Externalities quiz

An externality is what?

• An impact on the producer
• An impact on a third party
• An impact on the consumer
• An impact on the government

Externalities...

• Can not be represented in a graph
• Can not be measured
• Affect one type of person in the economy
• Cause governments to respond to decisions to protect third parties

When do negative externalities occur?

• When the consumption or production of a good causes a harmful effect to a third party
• When a product fails and business loose money
• When a product is no taxed
• When the economy is suffering

Positive externalities occur when?

• When private benefits are achieved
• When individuals and society are benefitted 
• When businesses are benefitted
• When there are no negative externalities

What is a social cost?

• Private + external cost
• Private + personal cost
• Personal + added cost
• External + added cost

Another name for a corrective tax is what?

• Intervention Tax
• Smith Tax
• Pigovian Tax
• Market failure Tax

What is the Marginal Private Benefit?

• The marginal cost of enjoying a product
• Benefit to the economy from the production or consumption of a good
• The impact on society from production of a good
• Benefit enjoyed by household/business when producing/consuming a good

What is a tradable pollution permit

• A way of selling off polution
• A permit that allows a country or business to produce a certain amount of pollution
• A way that makes it cheap for businesses to pollute
• A permit that allows a business to safely emit pollution