Exam 13: Markets and Government

The figure given below shows the demand and supply curves of automobiles.Figure 13.3 In the figure, D: Demand curve of automobiles S: Supply of automobiles prior to the tax S+t: Supply of automobiles after the tax -The Clean Air Act of 1972 required some companies to install the "best available" pollution control technologies. This is an example of:

-In order to reduce the possibility of adverse selection, banks should raise the interest rates charged on loans.

-A pollution tax has the effect of reducing the costs of production for a firm, leading to a rightward shift of the supply curve.

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2 -Which of the following is an example of a positive externality?

Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.Table 13.2 -If education has positive externalities, _____.

Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.Table 13.2 -Refer to Table 13.2. Suppose fish sells for $1 per pound. What is the amount of total profit earned when the fishermen use the socially optimal number of boats?

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2 -When all the costs and benefits of a transaction are borne by the participants of that transaction, _____.

The following table shows the costs and benefit of producing a commodity.Table 13.1 -According to Table 13.1, the external cost of producing 5 units of output is:

The following table shows the costs and benefit of producing a commodity.Table 13.1 -According to Table 13.1, at the free market equilibrium:

The following table shows the costs and benefit of producing a commodity.Table 13.1 -One reason that some whales were hunted close to extinction is that no one can claim ownership of a whale until it is killed. If property rights to the whale population were established:

-Refer to Figure 13.4. Suppose the government wishes to reduce pollution to a quantity of Q_b. If it sells marketable pollution permits for a pollution quantity of Q_b, then:

The figure given below shows the demand and supply curves of automobiles.Figure 13.3 In the figure, D: Demand curve of automobiles S: Supply of automobiles prior to the tax S+t: Supply of automobiles after the tax -When the government tries to control pollution through cap and trade, it _____.

-When consumers or producers do not bear the full cost of their economic decisions, they tend to produce or consume more than they otherwise would.

-It is often impossible for a business firm to determine its private costs of production.

-Which of the following is a measure taken by the government to internalize externalities?

-​The QWERTY story illustrates:

-To minimize the asymmetric information problem, the government is called on to require and enforce full disclosure of information.

-When a good is subsidized by the government, the amount of the good produced or consumed declines.

-Moral hazard is the term used to describe the situation in which:

Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.Table 13.2 -The commons problem refers to: