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1.4 Externalities Flashcards | StudBud

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1.4 Externalities

10 terms·StudBud Administration·366 plays

An economics quiz to revise externalities

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Questions 10

Answers

1
Which is the best evaluation point against the policy of advertising against smoking?
Can be costly for firms
Can be costly for governments
Can be politically difficult to pass through parliament
The litter can be unsightly
2
Which of these is not negatively affected by an indirect tax to solve an externality?
Government
Consumers
Producers
Society
3
What type of externality is this?
Negative production externality
Positive production externality
Negative consumption externality
Positive consumption externality
4
When the price of one good increasing increases the supply of another, this is
Cross-price elasticity of supply
Competitive supply
Joint supply
Inelastic supply
5
The government intervention shown could be...
Direct government provision
Advertising
Subsidy
Indirect tax
6
What does the distance indicated by the THIS represent?
External benefit
Deadweight loss
Extent of the tax
External cost
7
What is this a definition of?
Infrastructure
Demerit goods
Merit goods
Public goods
8
On a demand and supply diagram, consumer surplus is found
Above the market price
At Qopt
Between the two marginal cost curves
At Qfree
9
Why is this considered a deadweight loss?
At Qfree, MSC > MPC
At Qfree, MSC > MSB
At Qfree, MPB = MPC
At Qopt, MSC > MSB
10
Society would prefer more consumption/production when...
MSC>MPC
MPB>MSB
MSB>MSC
MSB<MSC