Economics MCQs

Page No. 231

Which of the following are potential solutions to the problem of air pollution?


a Grant right of the clean air to citizens so that firms must purchase the right to pollute

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bAuctions off pollution permits.

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c Auctions off pollution permits.

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dRegulate the amount of pollutants that firms can put in the air

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The Tragedy of the Commons is a parable that illustrates why?


acommon resources are overconsumed

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b public goods are underproduced

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cprivate goods are under consumed

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dnatural monopolies overproduce goods.

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When government employ cost-benefit analysis to help them decide whether to provide a public good, measuring benefits is difficult because ?


athere are no benefits to the public since a public good is not excludable

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bthe benefits are infinite because a public good is not rival and an infinite amount of people can consume it at the same time

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cone can never place a value on human life or the environment

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drespondents to naires have little incentive to tell the truth.

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Suppose that requiring motorcycle riders to wear helmets reduces the probability of a motorcycle fatality from 0.3 percent to 0.2 percent over the lifetime of a motorcycle rider and that the cost of lifetime supply of helmets is Rs5000. It is efficient for the government to require riders to wear helmets if human life is valued at ?


aRs 150 or more

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bRs 500,000 or more

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c Rs50,000 or more

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dRs500 or more

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View Answer Rs 500,000 or more

Which of the following is an example of a public good ?


ahot dogs at a picnic

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bWhales in the ocean

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cnational defense

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d apples on a tree in a public park

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View Answer national defense

Suppose each of 20 neighbours on street values street repairs at €3000 the cost of the street repair is €40,000 which of the following statements is true ?


a it is efficient for the government to tax the resident €2,000 each and repair the road

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bIt is efficient for each neighbour to pay €3,000 to repair the section of street in front of his/her home

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c None of these answers are true

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dit is not efficient to have the street repaired

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A common resource is ?


anot rival but excludable

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bboth rival and excludable

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crival but not excludable

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dneither rival nor excludable

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A private good is ?


a rival but not excludable

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bnot rival but excludable

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c both rival excludable

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dneither rival nor excludable

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If one person’s consumption of a good diminishes other people’s use of the good, the good is said to be ?


arival

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ba good produced by a natural monopoly

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ca common resource

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dexcludable

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View Answer rival

Unions tend to increase the disparity in pay between insiders and outsiders by ?


aincreasing the wage in the Unionized sector, Which may create a decrease in the supply of workers in the non-unionized sector

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bIncreasing the demand for workers in the Unionized sector

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cdecreasing the demand for workers in the Unionized sector

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d Increasing the wage in the Unionized sector which may create an increase in the supply of workers in the non-unionized sector

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