms involved in unrelated business areas merge.
Firm expanding operations through investment within to gain market share.
Firm merging with another firm closer to the suppliers in production.
20
A tradeable pollution permit
can be used only by the firm to which it is issued
will be bought by a firm if price is less than social cost of the pollution
is needed to equalise positive and negative externalities in production
is designed to reduce the negative externalities arising from pollution.
21
Tradeable permits were created to address____
over-fishing
unsafe working conditions
merit goods
carbon emissions
22
What type of behavioural marketing is taking place here? (Apologies for the stereotyping!)
Imposing a mandated choice
Anchoring
Framing
Changing default

2021 P1b U6 Economics Flashcards | StudBud