Question 1

The song "Happy Birthday" is likely protected

Accepted Answer

A) as a trade secret. 
B) with a patent. 
C) under copyright law. 
D) in a trust. 
A) as a trade secret. 
B) with a patent. 
C) under copyright law. 
D) in a trust.

Question 2

Who said "If it moves, tax it. If it still moves, regulate it. If it stops moving, subsidize it."?

Accepted Answer

A) Barack Obama 
B) Ronald Reagan 
C) Vilfredo Pareto 
D) Adam Smith 
A) Barack Obama 
B) Ronald Reagan 
C) Vilfredo Pareto 
D) Adam Smith

Question 3

The exclusive privilege to use an asset is called a(n)

Accepted Answer

A) property right. 
B) exclusive use agreement. 
C) property privilege. 
D) right to work privilege. 
A) property right. 
B) exclusive use agreement. 
C) property privilege. 
D) right to work privilege.

Question 4

Which of the following is NOT a common property?

Accepted Answer

A) a city park 
B) a main street 
C) a public beach 
D) a movie screening 
A) a city park 
B) a main street 
C) a public beach 
D) a movie screening

Question 5

If the government regulates the price a monopoly can charge, and the price ceiling is set below what the competitive market price would be, then

Accepted Answer

A) a shortage will exist. 
B) a surplus will exist. 
C) producer surplus is maximized. 
D) consumer surplus is maximized. 
A) a shortage will exist. 
B) a surplus will exist. 
C) producer surplus is maximized. 
D) consumer surplus is maximized.

Question 6

An exclusive deal is

Accepted Answer

A) always illegal. 
B) welfare reducing. 
C) one where a firm will only sell to a customer if the customer agrees not to buy anything from the firm's rivals. 
D) All of the above. 
A) always illegal. 
B) welfare reducing. 
C) one where a firm will only sell to a customer if the customer agrees not to buy anything from the firm's rivals. 
D) All of the above.

Question 7

Which of the following would be considered open-access common property?

Accepted Answer

A) a library 
B) the world wide web 
C) a company gym 
D) broadcast television 
A) a library 
B) the world wide web 
C) a company gym 
D) broadcast television

Question 8

In the U.S., one example of a cartel that is legal is

Accepted Answer

A) the railroads, including Union Pacific. 
B) the oil industry. 
C) Major League Baseball. 
D) None, all cartels are prohibited. 
A) the railroads, including Union Pacific. 
B) the oil industry. 
C) Major League Baseball. 
D) None, all cartels are prohibited.

Question 9

The socially optimal amount of pollution is

Accepted Answer

A) zero. 
B) greater than zero. 
C) indeterminant. 
D) unattainable. 
A) zero. 
B) greater than zero. 
C) indeterminant. 
D) unattainable.

Question 10

Governments can eliminate market failure due to an imperfectly competitive market by

Accepted Answer

A) changing the market structure, for example by eliminating monopoly protection. 
B) having the government own the monopoly. 
C) imposing regulations that reduce prices. 
D) All of the above. 
A) changing the market structure, for example by eliminating monopoly protection. 
B) having the government own the monopoly. 
C) imposing regulations that reduce prices. 
D) All of the above.

Question 11

If a production process generates pollution, then a competitive market will produce more of the good than is socially optimal because

Accepted Answer

A) firms take all costs into consideration. 
B) firms incur all costs of production but ignore some of them. 
C) firms ignore the costs of production that they do not incur. 
D) firms set price equal to social marginal cost. 
A) firms take all costs into consideration. 
B) firms incur all costs of production but ignore some of them. 
C) firms ignore the costs of production that they do not incur. 
D) firms set price equal to social marginal cost.

Question 12

Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's Theorem, the optimal level of trash in the park can be achieved if

Accepted Answer

A) someone is assigned property rights to the park. 
B) government limits the use of the park. 
C) nobody catches Al leaving the trash. 
D) Bert moves. 
A) someone is assigned property rights to the park. 
B) government limits the use of the park. 
C) nobody catches Al leaving the trash. 
D) Bert moves.

Question 13

If a production process creates pollution, a competitive market produces excessive pollution because

Accepted Answer

A) the firms do not include the social cost of the pollution in their profit-maximizing decisions. 
B) the firms place too high a price on society's cost of inflation. 
C) people are not injured by the pollution. 
D) zero pollution is optimal. 
A) the firms do not include the social cost of the pollution in their profit-maximizing decisions. 
B) the firms place too high a price on society's cost of inflation. 
C) people are not injured by the pollution. 
D) zero pollution is optimal.

Question 14

What is one reason drunk driving is held in such disrepute?

Accepted Answer

A) Drunk driving imposes high potential costs on non-drunk drivers. 
B) Drunk driving destroys cars and telephone poles, causing disruption in essential services. 
C) Only drunk drivers cause automobile fatalities. 
D) Drunk drivers impose high potential costs on other drunk drivers. 
A) Drunk driving imposes high potential costs on non-drunk drivers. 
B) Drunk driving destroys cars and telephone poles, causing disruption in essential services. 
C) Only drunk drivers cause automobile fatalities. 
D) Drunk drivers impose high potential costs on other drunk drivers.

Question 15

One way to avoid the free rider problem is

Accepted Answer

A) through mandates. 
B) for the government to provide the good or service. 
C) to use social pressure. 
D) All of the above. 
A) through mandates. 
B) for the government to provide the good or service. 
C) to use social pressure. 
D) All of the above.

Question 16

A firm charging prices below marginal cost is said to be engaged in

Accepted Answer

A) price fixing. 
B) predatory pricing. 
C) a cartel. 
D) irrational behavior. 
A) price fixing. 
B) predatory pricing. 
C) a cartel. 
D) irrational behavior.

Question 17

An externality

Accepted Answer

A) is always either a negative or positive externality. 
B) could be either a negative or positive externality. 
C) can be a negative externality for one group of people and a positive externality for another. 
D) creates market failures only when they are negative. 
A) is always either a negative or positive externality. 
B) could be either a negative or positive externality. 
C) can be a negative externality for one group of people and a positive externality for another. 
D) creates market failures only when they are negative.

Question 18

Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's Theorem, the optimal level of trash in the park can be achieved if

Accepted Answer

A) Al is fined by the government. 
B) Al has the right to leave trash and Bert cannot do anything about it. 
C) Al has the right to leave trash and Bert can pay him to limit his dumping. 
D) Bert moves. 
A) Al is fined by the government. 
B) Al has the right to leave trash and Bert cannot do anything about it. 
C) Al has the right to leave trash and Bert can pay him to limit his dumping. 
D) Bert moves.

Question 19

The Commons Problem arises because

Accepted Answer

A) firms don't maximize profits. 
B) social and private incentives are not aligned and property rights are missing. 
C) social cost equals private cost and property rights are missing. 
D) social benefit equals private benefit and property rights are missing. 
A) firms don't maximize profits. 
B) social and private incentives are not aligned and property rights are missing. 
C) social cost equals private cost and property rights are missing. 
D) social benefit equals private benefit and property rights are missing.

Question 20

Consider a housing development built near an existing airport. After the houses are occupied, homeowners complain that the airport imposes a negative externality on them and it should be moved or otherwise limited. Is the airport a negative externality?

Accepted Answer

A) No, the airport was there first. 
B) No, if the original property values reflect the costs imposed by the airport. 
C) No, airports are government entities and therefore don't impose costs on individuals. 
D) Yes, the airport's noise should be curtailed for the well-being of the homeowners. 
A) No, the airport was there first. 
B) No, if the original property values reflect the costs imposed by the airport. 
C) No, airports are government entities and therefore don't impose costs on individuals. 
D) Yes, the airport's noise should be curtailed for the well-being of the homeowners.

The song "Happy Birthday" is likely protected

Who said "If it moves, tax it. If it still moves, regulate it. If it stops moving, subsidize it."?

The exclusive privilege to use an asset is called a(n)

Which of the following is NOT a common property?

If the government regulates the price a monopoly can charge, and the price ceiling is set below what the competitive market price would be, then

An exclusive deal is

Which of the following would be considered open-access common property?

In the U.S., one example of a cartel that is legal is

The socially optimal amount of pollution is

Governments can eliminate market failure due to an imperfectly competitive market by

If a production process generates pollution, then a competitive market will produce more of the good than is socially optimal because

Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's Theorem, the optimal level of trash in the park can be achieved if

If a production process creates pollution, a competitive market produces excessive pollution because

What is one reason drunk driving is held in such disrepute?

One way to avoid the free rider problem is

A firm charging prices below marginal cost is said to be engaged in

An externality

Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's Theorem, the optimal level of trash in the park can be achieved if

The Commons Problem arises because

Consider a housing development built near an existing airport. After the houses are occupied, homeowners complain that the airport imposes a negative externality on them and it should be moved or otherwise limited. Is the airport a negative externality?

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Global Business

Filters

Exam 16: Government and Business

The song "Happy Birthday" is likely protected

Who said "If it moves, tax it. If it still moves, regulate it. If it stops moving, subsidize it."?

The exclusive privilege to use an asset is called a(n)

Which of the following is NOT a common property?

If the government regulates the price a monopoly can charge, and the price ceiling is set below what the competitive market price would be, then

An exclusive deal is

Which of the following would be considered open-access common property?

In the U.S., one example of a cartel that is legal is

The socially optimal amount of pollution is

Governments can eliminate market failure due to an imperfectly competitive market by

If a production process generates pollution, then a competitive market will produce more of the good than is socially optimal because

Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's Theorem, the optimal level of trash in the park can be achieved if

If a production process creates pollution, a competitive market produces excessive pollution because

What is one reason drunk driving is held in such disrepute?

One way to avoid the free rider problem is

A firm charging prices below marginal cost is said to be engaged in

An externality

Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's Theorem, the optimal level of trash in the park can be achieved if

The Commons Problem arises because

Consider a housing development built near an existing airport. After the houses are occupied, homeowners complain that the airport imposes a negative externality on them and it should be moved or otherwise limited. Is the airport a negative externality?

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Global Business

Filters