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Multiple Choice Quiz
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1
Consumers and producers use the environment as a dumping ground because
A)no one has property rights in the environment being polluted.
B)the environment being polluted is collectively consumed.
C)existing property rights are not enforced.
D)all of the above.
2
In the process of polluting the environment, polluters
A)impose externalities on others.
B)incur costs below what they would be in the absence of pollution.
C)overuse environmental services at the expense of others.
D)all of the above.
3
As the level of pollution control increases, marginal benefits
A)decline because total pollution is smaller and an additional unit of pollution control has less value.
B)decline because society values the additional unit of pollution more than the last unit.
C)rise because marginal costs increase as the level of pollution control increases.
D)rise because each additional unit of pollution control has more value.
4
As the level of pollution control increases, marginal costs
A)increase.
B)decrease at an increasing rate.
C)decrease at a decreasing rate.
D)remain constant.
5
A pollution control activity should be expanded until
A)the total benefits equal the total costs of the activity.
B)the marginal benefits equal the marginal costs of the activity.
C)pollution is eliminated.
D)the total benefits of the activity are maximized.
6
As additional units of pollution control are added, at some point each additional unit adds
A)less than the previous unit to total benefits.
B)more than the previous unit to total benefits.
C)less than the previous unit to total costs.
D)more to total benefits than to total costs in all cases.
7
An advantage of direct regulation as a method of controlling pollution is
A)the correct level of pollution can easily be determined.
B)pollution reduction quotas can be varied to remove pollution where it is least costly to do so.
C)emission control standards can be enforced readily.
D)it seems straightforward and fair.
8
The term "marginal social benefit" of an economic activity means
A)benefits that are just above the margin of being zero.
B)the entire benefits obtainable form the activity.
C)that part of the benefits covered by the costs of carrying on the activity.
D)the change in social benefits as a result of a 1 unit increase in the amount of the activity.
9
When MPC is less than MSC
A)the firm will tend to produce more than is socially optimal.
B)the price for the product will tend to be higher than the competitive price.
C)the firm must be a monopolist.
D)the firm will tend to produce less than is socially optimal.
10
The optimal level of pollution control is found when
A)MSB of control is equal to MSC.
B)pollution reaches the zero level.
C)MSB of control is just greater than MSC.
D)MSC of control is just greater than MSB.





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