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Worksheetspearson ch 6 market failure
Total questions: 30
Worksheet time: 17mins
the best example of assymetric information would be
the students get A- as an average in year 12
doing good DEEEDS will help
minimal HW is all you need to excel in the economics course because its easy and just one step at a time
A government might tax a good that creates negative externalities in order to try to:
Decrease consumption of the good and thus reduce the triangle of welfare loss
Make the information avaliable more asymmetric
Decrease demand for the good and thus increase the consumer surplus
When a third party member is affected by the interaction of a buyer and seller, we call this
An externality
total welfare loss
consumer surplus
A market failure is best described as
The idea that market forces of supply and demand always provide the maximum benefit for society
The idea that market forces of supply and demand do not always provide the maximum benefit for society
The concept that a decision made by one party can have negative effects on another party
By-products of production or consumption that impose costs on third parties are known as
negative externalities
rival externalities
positive externalities
Which of the following can practice collusion?:
a monopolistically-competitive firm
an oligopoly
a monopoly
Dioxin emission that results from the production of paper is a good example of a negative externality because
self-interested paper firms are generally unaware of environmental regulations.
there are fines for producing too much dioxin.
self-interested paper producers will not consider the full cost of the dioxin pollution they create.
This cartoonist probably agrees that businesses would be more productive if the government
set higher ergonomic standards for the workplace
interfered with business less
protected business more
The role of government in a market system
includes improving on situations that would otherwise result in a government failure?
is restricted to establishing property rights
includes improving situations that would otherwise result in a market failure
Using resources in such a way that we continue living in a developed world, but at the same time we protect the environment. This is the definition of:
Suspensability
Ecology
Sustainability
What can be done to solve problems related to the tragedy of the commons?
Privatization
Regulations, restrictions and quotas
All of the above
Police protection is an example of a _ good and apples are an example of a _ good.
Public; Private
Private; Public
Private; Private
Goods that are provided by the government (and paid for through taxation) are known as:
Private goods
Public Goods
Cartels
Government regulation may negatively affect businesses in the following ways by
Increasing input costs
Increasing profits
Lowering consumer prices
government businesses cannot always provide goods and services
Profitably
Fairly
Safely
When the government creates a law used to protect individuals this is know as:
Deregulation
Regulation
Positive Externality
Most schools require all students to have their immunizations before they can attend. This is to help protect those who are immunocompromised and cannot safely receive the shots. This unintended benefit to a third party is considered to be:
Regulation
Negative Externality
Positive Externality
Jose was smoking in a car with a minor (someone under the age of 18). This is illegal because it can hurt the lungs of others in the car. This unintended harm to a third party is considered to be:
Regulation
Negative Externality
Deregulation
This is an example of which role of government?
Maria was heavily fined for going into the movie theater and trying to illegally film a copy of the movie It because. This is considered a violation of copyright laws.
Protecting Property Rights
Providing Public Goods and Services
Regulation
Economics is the study of
how society manages its unlimited resources.
how to reduce our wants until we are satisfied.
how to fully satisfy our unlimited wants.
in this type of economy competition is allowed to flourish with a minimum government interference
command economy
Oligarchy
free enterprise
What is an example of a negative consumption externality?
Environmental Pollution
Increased research and development into cancer prevention
Health impacts for society of passive tobacco smoking
What does it mean to internalise an externality?
Trade permits between firms until the externailty decreases to zero through an shift upwards of the MSC curve to intersect at the new optimal level of production
The costs that were previously imposed on society are made internal because they are now paid for by the two parties to the transaction; the producers and the consumers
The costs that were previously imposed on society are made internal because they are now paid for by the producers entirely
A tax which is the fixed percentage of the price of the good or service
Specific Taxes
Ad Valorem Taxes
Excise Taxes
"Assistance by the government to individuals or groups or individuals, such as firms, consumers, industries or sectors of an economy" Is the definition for
Excise Taxes
Ad Valorem Taxes
Subsidies
