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Worksheets6.04 Module Review Econ
Total questions: 13
Worksheet time: 26mins
The city council allocates funds for repairs on local roads. Which of the following circumstances would be a positive externality?
Traffic flow in the city improves.
Municipal taxes increase to fund added services.
Citizens spend less money repairing punctured and torn tires.
Gas stations throughout the city reduce fuel prices.
A local citizen decides to open a new sushi restaurant downtown. What would most likely be a negative externality?
The old sushi place nearby loses some customers
The city government collects more tax revenue.
Neighboring stores get more foot traffic
Customers of the old sushi place see a drop in prices
The Ford factory lays off workers during a recession. Which of the following would most likely feel a negative externality?
Factory owners
Neighboring businesses
Factory workers
Competing businesses
A cattle ranch decides to expand its operations. Which of the following would be a negative externality for the local environment?
Less use of renewable resources
Less land for development
Higher property taxes
More groundwater pollution
Thirty nations sign a treaty pledging limits on CO2 emissions and the development of renewable resource energy production. Which of the following would be a long-term positive externality for global health?
Increased land allocation for wind farms
More manufacturing of vaccines
Lower rates of childhood asthma
Reduction of vitamin deficiencies in children
Which of the following would most likely constitute a negative externality affecting free resources?
groundwater pollution
lower property taxes
new economic development
lower property values
The state of Michigan funds a program to recruit outstanding scholars and researchers to reduce pollutants in the Great Lakes and restore endangered species. Over time, area residents benefit from cleaner water resources and a thriving ecosystem. Which of the following represent free riders in this example?
area residents
MI government officials
pollutants
scholars and researchers
What would be a positive externality for the developing nation, if a U.S. manufacturing company established a fair trade agreement with the nation?
education levels may rise
Competing U.S. corporations may fix workers' wages at a lower rate.
Manufacturers may lower fees to compete with other countries' prices.
Military enrollment may rise.
Which of the following terms means "the resources necessary to create a good or service"?
product market
factors of production
circular flow
externalities
Which of the following is NOT one of the 4 main players in the economy on a circular-flow diagram?
households
business firms
the rest of the world
natural resources
the government
Which of the following means "costs or benefits to third parties"?
free riders
incentives
externalities
inefficiencies
Which of the following is NOT likely to be a factor that causes externalities?
free resources
commons
free riders
private consumption
religious beliefs
Which of the following terms means "power of a government to pay for and take a person's property for an alternative use without consent"?
externalities
fiscal policy
eminent domain
vertical consolidation
