Questions:
Question 1
A tax imposed on imports is called:
A tariff
A quota
A comparative advantage
An excise tax
Question 2
This result proposes that private parties (consumers and producers) can solve the problem of externalities on their own.
A tariff
Scarce Theorem
Social Optimum Theorem
Coase Theorem
Question 3
Two important characteristics of a public good are:
Non-excludable and non-rival in consumption
Excludable but non-rival in consumption
Non-excludable but rival in consumption
excludable and rival in consumption
Question 4
The Tragedy of The Commons is a parable that illustrates:
resources commonly owned are used more than is desirable
resources that are privately owned are used efficiently
resources that are owned by the government are more efficiently used
resources that are privately owned are used more than desirable
Question 5
The impact of one person's actions on the well-being of a bystander is called a(n):
Supply
Market
Externality
Property Rights
Question 6
What criterion could you use to determine whether a small country named "Isoland" is a net importer of oil?
The world price is below the domestic price in Isoland
The world price is above the domestic price in Isoland
The world price equals the domestic price in Isoland
THe world price fluctuates above and below the domestic price in Isoland
Question 7
For a net importer country, a tax on imports causes:
more imports and gains in total surplus
more imports and loss of total surplus
less imports and loss of total surplus
less imports and gains in total surplus
Question 8
If you as an economic adviser recommend the government of Isoland (a small country) to allow free trade and steel to be imported from other countries, the steel industry at Isoland most likely will oppose your decision arguing:
trade destroys domestic jobs
steel is used to produce guns and tanks, therefore it is a threat to national security to allow imports from other countries
other countries that export to us are subsidizing their own industry and Isoland does not
any of the above
Question 9
Which one below applies to an industry that produces a negative externality?
the social cost and private cost are the same
the social cost exceeds the private cost
the private cost exceeds the social cost
the social cost is unrelated to the private cost
Question 10
What explains that marginal cost increases as production of a product increases?
inreasing cost law
decreasing average cost property
diminishing marginal product property
law of increasing marginals