Question 1
What is meant by msb?
A.
Benefit of consuming one extra unit. B.
Marginal social cost. C.
Marginal social benefit. D.
Cost of producing one extra unit.
Question 2
What is meant by third party?
A.
Marginal social cost. B.
When social costs/benefits differ from private costs/benefits. C.
Social benefit exceeds private benefit. D.
Affected without being part of transaction.
Question 3
What is meant by marginal cost (mc)?
A.
Private market produces wrong quantity. B.
Benefit of consuming one extra unit. C.
Marginal social cost. D.
Cost of producing one extra unit.
Question 4
Social optimum occurs where:
A.
MSB = MSC B.
Price = 0 C.
S only matters D.
Private cost = 0
Question 5
What is meant by externality?
A.
Social benefit exceeds private benefit. B.
When social costs/benefits differ from private costs/benefits. C.
Marginal social cost. D.
Cost of producing one extra unit.
Question 6
What is meant by marginal benefit (mb)?
A.
Cost of producing one extra unit. B.
Where MSB = MSC. C.
Benefit of consuming one extra unit. D.
Marginal social benefit.
Question 7
Negative externalities lead to:
A.
Overproduction B.
No government role C.
Perfect efficiency D.
Underproduction
Question 8
What is meant by market failure?
A.
Marginal social benefit. B.
Affected without being part of transaction. C.
Private market produces wrong quantity. D.
Social benefit exceeds private benefit.
Question 9
What is meant by socially optimum?
A.
Marginal social benefit. B.
Marginal social cost. C.
Social benefit exceeds private benefit. D.
Where MSB = MSC.
Question 10
What is meant by positive externality?
A.
Social benefit exceeds private benefit. B.
Benefit of consuming one extra unit. C.
Social cost exceeds private cost. D.
Where MSB = MSC.
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