Topics 9 and 10 Group Competition Quiz

Free riding can occur if a good is

• a private good

• excludable and nonrival

• excludable and rival

• nonexcludable and nonrival

The ʺtragedy of the commonsʺ refers to

• the absence of incentives to prevent the overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably.

• the inability of lower income groups to achieve a higher level of education.

• the tendency for bureaucrats to maximize their budget.

• the acceptance of deplorable working conditions by those who lack the human capital to obtain a better job.

One way to alleviate the tragedy of the commons is to

• make the resource private property.

• distribute common resources among those individuals, who really need the resource, free of charge.

• allow all individuals to use the resource free of charge.

• set a price of $1 per unit of the common resource because it is an afforable price.

When an additional unit of output is produced, the extra cost to society is the

• marginal private cost.

• marginal external cost.

• marginal social cost.

• average total cost.

Air pollution generated by a paper mill factory is an example of a

• negative production externality

• positive consumption externality

• negative consumption externality

• positive production externality

If a good is a public good,

• anyone can be excluded from enjoying its benefits

• consumers pay a low price

• no one can be excluded from enjoying its benefits

• economies of scale exist over the entire range of output for which there is demand

Greenwashing is defined as

• the act of informing consumers regarding the environmental practices of a company or the environmental benefits of a product or service.

• the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.

• the act of gaining consumers by marketing the environmental practices of a company or the environmental benefits of a product or service.

• the act of excluding consumers resulting from the environmental practices of a company or the environmental harm a product or service causes.

For a good whose production generates external costs

• the market equilibrium quantity will be lower than the socially optimal quantity.

• the market equilibrium quantity will be higher than the socially optimal quantity.

• the market equilibrium quantity will be equal to the socially optimal quantity.

• the market equilibrium quantity will be irrelevant to the socially optimal quantity

When we say there is a deadweight loss, it does not mean the positive externality causes harm. Rather, failure to account for the positive externality makes the economic surplus associated with private equilibrium _________ than it could have been.

• larger

• equal to

• more

• smaller

The socially optimal level of output occurs where social MC _________ the demand curve.

• is below

• is above

• intersects

• is in line with