Econ 402 Exam 2 UNH || A+ Graded Already.
Externality correct answers a benefit or cost that affects someone who is not directly involved in
the production or consumption of a good or service
Private Cost correct answers the cost borne by the producer of a good or service
Social Cost correct answers The total cost of producing a good or service, including both the
private cost and any external cost
Private Benefit correct answers the benefit received by the consumer of a good or service
Social Benefit correct answers The total benefit from consuming a good or service, including
both the private benefit and any external benefit.
Market Failure correct answers A situation in which the market fails to produce the efficient
level of output.
Property Rights correct answers The ability of an individual to own and exercise control over
scarce resources
Pigovian taxes and subsidies correct answers government taxes and subsidies intended to bring
about an efficient level of output in the presence of externalities
Command-and-control approach correct answers An approach that involves the government
imposing quantitative limits on the amount of pollution firms are allowed to emit or requiring
firms to install specific pollution control devices.
Private Goods correct answers Goods that are both excludable and rival in consumption
Rivalry correct answers The situation that occurs when one person's consuming a unit of a good
means no one else can consume it.
Excludability correct answers The situation in which anyone who does not pay for a good cannot
consume it.
Public Goods correct answers Goods that are neither excludable nor rival in consumption
Free riding correct answers Benefiting from a good without paying for it.
Common Resources correct answers Goods that are rival in consumption but not excludable
Tragedy of the commons correct answers The tendency for a common resource to be overused
Elasticity correct answers A measure of how much one economic variable responds to changes in
another economic variable.
Externality correct answers a benefit or cost that affects someone who is not directly involved in
the production or consumption of a good or service
Private Cost correct answers the cost borne by the producer of a good or service
Social Cost correct answers The total cost of producing a good or service, including both the
private cost and any external cost
Private Benefit correct answers the benefit received by the consumer of a good or service
Social Benefit correct answers The total benefit from consuming a good or service, including
both the private benefit and any external benefit.
Market Failure correct answers A situation in which the market fails to produce the efficient
level of output.
Property Rights correct answers The ability of an individual to own and exercise control over
scarce resources
Pigovian taxes and subsidies correct answers government taxes and subsidies intended to bring
about an efficient level of output in the presence of externalities
Command-and-control approach correct answers An approach that involves the government
imposing quantitative limits on the amount of pollution firms are allowed to emit or requiring
firms to install specific pollution control devices.
Private Goods correct answers Goods that are both excludable and rival in consumption
Rivalry correct answers The situation that occurs when one person's consuming a unit of a good
means no one else can consume it.
Excludability correct answers The situation in which anyone who does not pay for a good cannot
consume it.
Public Goods correct answers Goods that are neither excludable nor rival in consumption
Free riding correct answers Benefiting from a good without paying for it.
Common Resources correct answers Goods that are rival in consumption but not excludable
Tragedy of the commons correct answers The tendency for a common resource to be overused
Elasticity correct answers A measure of how much one economic variable responds to changes in
another economic variable.
