NSC EXAM 3 EXAM WITH CORRECT
QUESTIONS AND ANSWERS 2026
People engage in optimization, which is doing the best one can with available
resources - CORRECT ANSWERSTrue
What is an externality in a market? - CORRECT ANSWERSAll of the costs and
benefits of production of a good are not internalized in the price
What is not an example of a market failure? - CORRECT ANSWERSTaxes
What is the law of demand? - CORRECT ANSWERSWhen the price of a good
rises, the quantity demanded will decline
What is the primary disadvantage of a Pigovian tax? - CORRECT ANSWERSIt
reduces the quantity produced of the agricultural 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
ANSWERSFalse
What kind of tax is implemented to achieve specific environmental, social, or
economic goals that are hampered by externalities? - CORRECT
ANSWERSPigovian Tax
, What is an example of a positive externality? - CORRECT ANSWERSEcosystem
Services of Agriculture
What term describes a market in which there are many buyers but only one
seller? - CORRECT ANSWERSMonopoly
Why have corn prices risen in recent years? - CORRECT ANSWERSThere has
been a demand expansion for corn due to quota set by the ethanol industry.
Policy, or institutional rules, have little influence over human behavior. -
CORRECT ANSWERSFasle
Appropriation Bill - CORRECT ANSWERSBills passed annually to allocate federal
funds for specific programs
Authorizing Legislation - CORRECT ANSWERSBills creating new programs or
extending or repealing old ones
Entitlement Programs - CORRECT ANSWERSProvide benefits to all persons who
meet eligibility requirements
What is pre-emption? - CORRECT ANSWERSLimitation by a higher level of
government on what actions can be taken by a lower level of government
What is the role of special interest groups in policy? - CORRECT ANSWERSThey
are groups of people who share the same interests, and work to influence the
legislative process and other aspects of policymaking.
QUESTIONS AND ANSWERS 2026
People engage in optimization, which is doing the best one can with available
resources - CORRECT ANSWERSTrue
What is an externality in a market? - CORRECT ANSWERSAll of the costs and
benefits of production of a good are not internalized in the price
What is not an example of a market failure? - CORRECT ANSWERSTaxes
What is the law of demand? - CORRECT ANSWERSWhen the price of a good
rises, the quantity demanded will decline
What is the primary disadvantage of a Pigovian tax? - CORRECT ANSWERSIt
reduces the quantity produced of the agricultural 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
ANSWERSFalse
What kind of tax is implemented to achieve specific environmental, social, or
economic goals that are hampered by externalities? - CORRECT
ANSWERSPigovian Tax
, What is an example of a positive externality? - CORRECT ANSWERSEcosystem
Services of Agriculture
What term describes a market in which there are many buyers but only one
seller? - CORRECT ANSWERSMonopoly
Why have corn prices risen in recent years? - CORRECT ANSWERSThere has
been a demand expansion for corn due to quota set by the ethanol industry.
Policy, or institutional rules, have little influence over human behavior. -
CORRECT ANSWERSFasle
Appropriation Bill - CORRECT ANSWERSBills passed annually to allocate federal
funds for specific programs
Authorizing Legislation - CORRECT ANSWERSBills creating new programs or
extending or repealing old ones
Entitlement Programs - CORRECT ANSWERSProvide benefits to all persons who
meet eligibility requirements
What is pre-emption? - CORRECT ANSWERSLimitation by a higher level of
government on what actions can be taken by a lower level of government
What is the role of special interest groups in policy? - CORRECT ANSWERSThey
are groups of people who share the same interests, and work to influence the
legislative process and other aspects of policymaking.
