HCAD 4354 FINAL EXAM STUDY SET
Externalities arise on the demand-side of a market. - Correct Answers -Which of the
following could occur if the social costs and benefits of a consumption activity are not
fully internalized by the participants directly involved in the exchange?
Negative supply side externality. - Correct Answers -Acid rain is an example of what
type of externality?
Taxes; subsidies - Correct Answers -By using ___________ and _____________,
Government can alter economic incentives and correct the unconstrained tendency of
the market to misallocate society's resources when externalities are present.
All the answers are correct. - Correct Answers -When does the presence of an
externality not require government intervention?
Price ceiling - Correct Answers -Which of the following describes when government
regulates the price by establishing a maximum price or reimbursement level?
Be lower than the market equilibrium price. - Correct Answers -An effective price ceiling
should
The Sherman antitrust act of 1980 - Correct Answers -Which of the following antitrust
laws has been interpreted as prohibiting anti-competitive business practices, such as
price-fixing, boycotting, market allocations, and mergers that promote inefficiencies in
the marketplace?
Exclusive dealing contract - Correct Answers -Which of the following describes when a
manufacture allows only one distributor to sell its product or products in the market
area?
A supply-side subsidy - Correct Answers -___________ is essentially a grant of money
from a third-party that is aimed at reducing the internal cost of producing some
consumer-oriented good or service.
Government redistribution scheme by taxation is better than government subsidy -
Correct Answers -Which of the following statement is incorrect about government
redistribution skiing by taxation?
Externalities arise on the demand-side of a market. - Correct Answers -Which of the
following could occur if the social costs and benefits of a consumption activity are not
fully internalized by the participants directly involved in the exchange?
Negative supply side externality. - Correct Answers -Acid rain is an example of what
type of externality?
Taxes; subsidies - Correct Answers -By using ___________ and _____________,
Government can alter economic incentives and correct the unconstrained tendency of
the market to misallocate society's resources when externalities are present.
All the answers are correct. - Correct Answers -When does the presence of an
externality not require government intervention?
Price ceiling - Correct Answers -Which of the following describes when government
regulates the price by establishing a maximum price or reimbursement level?
Be lower than the market equilibrium price. - Correct Answers -An effective price ceiling
should
The Sherman antitrust act of 1980 - Correct Answers -Which of the following antitrust
laws has been interpreted as prohibiting anti-competitive business practices, such as
price-fixing, boycotting, market allocations, and mergers that promote inefficiencies in
the marketplace?
Exclusive dealing contract - Correct Answers -Which of the following describes when a
manufacture allows only one distributor to sell its product or products in the market
area?
A supply-side subsidy - Correct Answers -___________ is essentially a grant of money
from a third-party that is aimed at reducing the internal cost of producing some
consumer-oriented good or service.
Government redistribution scheme by taxation is better than government subsidy -
Correct Answers -Which of the following statement is incorrect about government
redistribution skiing by taxation?
