Quiz 5 Flashcards
Assuming that Jane has the legal right to peace and quiet, which of the following statements is true?
Dick will pay to keep his dog if his benefit exceeds Jane’s cost
A positive consumption externality occurs when:
Jack eats healthily and as a result is very productive at work
Brent and Jess live together. Every morning, Jess makes a smoothie before work and wakes Brent, angering him, since he usually likes to sleep in. How can Brent and Jess solve this problem?
Brent can offer to pay Jess adequately to stop making the smoothies
Emission controls on automobiles provide an example of a:
command-and-control policy to increase social efficiency
Aaron has a tree in which bats like to perch. He is worried his children will catch a disease from the droppings if they play in the garden, but knows the droppings are also good fertiliser for the garden. These effects of the bats perching in the trees are examples of:
both positive and negative externalities
A policy that restricts the use of a mobile phone while driving an car would best be applied to a market characterised by
Demand going down (to the left)
Assume that your housemate is very messy. Suppose he gets a $200 benefit from being messy but imposes a $100 cost on you. The Coase theorem would suggest that an efficient solution would be for you to:
continue to live with your messy housemate until you are able to make other living arrangements elsewhere
Assuming that everyone prefers to live in a society without poverty, which of the following statements are true of private anti-poverty programs?
(i) people who don’t contribute still receive benefits from the general reduction in poverty
(ii) the socially optimal level of charitable donations is greater than those actually received, because of the free-rider problem
(iii) there is no individual incentive to contribute to private anti-poverty programs since the government is the sole supplier
(i) and (ii)
If everyone prefers a society without poverty, then which of the following statements is true:
taxing the wealthy to increase living standards for the poor makes everyone better off
It is sometimes possible for households to use their neighbours’ wireless internet without permission. What type of problem is encountered in this situation and what might be done about it?
Without a password the internet is a public good and the neighbours should impose a password to make it more like a private good
For the purpose of cost–benefit analysis, the value of a human life is sometimes calculated on the basis of:
the risks that a person voluntarily exposes herself to in her job and/or recreational choices
Economists can get some sense about what value people put on their own lives by:
comparing wages in risky and less risky occupations, controlling for other determinants of wages
Common resource goods are:
rival and non-excludable
An easy solution to the problem of excessive fishing is prevented because:
(i) many countries have access to the oceans so any solution would require international cooperation
(ii) fishing rights are only assigned by the UN and the process to obtain them is very long
(iii) the oceans are very vast and it is thus very difficult to enforce an agreement
(i) and (iii)
