1. Which of the following is an example of a common property resource? a) A rive

ID: 1108087 • Letter: 1

Question

1. Which of the following is an example of a common property resource?

a) A river

b) Bubble gum

c) Cable television

d) A laptop computer

2. A competitive market will NOT result in a price and output that maximizes social welfare when:

a) the product or service in question is a pure private good.

b) the production or consumption of the good or service creates no positive externalities.

c) the production or consumption of the good or service creates no negative externalities.

d) the product or service in question is a common property resource.

3. A demand curve that incorporates only the private benefits of consumption when positive externalities exist would:

a) lie below and to the left of the demand curve that incorporates both the private and social benefits.

b) lie above and to the right of the demand curve that incorporates both the private and social benefits.

c) be steeper than a demand curve that incorporates both the private and social benefits.

d) be flatter than a demand curve that incorporates both the private and social benefits.

4. Which of the following is a market-based environmental policy?

a) Issuing a limited number of air pollution permits and allowing firms to buy and sell the limited number of permits from one another

b) Banning all water pollution in a particular area

c) Fining a company for emitting more effluent than is permitted by law

d) A regulation that holds a firm accountable for disposal of its hazardous waste

A) a river

As, it could be used by anyone unlike other things.

B) a) the product or service in question is a pure private good

d) be flatter than a demand curve that incorporates both the private and social benefits.

a) Issuing a limited number of air pollution permits and allowing firms to buy and sell the limited number of permits from one another

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