Question 1

Environmental CSR that is undertaken to reduce negative externalities might be

Accepted Answer

A) altruistic. 
B) strategic. 
C) undertaken because of Internet-based scrutiny. 
D) All of the above. 
A) altruistic. 
B) strategic. 
C) undertaken because of Internet-based scrutiny. 
D) All of the above.

Question 2

In general, an externality is created when

Accepted Answer

A) people are affected (other than by price)by a transaction which they were not part of. 
B) firms produce a product of low quality and consumers don't like it. 
C) firms have to pay for pollution the environment. 
D) the government subsidizes education. 
A) people are affected (other than by price)by a transaction which they were not part of. 
B) firms produce a product of low quality and consumers don't like it. 
C) firms have to pay for pollution the environment. 
D) the government subsidizes education.

Question 3

Reparations for slavery in the United States would

Accepted Answer

A) be consistent with the Pareto principle. 
B) be inconsistent with the Pareto principle. 
C) have nothing to do with the Pareto principle. 
D) would be unconstitutional. 
A) be consistent with the Pareto principle. 
B) be inconsistent with the Pareto principle. 
C) have nothing to do with the Pareto principle. 
D) would be unconstitutional.

Question 4

When attempting price regulation a government faces what problem(s)?

Accepted Answer

A) limited information 
B) bribes 
C) uncooperative firms 
D) All of the above. 
A) limited information 
B) bribes 
C) uncooperative firms 
D) All of the above.

Question 5

Regulation might NOT increase total surplus because

Accepted Answer

A) the costs of the regulation might outweigh the benefits. 
B) it may not be possible to gather the information necessary to set prices correctly. 
C) regulators might get captured by the industry. 
D) All of the above. 
A) the costs of the regulation might outweigh the benefits. 
B) it may not be possible to gather the information necessary to set prices correctly. 
C) regulators might get captured by the industry. 
D) All of the above.

Question 6

In the presence of no externalities

Accepted Answer

A) social marginal cost exceeds private marginal cost. 
B) social marginal cost is less than private marginal cost. 
C) social marginal cost equals private marginal cost. 
D) social marginal cost and private marginal cost cannot be compared. 
A) social marginal cost exceeds private marginal cost. 
B) social marginal cost is less than private marginal cost. 
C) social marginal cost equals private marginal cost. 
D) social marginal cost and private marginal cost cannot be compared.

Question 7

A patent is a property right, which gives the owner

Accepted Answer

A) the right to sell and/or license the invention. 
B) the ability to make the knowledge of how to make the invention rival. 
C) a guaranteed profit. 
D) All of the above. 
A) the right to sell and/or license the invention. 
B) the ability to make the knowledge of how to make the invention rival. 
C) a guaranteed profit. 
D) All of the above.

Question 8

The price of pie increases. Some people who purchased pie before the price increase no longer purchase pie. This is

Accepted Answer

A) a positive externality. 
B) a negative externality. 
C) a positive externality for some consumers and a negative externality for others. 
D) not an externality. 
A) a positive externality. 
B) a negative externality. 
C) a positive externality for some consumers and a negative externality for others. 
D) not an externality.

Question 9

In a market with positive externalities

Accepted Answer

A) the efficient level of production is less than what competition will obtain. 
B) the efficient level of production is equal to what competition will obtain. 
C) the efficient level of production is more than what competition will obtain. 
D) there cannot be an efficient level of production. 
A) the efficient level of production is less than what competition will obtain. 
B) the efficient level of production is equal to what competition will obtain. 
C) the efficient level of production is more than what competition will obtain. 
D) there cannot be an efficient level of production.

Question 10

Intellectual property

Accepted Answer

A) increases total surplus. 
B) prevents people who do not own the knowledge from using it. 
C) assigns property rights to knowledge. 
D) eliminates the free rider problem. 
A) increases total surplus. 
B) prevents people who do not own the knowledge from using it. 
C) assigns property rights to knowledge. 
D) eliminates the free rider problem.

Question 11

Resale price maintenance

Accepted Answer

A) requires a retailer to sell a good no lower than the specified price. 
B) is illegal. 
C) is the price of a maintenance contract on a good, such as an extended service contract on a car. 
D) has a net negative impact on competition. 
A) requires a retailer to sell a good no lower than the specified price. 
B) is illegal. 
C) is the price of a maintenance contract on a good, such as an extended service contract on a car. 
D) has a net negative impact on competition.

Question 12

In order to regulate a monopoly's price the government

Accepted Answer

A) needs to hire former executives from the monopoly. 
B) should rely on industry experts for information. 
C) needs accurate information on the monopoly's demand and cost curves. 
D) needs to know the monopoly's supply curve. 
A) needs to hire former executives from the monopoly. 
B) should rely on industry experts for information. 
C) needs accurate information on the monopoly's demand and cost curves. 
D) needs to know the monopoly's supply curve.

Question 13

To alleviate the commons problem, the government can

Accepted Answer

A) apply a tax. 
B) set a quota. 
C) assign property rights. 
D) All of the above. 
A) apply a tax. 
B) set a quota. 
C) assign property rights. 
D) All of the above.

Question 14

Patents

Accepted Answer

A) always increase total welfare. 
B) create monopoly power. 
C) reduce deadweight loss. 
D) are a form of trade secret. 
A) always increase total welfare. 
B) create monopoly power. 
C) reduce deadweight loss. 
D) are a form of trade secret.

Question 15

A common resource is best described as a resource where

Accepted Answer

A) there is a positive externality in consumption. 
B) there is a negative externality in consumption. 
C) there is a positive externality in production. 
D) there is a negative externality in production. 
A) there is a positive externality in consumption. 
B) there is a negative externality in consumption. 
C) there is a positive externality in production. 
D) there is a negative externality in production.

Question 16

One way for the government to eliminate a negative externality is to

Accepted Answer

A) charge an emissions fee. 
B) set an emissions standard. 
C) levy an effluent charge. 
D) All of the above. 
A) charge an emissions fee. 
B) set an emissions standard. 
C) levy an effluent charge. 
D) All of the above.

Question 17

Optimal price regulation sets price equal to

Accepted Answer

A) marginal cost. 
B) average variable cost. 
C) average cost. 
D) minimum average cost. 
A) marginal cost. 
B) average variable cost. 
C) average cost. 
D) minimum average cost.

Question 18

Which of the following statements is TRUE?

Accepted Answer

A) A government policy that eliminates a market failure, but only some people gain while others are kept the same, is not a Pareto improvement. 
B) A government policy that eliminates a market failure, but only some people gain while others are kept the same, is a Pareto improvement. 
C) A government policy that eliminates a market failure and some people gain and some lose only a little, is a Pareto improvement. 
D) A government policy that generates a Pareto improvement eliminates all deadweight loss. 
A) A government policy that eliminates a market failure, but only some people gain while others are kept the same, is not a Pareto improvement. 
B) A government policy that eliminates a market failure, but only some people gain while others are kept the same, is a Pareto improvement. 
C) A government policy that eliminates a market failure and some people gain and some lose only a little, is a Pareto improvement. 
D) A government policy that generates a Pareto improvement eliminates all deadweight loss.

Question 19

According to the cost-benefit principle if a change generates $50,000 in gains and $45,000 in losses,

Accepted Answer

A) it is desirable. 
B) the gain is not large enough to justify the change. 
C) the desirability depends on who gains and who loses. 
D) it is a Pareto improvement. 
A) it is desirable. 
B) the gain is not large enough to justify the change. 
C) the desirability depends on who gains and who loses. 
D) it is a Pareto improvement.

Question 20

According to the U.S. Robinson-Patman Act of 1936, price discrimination

Accepted Answer

A) is always illegal. 
B) is legal unless it harms competition. 
C) may be used to drive rivals out of business. 
D) can only be justified if the price discrimination is due to actual cost differences. 
A) is always illegal. 
B) is legal unless it harms competition. 
C) may be used to drive rivals out of business. 
D) can only be justified if the price discrimination is due to actual cost differences.

Environmental CSR that is undertaken to reduce negative externalities might be

In general, an externality is created when

Reparations for slavery in the United States would

When attempting price regulation a government faces what problem(s)?

Regulation might NOT increase total surplus because

In the presence of no externalities

A patent is a property right, which gives the owner

The price of pie increases. Some people who purchased pie before the price increase no longer purchase pie. This is

In a market with positive externalities

Intellectual property

Resale price maintenance

In order to regulate a monopoly's price the government

To alleviate the commons problem, the government can

Patents

A common resource is best described as a resource where

One way for the government to eliminate a negative externality is to

Optimal price regulation sets price equal to

Which of the following statements is TRUE?

According to the cost-benefit principle if a change generates $50,000 in gains and $45,000 in losses,

According to the U.S. Robinson-Patman Act of 1936, price discrimination

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

Environmental CSR that is undertaken to reduce negative externalities might be

In general, an externality is created when

Reparations for slavery in the United States would

When attempting price regulation a government faces what problem(s)?

Regulation might NOT increase total surplus because

In the presence of no externalities

A patent is a property right, which gives the owner

The price of pie increases. Some people who purchased pie before the price increase no longer purchase pie. This is

In a market with positive externalities

Intellectual property

Resale price maintenance

In order to regulate a monopoly's price the government

To alleviate the commons problem, the government can

Patents

A common resource is best described as a resource where

One way for the government to eliminate a negative externality is to

Optimal price regulation sets price equal to

Which of the following statements is TRUE?

According to the cost-benefit principle if a change generates $50,000 in gains and $45,000 in losses,

According to the U.S. Robinson-Patman Act of 1936, price discrimination

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