文档介绍：442vChapter 10/Externalities
Chapter 10/Externalitiesv 443
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Chapter 10
Externalities
Multiple Choice
1. In a market economy, government intervention
a. will always improve market outes.
b. reduces efficiency in the presence of externalities.
c. may improve market outes in the presence of externalities.
d. is necessary to control individual greed.
ANS: C PTS: 1 DIF: 1 REF: 10-0
TOP: Externalities MSC: Applicative
2. In the absence of externalities, the "invisible hand" leads a market to maximize
a. producer profit from that market.
b. total benefit to society from that market.
c. both equity and efficiency in that market.
d. output of goods or services in that market.
ANS: B PTS: 1 DIF: 1 REF: 10-0
TOP: Externalities MSC: Applicative
3. One advantage market economies have over other types of economies is that market economies
a. provide an equal distribution of goods and services to consumers.
b. establish government economic control.
c. solve the problem of scarcity.
d. are more efficient.
ANS: D PTS: 1 DIF: 1 REF: 10-0
TOP: Externalities MSC: Applicative
4. The term market failure refers to
a. a market that fails to allocate resources efficiently.
b. an unsuccessful advertising campaign which reduces demand.
c. ruthless petition among firms.
d. a firm that is forced out of business because of losses.
ANS: A PTS: 1 DIF: 1 REF: 10-0
TOP: Externalities MSC: Definitional
5. Market failure can be caused by
a. too much petition.
b. externalities.
c. low consumer demand.
d. scarcity.
ANS: B PTS: 1 DIF: 1 REF: 10-0
TOP: Externalities MSC: Interpretive
390vChapter 10/Externalities
Chapter 10/Externalitiesv 443
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6. An externality is the impact of
a. society's decisions on the well-being of society.
b. a person's actions on that person's well-being.
c. one person's actions on the well-being of a bystander.
d. society's decisions on the poorest person in the society.
ANS: C PTS: 1 DIF: 1 REF: 10-0
TOP: Externalitie