ECONOMICS 415CLICKER QUESTIONS

Chapter 3 – Question Set #1

A Pigouvian tax is a tax should be set equal to

1.th

e div

ergen

ce b

e...

2.th

e div

ergen

ce b

e...

3.th

e m

argi

nal b

enef

it...

4.n

one

of the

above

.

25% 25%25%25%1. the divergence between private and social benefits.

2. the divergence between private and social costs.

3. the marginal benefit associated with the good or service.

4. none of the above.0 of 30

According to the author, all of the following are drawbacks associated with the Coase Theorem except

1. t

rans

actio

ns c

ost ..

.

2. a

n effi

cien

t mar

ket..

.

3. i

nitia

l allo

catio

n of..

.

4. t

rans

actio

n co

sts

ar...

5. n

one o

f the

abo

ve.

20% 20% 20%20%20%1. transactions cost are not likely to

be small.

2. an efficient market cannot develop with asymmetric prices.

3. initial allocation of property rights will not effect the market solution.

4. transaction costs are likely to be positively correlated with the numbers of parties involved.

5. none of the above. 0 of 30