Which of the following is NOT a way that governments require firms to take exter

ID: 1166549 • Letter: W

Question

Which of the following is NOT a way that governments require firms to take externalities into account?

Select one:

a. marketable permits for pollution

b. better defined property rights

c. command and control regulations

d. voluntary pollution cutbacks

In a market where there’s a negative externality associated with production we expect:

Select one:

a. Total production will occur at a level higher than the socially desirable level

b. Total production will occur at a level lower than the socially desirable level

c. Total production will occur at a level higher than the privately desirable level

d. Total production will occur at a level lower than the privately desirable level

What type of market is characterized by a large number of competing firms selling a differentiated product?

Select one:

a. Monopoly

b. Oligopoly

c. Perfect Competition

d. Monopolistic Competition

One difference between perfect competition and monopolistic competition is that:

Select one:

a. Only one involves a situation with many firms in the market

b. Only one involves a situation with many buyers in the market

c. In the long run only one involves the outcome where firms make zero economic profits

d. In one we consider production differentiation, in the other all products are identical

right answer is (D)

Government seeks to control through the permits and regulations. Voluntary pollution cutback is not part of government actions.

Right answer is ( a.) Total production will occur at a level higher than the socially desirable level

In case of negative externalities, firm tends to overproduce.

Right answer is (D) : Monopolistic Competition

Monopolistic competition is characterized by the presence of close substitute products.

Right answer is : d. In one we consider production differentiation, in the other all products are identical.

Products in competitive marker are identical and homogenous, while in monopolistic market, products are similar but not identical.

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