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Bobby’s neighbor is growing a tree that is blocking Bobby’s ocean view. Bobby is

 Bobby’s neighbor is growing a tree that is blocking Bobby’s ocean view. Bobby is
                            considering taking his neighbor to court. To Bobby, the tree represents a(n)

a.unclear property right

b.public good

c.free-rider good

d.positive externality

e.negative externality

72.              Which of the following is not an example of an externality?

a.Drunk drivers raise everyone’s auto insurance premiums.

b.The price of lumber increases as lumberjacks’ wages increase.

c.The neighbor’s beautiful front yard increases your home value.

d.Someone drives a car that emits thick black smoke.

e.People who live near a bakery enjoy the smell of freshly baked bread.

73.              Third-party beneficiaries are called

a.polluters

b.indirect property owners

c.free riders

d.recipients of efficient market outcomes

e.consumer surplus losers

74.              Pete throws leftover bread onto his front lawn because he enjoys watching the pigeons
                            feeding. His neighbor John is not happy about the pigeons, since they leave a mess on his
                            property. This is an example of a nice gesture causing a

a.negative externality

b.public good

c.positive externaility

d.third-party benefit

e.free-rider outcome

75.              Dina drives to work on Interstate 294 at 90 MPH, well in excess of the 65 MPH speed
                            limit. Sandy is behind her, going 85 MPH. A state trooper pulls Dina over and gives her a
                            speeding ticket. Sandy continues driving. If Dina had not been speeding, the trooper
                            would have ticketed Sandy. In terms of externalities, this story shows that

a.the 10 MPH difference defines the difference bewteen a negative and positive
externality

b.Sandy enjoys a positive externality

c.Dina suffers a negative externality

d.Dina’s driving habits created a negative externality for Sandy

e.Sandy’s driving habits created a negative externality for Dina

76.              If it costs $2,000 to pick up all the litter along a 100-mile stretch of highway, then the
                            cost of the negative externality associated with the litter is

a.$0

b.more than $0, but less than $2,000

c.$2,000

d.more than $2,000, but finite

e.infinite

77.              Tammy installed a set of wind chimes in her backyard. She enjoys listening to the
                            musical tones when the breeze hits them. Her neighbor Steven also enjoys the chimes, but
                            her other neighbor Sally hates the constant noise. Tammy’s wind chimes

a.create a negative externality for Steven and a positive externality for Sally

b.are not related to the issue of property rights since all parties are homeowners

c.are an example of an efficient market since the benefits to one party are balanced by
costs to another party

d.are a public good because all three parties can hear the wind chimes

e.create a positive externality for Steven and a negative externality for Sally

78.              John paints the exterior of his house and, as a result, his neighbor Christine is able to sell
                            her home for $5,000 more than she could have before. John’s house painting

a.creates a negative externality for Christine

b.makes John a free rider

c.results in an efficient market outcome for both parties since both benefit

d.creates a positive externality for Christine

e.was poorly done

79.              When property rights are poorly defined,

a.positive or negative externalities may result

b.the market cannot generate an equilibrium price

c.the market price becomes highly unstable

d.the market must be relied upon to generate efficient allocation of resources

e.no externalities can exist

80.              The market’s allocation of resources is

a.inefficient whenever the government intervenes

b.efficient regardless of whether externalities exist

c.efficient only when externalities exist

d.inefficient whenever externalities are present

e.dependent upon externalities

Dec 11 2019 View more View Less

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