NSC 150 Exam 2 fully solved

NSC 150 Exam 2People engage in optimization, which is doing the best one can with available resources. - correct answer True What is an externality in a market? - correct answer All of the costs and benefits of production of a good are not internalized in the price. What is an example of a market failure? - correct answer Taxes What is the law of demand? - correct answer When the price of a good rises, the quantity demanded will decline. Whats the primary disadvantage of a Pigovian tax? - correct answer it reduces the quantity produced of the agriculture good. In a cap-and-trade system, industry groups set standards on pollution in a particular industrial sector, which can be bought and sold. - correct answer false What kind of tax is implemented to achieve specific environmental, social, or economical goals that are hampered by externalities? - correct answer Pigovian tax Whats an example of a positive externality? - correct answer Ecosystem services of agriculture What term describes a market in which there are many buyers but only one seller? - correct answer Monopoly Why have corn prices in recent years? - correct answer There has been a demand expansion for corn due to quota by the ethanol industry.