1.)Which of the following specifically refers to a situation where a third party, outside the transaction, suffers from a market transaction by others?
A.) Negative Externality
B.) Market Failure
C.) Spillover
D.) Positive Externality
2.) ______________ include both the private costs incurred by firms and also costs incurred by third parties outside the production process.
A. )Social costs
B.) Private costs
C.) Market costs
D.) External costs
3.) In the presence of a negative externality the free market does not produce the efficient outcome. Economists refer to this situation as a __________ .
A.) Non-optimum outcome
B.) Market failure
C.) Pollution
D.) Inefficient equilibrium
4.) California’s Smog Check program which requires cars to emit under a stated quantity of pollutants is an example of which of the following regulations?
A.) Better-Defined Property Rights
B.) Marketable Permits
C.) Pollution Charges
D.) Command and Control
