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WorksheetsExternalities
Total questions: 5
Worksheet time: 3mins
Name
Class
Date
1.
Markets exhibiting negative externalities will
a)
under produce
b)
over produce
c)
be optimal
d)
none of the above
2.
Markets exhibiting positive externalities will
a)
over produce
b)
under produce
c)
optimal
d)
none of the above
3.
What is the market-based response by government to correct a market failure caused by a negative externality?
a)
Pigouvian sibsidy
b)
Quota
c)
Pigouvian tax
d)
All of the above
4.
It is efficient to eliminate the production of a good with a negative externality.
a)
True
b)
False
5.
According to the Coase theorem, what could prevent two parties from coming to a mutual agreement?
a)
High market price
b)
High transaction cost
c)
externalities
d)
external benefits
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