ECN 2110 Week 7 Quiz

ECN 2110 Week 7 Quiz | Baker College

Module 7A Quiz

 

Question 1

 

______________________ describes a situation where a third party, outside the transaction, suffers from a market transaction by others.

 

·         Negative externality

·         Positive externality

·         A spillover

·         A market failure

 

 

Question 2

 

Command-and-control regulation is a body of law that

 

·         fails to consider private costs of firms.

·         specifies allowable quantities of pollution.

·         details which pollution-control technologies must be used.

·         can include both b and c.

 

 

Question 3

 

Which of the following would be classified as a situation where a third-party benefits from a market transaction by others?

·         City buying 10,000 trees for green space renewal projects.

·         Increased levels of air pollution in neighborhoods near a football stadium.

·         Allowing a mining company to use a natural lake to discharge waste.

·         Two firms trading pollution credits to avoid cutting their toxic emissions.

 

 

Question 4

 

Because of the nature of the comprehensive environmental laws adopted during the late 1960s and early 1970s by the United States government, these laws are typically referred to as ______________________.

·         positive regulations

·         command and control regulations

·         control and command regulations

·         negative regulations

 

 

Question 5

 

The refundable charge of 5 or 10 cents for returning recyclable cans and bottles works like

 

·         an incentive to throw bottles and cans in the trash.

·         command-and-control regulation.

·         a market permit program.

·         a pollution tax incentive to avoid littering.

 

 

Question 6

 

A public good is a good that is _____________________, and thus is difficult for market producers to sell to individual consumers.

·         nonexcludable and nonrivalrous

·         excludable and rivalrous

·         unexcludable or unrivaled

 

 

Question 7

 

Which of the following would most likely be identified as being the ultimate goal of public policies that pertain to technology?

 

·         to help inventors earn higher rates of return

·         to help inventors earn reasonable returns

·         to encourage a stream of inventions that monetarily benefit the inventor.

·         to encourage a stream of invention that benefits the whole of society.

 

 

Question 8

 

Which of the following circumstances would encourage I’MaPharmaCo. to increase research and development activities?

 

·         cost of financial capital is high

·         patent term expires in 20 years Correct!

·         cost of financial capital is low

·         a low rate of return is likely

 

 

Question 9

 

Which of the following mechanisms will increase the rate of return that can be earned by inventors of new technology?

·         intellectual property rights

·         government research and development grants

·         cooperative research ventures between companies

·         patents, copyrights, and each of the above

 

 

Question 10

 

There is a skating rink in your city that is open to anybody to use at any time. They even provide skates for people who don't own any. This is an example of a good that is

·         rivalrous and nonexcludable

·         nonrivalrous and excludable

·         rivalrous and excludable

·         nonrivalrous and nonexcludable