Fish Economics Test, Chapters 12-14

16 Questions | Total Attempts: 11

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Economics Quizzes & Trivia

This test covers the chapters on Negative Externalities and the Environment, Positive Externalities and Technology, and Public Goods.


Questions and Answers
  • 1. 
    An externality occurs when a voluntary exchange between two parties directly affects a third party who was not a buyer or a seller in the exchange.  It is always negative.
    • A. 

      True

    • B. 

      False

  • 2. 
    A pollution tax is
    • A. 

      A tax that works by giving polluters a set of permits to emit a certain amount of pollution.

    • B. 

      The name given to the set of regulatory policies that specifies an amount of pollution that can be legally taxed but prohibits any larger amount.

    • C. 

      Imposed on producers per unit of pollution.

    • D. 

      A tax imposed that is scheduled to decrease pollution over time.

  • 3. 
    Check all that is true of a marketable paremit.
    • A. 

      They work by giving polluters a set of permits to emit a certain amount of pollution.

    • B. 

      They are sold when some people receive benefits from the market of public goods without a need to pay their fair share of costs.

    • C. 

      If a polluter can reduce pollution by more than the amount of the permit, then the permit can be sold to another.

    • D. 

      If a polluter can reduce pollution by less than the amount of the permit, then the permit can be sold to another.

    • E. 

      If a new producer is producing pollution, that producer can purchase a pollution permit from another.

  • 4. 
    Professor Taylor believes global warming is a realistic concern and since it is inevitable, it must be discussed in the Economics course. 
    • A. 

      True

    • B. 

      False

  • 5. 
    Check all that is true of zero pollution.
    • A. 

      It is a realistic policy goal.

    • B. 

      In a literal sense, it would mean that people can't exhale carbon dioxide or create sewage.

    • C. 

      In a literal sense, it would mean shutting down most of industry and economy.

    • D. 

      The EPA enforces this policy any chance they can.

  • 6. 
    Appropriability is a term that economists use to describe
    • A. 

      A formula, process, device, or item of information that gives a business an appropriate advantage over its competitors.

    • B. 

      Direct government funding of appropriate research through universities, private research organizations, or firms.

    • C. 

      When a seller cannot exclude those who did not appropriately pay from using the good.

    • D. 

      The ability of a producer to reap the benefits of an investment or an invention.

  • 7. 
    What are the four legal  forms of the protection of intellectual property in the United States?  Check all four.
    • A. 

      National defense

    • B. 

      Public health

    • C. 

      Patent

    • D. 

      Public good

    • E. 

      Free rider

    • F. 

      Trade secret

    • G. 

      Trademark

    • H. 

      Copyright

    • I. 

      Prisoner's dilemma

  • 8. 
    Government has a range of policies to subsidize innovation more directly.  Which one of the below is NOT one of them?
    • A. 

      Direct government funding of research through universities, private research organizations or firms.

    • B. 

      Provision of tax credits to business for research and development.

    • C. 

      Provision of labor unions to facilitate better communication in the workplace.

    • D. 

      Provision of support for research and development through subsidizing the spread of information across organizations, across the country through such methods as helping to build the Internet, and across international boundaries.

  • 9. 
    The ultimate goal of economic innovation is to be nice to innovators, not to encourage a steady stream of innovations that can increase the standard of living in the U.S. economy.
    • A. 

      True

    • B. 

      False

  • 10. 
    There are two characteristics of a public good: 1. __________________________ means a seller cannot exclude those who did not pay from using the good.   2. _________________________means the good itself is not diminished as more people use it.  (write the two words without capitalization, and separate them with a comma)
  • 11. 
    A public good is an extreme example of
    • A. 

      A negative externality

    • B. 

      A communistic benefit

    • C. 

      Obammacare

    • D. 

      A Prisoners' Dilemma

    • E. 

      A positive externality

    • F. 

      A free rider

  • 12. 
    Check all that is true of the Prisoners' Dilemma.
    • A. 

      It is a classic example of how the pursuit of rational self-interest can make all parties worse off.

    • B. 

      The free rider problem is a version of this.

    • C. 

      It is of great importance to economic analysis, because it illustrates a fundamental situation in which the the pursuit of self-interest by each individual party leads to outcomes that no one would mind if all players could find a way to cooperate.

    • D. 

      Retailers and shoppers on Black Friday are good examples.

    • E. 

      If the two prisoners cooperate and neither one confesses, they will be worse off.

    • F. 

      If the two prisoners cooperate and neither one confesses, they will be better off.

  • 13. 
    What is the Free Rider Problem?
    • A. 

      When some people can receive benefits from public goods without a need to pay their fair share of the costs.

    • B. 

      When goods with negative externalities have social costs higher than their private costs; they will be overproduced and be free.

    • C. 

      When poverty increases at the same time that inequality is falling.

    • D. 

      Personal recognition and shaming the producer into giving the good to the consumer for free.

  • 14. 
    The S&P and the Dow rise and fall at the same time.
    • A. 

      True

    • B. 

      False

  • 15. 
    You can now use a mobile app to play the SMG.
    • A. 

      True

    • B. 

      False

  • 16. 
    1.  Please write your name here.  If you do not write your name, you will not receive credit for this test. 2.  In one or two complete sentences, tell something you have learned about the stock market that you will remember always from playing the SMG. 3.  In one or two complete sentences, tell something you are learning from the research on your Black Friday project.