ECO 405 Week 4 Quiz – Strayer

ECO/405 Week 4 Quiz – Strayer

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Chapter 04

Pollution Problems: Must We Foul Our Own Nests?

Multiple Choice Questions

1. Pollution
A. Like Air And Water Pollution Became An Issue In The U.S. During The 1960’s
B. Tends To Be Worse In More Populated Than In Less Populated Areas
C. Occurs Because Large Portions Of The Environment Are Owned By Polluters
D. Increases The Cost Of Producing All Goods
E. Issues Are Represented In All Of The Above Answers

2. The Level Of Pollution Increases When
A. A Person Breathes
B. Wastes Are Dumped Into The Environment
C. Wastes Are Dumped Into The Environment At A Higher Rate Than Wastes Are Recycled
D. New Industrial Plant Opens
E. Recycling Increases

3. Which Of The Following Is A Service Provided By The Environment?
A. Use As A Habitat
B. Provision Of Amenities
C. Provision Of Raw Materials
D. Waste Disposal
E. All Of The Above

4. Which Of The Following Best Describes Why Pollution Exists In The Environment?
A. The Environment Has No Capacity To Recycle Waste
B. All Materials Take A Very Long Time To Recycle In The Environment
C. No Waste Can Be Completely Recycled
D. Recycling Processes Fail To Prevent Wastes From Accumulating In The Environment
E. The Environment’s Capacity To Recycle Exceeds The Rate Of Waste Disposal

5. Human Production Processes Do Not Include Which Of The Following Services?
A. Mineral Deposits, Such As Coal And Iron
B. Renewable Resources, Like Timber And Plant Products
C. Technological Advances In Production
D. Recycling Of Waste Materials, Such As Chemical Wastes
E. All Of The Above

6. Marginal Private Cost (Mpc) Always Includes:
A. The Price Of A Good In The Market
B. The Extra Costs Of Production Of One More Unit Of A Good
C. The Additional Benefits Received By Consumers From The Consumption Of The Good
D. The Costs Imposed On Society From Pollution
E. The Expenditures By Government To Control Negative Externalities

7. The Term “Marginal Social Benefit” Means
A. Benefits That Are Just Above The Margin Of Being Zero
B. The Entire Benefits Obtainable From The Activity
C. That Part Of The Benefits Covered By The Costs Of Carrying On The Activity
D. The Change In Total Social Benefits Per Unit Change In The Amount Of The Activity
E. The Benefits Of Minimal Quality Goods And Services

8. If All Benefits From Consuming A Good Go To Consumers, The Demand Curve Is The Same As The
A. Mpc Curve
B. Msc Curve
C. Mpb Curve
D. Supply Curve
E. Benefit Curve

9. When There Are No Externalities, Equilibrium In A Market
A. Maximizes Social Well-Being
B. Equates Quantity Supplied And Quantity Demanded
C. Equates Msb And Msc
D. Equates Mpb And Mpc
E. Does All Of The Above

10. When The Cost Of An Action Falls On Other Than The Person (Or Persons) Responsible For The Action, Which Of The Following Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost

11. When A Benefit Of An Action Falls On Other Than The Person (Or Persons) Responsible For The Action, Which Of The Following Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost

12. When The Marginal Private Benefit Of An Activity Does Not Equal The Marginal Social Benefit, Which Of The Following Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost

13. When The Marginal Private Cost Of An Activity Does Not Equal The Marginal Social Cost, Which Of The Following Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost

14. Which Of The Following Creates A Positive Externality In Consumption?
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining

15. Which Of The Following Creates A Positive Externality In Production?
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining

16. Which Of The Following Creates A Negative Externality In Consumption?
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining

17. People Have An Incentive To Pollute When
A. There Is Collective Consumption Of An Environmental Service
B. No One Has Property Rights To The Environment
C. It Is Less Expensive To Pollute Than To Clean Up
D. The Mpc Of Polluting < Mpc Of Cleanup
E. All Of The Above

18. As Additional Units Of Pollution Control Are Added, At Some Point Each Additional Unit Adds
A. Less Than The Previous Unit To Total Benefits
B. More Than The Previous Unit To Total Benefits
C. Less Than The Previous Unit To Total Costs
D. More To Total Benefits Than To Total Costs
E. Less To Total Costs Than Total Benefits

19. When Mpc Is Less Than Msc,
A. Firms Will Tend To Produce More Than Is Socially Optimal
B. The Price Of The Product Will Be Higher Than The Competitive Price
C. The Firm Must Be A Monopolist
D. The Firm Will Produce Less Than Is Socially Optimal
E. There Are Positive Externalities In Production

20. Complete Elimination Of Pollution Is Economically Rational When
A. Pollution Is Associated With Illness In Humans
B. For Each Unit Of Pollution, The Cost Of Clean-Up Is Less Than The Benefit From Its Elimination
C. The Pollution Will Likely Affect Future Generations
D. Msc Of Cleanup < Msb Of Cleanup E. None Of The Above; Complete Elimination Is Never Rational 21. Pollution Should Be Completely Eliminated A. When The Marginal Social Benefit Of Control Is Greater Than Or Equal To The Marginal Social Cost Of Control For All Units Of Pollution B. When The Marginal Social Cost Of Control Is Zero C. At No Time, From An Economic Perspective D. All Of The Above E. (A) And (B) 22. The Optimal Level Of Pollution Control Occurs When A. Msb Of Control Equals Msc B. Pollution Is Zero C. Msb Of Control Just Exceeds Msc D. Msb Of Control Is Less Than Msc E. None Of The Above 23. The Market Output Level Tends To Be Socially Optimal When A. Demand Equals Supply In The Market B. All Costs And Benefits Are Private And Msb=Msc C. There Is Neither A Shortage Nor A Surplus Of The Product D. There Are Externalities In Production E. There Are Externalities In Consumption 24. Costs Incurred By The Producer For The Use Of Self-Owned Resources Are Called A. Implicit Costs B. Explicit Costs C. Accounting Costs D. Total Costs E. Marginal Costs 25. Costs Incurred By The Producer To Buy Or Hire Resources Are Called A. Implicit Costs B. Explicit Costs C. Opportunity Costs D. Total Costs E. Marginal Costs 26. Another Term For Implicit Cost Is A. Out-Of-Pocket Costs B. Explicit Costs C. Opportunity Cost D. Total Cost E. Marginal Cost 27. Payment By A Firm To Hire A Worker Is An Example Of A(N) A. Implicit Cost B. Explicit Cost C. Opportunity Cost D. Total Cost E. Marginal Cost 28. An Upstream Paper Mill Pollutes Water Used By A Downstream Water Bottling Plant, Forcing The Latter To Clean The Water It Uses. Which Of The Following Is ? A. Both Will Over-Produce B. The Paper Mill Will Under-Produce And The Bottling Plant Will Over-Produce C. The Paper Mill Will Over-Produce And The Bottling Plant Will Under-Produce D. Both Will Under-Produce E. Neither Will Over-Produce Or Under-Produce 29. Which Of The Following Is A Factor Leading To Pollution? A. People Are Inherently Dirty B. There Are Property Rights To The Environment C. The Environment Is Collectively Consumed D. The Law Of Increasing Returns E. All Of The Above Questions 30 – 34 Refer To The Graph Below. 30. Given The Ppc Tt1, The Cost Of Increasing Pollution Control From C1 To C2 Is A. A1a2 Dollars’ Worth Of Other Goods And Services B. Q1q2 Dollars’ Worth Of Other Goods And Services C. C1c2 Dollars’ Worth Of Pollution Control D. Tq1, Dollars’ Worth Of Other Goods And Services E. Unable To Be Determined Without Additional Information 31. Which Of The Following Could Explain A Shift In The Production Possibilities Curve From Tt1 To Tt2? A. Over-Utilization Of Pollution Control Activities B. Better Techniques Of Pollution Control C. Higher Prices For Other Goods And Services D. Increased Benefits From Pollution Control E. Better Technology For Producing Other Goods And Services 32. A Technological Advance That Improves Pollution Control Methods Would Cause Which Of The Following Changes On The Graph? A Movement From A. A1 To A2 B. C1 To C2 C. Q1 To Q2 D. Tt1 To Tt2 E. 0 To C2 33. Assuming That The Economy Is Operating On The Ppc Tt1, The Benefit Of Increasing Pollution Is Shown On The Graph As A Movement From A. A2 To A1 B. C2 To C1 C. Q2 To Q1 D. Tt2 To Tt1 E. C2 To 0 34. Operating At Which Point On The Ppc Tt1 Will Result In The Most Environmental Degradation? A. T B. T1 C. T2 D. A1 E. A2 Questions 35 – 39 Refer To The Graph Below. 35. Assume That The Current Market Demand And Supply Curves For Z Are D2 And S2. If There Are Negative Social Spillovers Associated With The Production Of Z, A. Government Should Levy A Per Unit Tax On Z To Shift The Supply Curve Toward S1 B. An Output Greater Than 0g Would Improve Resource Allocation C. Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1 D. An Output Smaller Than 0g Would Improve Resource Allocation E. Both (A) And (D) 36. Assume That The Current Market Demand And Supply Curves For Z Are D2 And S2. If There Are Positive Social Spillovers Associated With The Production Of Z: A. Government Should Levy A Per Unit Tax On Z To Shift The Supply Curve Toward S1 B. An Output Greater Than 0g Would Improve Resource Allocation C. Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1 D. An Output Smaller Than 0g Would Improve Resource Allocation E. Both (A) And (D) 37. Assume That The Current Market Demand And Supply Curves For Z Are D1 And S1 And There Are Positive Social Spillovers Associated With The Consumption Of Z. Which Curve Could Represent The Msb Curve For Z? A. D1 B. D2 C. S1 D. S2 E. None Of The Above 38. Assume That The Current Market Demand And Supply Curves For Z Are D1 And S1 And There Are Positive Social Spillovers Associated With The Production Of Z. Which Curve Could Represent The Msc Curve For Z? A. D1 B. D2 C. S1 D. S2 E. None Of The Above 39. If “Z” Is Pollution Control, Which Of The Following Shifts Illustrates The Effect On The Market For Pollution Control If New Technology To Control Pollution Is Developed? A. D1 To D2 B. D2 To D1 C. S1 To S2 D. S2 To S1 E. None Of The Above Questions 40 – 44 Refer To The Graph Below. 40. If The Discharge Of The Firm Is Q1 Units Per Day And A Tax Of T1 Per Unit Is Placed On Polluted Discharge, The Firm Will A. Clean All Of Its Discharge Of Wastes B. Clean None Of Its Discharge Of Wastes C. Spend A0b0 Dollars On Cleaning The Discharge D. Spend A0q0 Dollars On Cleaning The Discharge E. (A) And (D) 41. A Tax Of T1 Per Unit On Polluted Discharge Will Induce The Firm To A. Clean Its Discharge Up To Q1 Units Per Day Rather Than Pay The Tax B. Pay The Tax Rather Than Clean Discharge Up To Q1 Units Per Day C. Clean Its Discharge Exceeding Q1 Units Per Day Rather Than Pay The Tax D. Pay The Tax On All Units E. (A) And (D) 42. A Tax Of More Than T1 Per Unit On Polluted Discharge Will Induce The Firm To Clean Up A. Q1 B. More Than Q1 C. Q D. More Than Q But Less Than Q1 E. Zero 43. A Tax Of M0 Per Unit On Polluted Discharge Will Induce The Firm To Clean Up A. Q1 B. More Than Q1 C. Q D. More Than Q But Less Than Q1 E. Zero 44. Suppose The Current Tax Is T1 And The Government Wishes To Allow Less Pollution. It Should A. Raise The Tax Above T1 B. Lower The Tax Below T1 C. Shift The Mpc Curve To The Left D. Shift The Mpc Curve To The Right E. Do None Of The Above Questions 45 – 49 Are Based On The Following Information. In A Small City Located On A Lake, The Raw Sewage Of The City Is Dumped Directly Into The Lake. This Has Been A Source Of Distress For Citizens Who Like To Swim, Fish, And Water Ski. A Study Has Been Instituted To Determine What Value The Citizens Place On Pollution Control, And The Results Are Listed In The Following Table. Costs Of Pollution Control Are Also Listed. 45. The Marginal Social Benefit Of The Sixth Unit Of Pollution Control Is A. $495,000 B. $180,000 C. $80,000 D. $60,000 E. $40,000 46. The Marginal Social Cost Of The Fourth Unit Of Pollution Control Is A. Zero B. $30,000 C. $90,000 D. $100,000 E. $120,000 47. At The Economically Efficient Level Of Control, Msb A. Equals Msc B. Equals $30,000 C. Is Lower Than At One Unit Less Pollution Control D. Is Higher Than At One Unit More Pollution Control E. Is All Of The Above 48. As The Units Of Pollution Control Increase, The Msb Of Controlling Pollution Is A. Increasing B. Decreasing C. Constant D. Harder To Define E. Impossible To Determine 49. The Economically Efficient Level Of Pollution Control Is A. 10 Units B. 9 Units C. 8 Units D. 4 Units E. 2 Units Questions 50 – 54 Refer To The Graph Below. 50. Which Curve Is The Firm’s Mpb Curve? A. D B. S C. X1 D. X2 E. None Of The Above 51. Given That The Firm’s Demand And Supply Curves Are D And S, Respectively, Which Curve Is The Msc Curve For The Polluting Firm’s Product? A. D B. S C. X1 D. X2 E. None Of The Above 52. What Is The Equilibrium Quantity Of The Polluting Firm’s Product In A Market With No Pollution Regulation? A. Q1 B. Q2 C. Q3 D. 0 E. It Cannot Be Determined 53. What Is The Efficient Quantity Of The Polluting Firm’s Product? A. Q1 B. Q2 C. Q3 D. 0 E. It Cannot Be Determined 54. The Value Of Well-Being Lost Due To Over-Production Of The Polluting Firm’s Product Is Equal To Area A. Acd B. Abd C. Deg D. Dgf E. This Cannot Be Shown In The Diagram Questions 55-59 Refer To The Graph Below. 55. Which Curve Is The Msc Curve For The Water-Using Firm’s Product? A. D B. S C. X1 D. X2 E. None Of The Above 56. What Is The Quantity Of The Firm’s Product In A Market With No Pollution Regulation? A. Q1 B. Q2 C. Q3 D. 0 E. It Cannot Be Determined 57. What Is The Efficient Quantity Of The Water-Using Firm’s Product? A. Q1 B. Q2 C. Q3 D. 0 E. It Cannot Be Determined 58. The Value Of Well-Being Lost Due To Under-Production Of The Water-Using Firm’s Product Is Equal To Area A. Acd B. Abd C. Bed D. Deg E. Dgf 59. Social Well-Being Would Be Enhanced If Output Of The Water-Using Firm Were To A. Increase From The Equilibrium Output B. Decrease From The Equilibrium Output C. Be Equal To The Equilibrium Output D. Be Greater Than Q3 E. Be Less Than Q1 60. Those Who Suffer From Pollution May Find It To Their Advantage To A. Have The Government Enact Legislation Compelling The Polluters To Take Antipollution Measures B. Bribe The Polluters To Control Their Pollution C. Have The Government Tax Pollution At A Rate That Increases With The Amount Of Pollution Generated D. Do All Of The Above E. Do None Of The Above 61. The Efficient Level Of Pollution Is Zero Only If The A. Marginal Cost Of Pollution Control Is Zero B. Marginal Benefit Of Pollution Control Is Zero C. Mpb Of Pollution Control Equals Msb D. Mpc Of Pollution Control Equals Msc E. Mpc Of Pollution Control Equals Mpb 62. Requiring Automobiles To Pass Emissions Tests Before Being Allowed On The Road Is An Example Of A(N) A. Direct Pollution Control B. Indirect Pollution Control C. Pollution Tax D. Market Solution To Pollution E. Positive Externality In Consumption 63. If A Pollution Tax Is Placed On A Firm Emitting Pollution, The Firm Will Pay The Tax, Rather Than Reduce Its Emissions, As Long As The Tax Is A. Above Its Mpc Of Pollution Control B. Below Its Mpc Of Pollution Control C. Above The Msc Of Pollution Control D. Below The Msc Of Pollution Control E. Reasonable 64. If A Pollution Tax Is Placed On A Firm Emitting Pollution, The Firm Will Treat Pollution, Rather Than Pay The Tax, As Long As The Tax Is A. Above Its Mpc Of Pollution Control B. Below Its Mpc Of Pollution Control C. Above The Msc Of Pollution Control D. Below The Msc Of Pollution Control E. Reasonable 65. In A Pollution Rights Market, A. Firms Buy Licenses To Pollute B. Firms Sell Licenses To Pollute C. Environmental Groups Can Reduce Pollution By Buying Licenses To Pollute D. The Government Can Determine The Level Of Pollution By The Number Of Licenses It Issues E. All Of The Above 66. Pollution Rights Markets A. Have Been Shown To Work In Theory, But Not In Practice B. Have Never Been Used In The Real World C. Are Used Around The World, But Not In The United States D. Have Been Used To Reduce Sulfur Dioxide Emissions E. Have Not Been Effective In Controlling Sulfur Dioxide Emissions 67. Direct Or Mandatory Control Imposed By Government On Polluters Presupposes That The Regulatory Body Can A. Determine What The Desirable Limits Of Pollution Are B. Determine Where The Marginal Costs Of Pollution Are Greatest C. Enforce Standards D. B) And C) E. All Of The Above 68. An Advantage Of Direct Regulation As A Method Of Controlling Pollution Is That A. The Optimal Level Of Pollution Control Can Be Easily Determined B. Pollution Reduction Quotas Can Be Varied To Remove Pollution Where It Is Least Costly C. Emission Control Standards Can Be Enforced Readily D. Changes In The Market Are Automatically Reflected In The Regulation E. It Seems Straightforward And Fair 69. Which Of The Following Approaches Would An Economist Propose To Address Industrial Pollution Of A River? A. Ban All Dumping Of Pollutants Near Or Into The River B. Limit Each Plant To A Maximum Amount Of Pollutant Emission C. Charge Each Polluter A Fixed Amount For Each Unit Of Pollutant Dumped Into The River D. Direct Pollution Control Regulation E. Command And Control Pollution Regulation 70. With Tradable Pollution Licenses To Control Pollution, Reductions In Total Pollution A. Can Be Achieved By Having Government Buy Back Some Of The Licenses B. Can Be Achieved By Having Government Sell More Licenses C. Requires The Government To Buy Back All Existing Licenses And Re-Issue New Licenses D. Cannot Be Achieved E. Is Never Economically Optimal 71. A Market For Pollution Rights Is An Efficient Approach To Pollution Control Because A. It Is Cheap To Implement B. It Leads To The Complete Elimination Of Pollution C. It Causes The Pollution To Be Eliminated At The Lowest Cost D. It Is Easy To Enforce E. None Of The Above 72. Production And Consumption In The Cigarette Market Is Too High Because A. Producers Do Not Care About The Health Of Their Customers B. Mpc Is Greater Than The Msc C. Mpb Is Greater Than Msb D. Msb Is Greater Than Mpb E. Mpb Is Less Than Msb 73. When Pollution Is Not Regulated In The Market, Polluting Firms Will A. Under-Utilize Resources And Charge High Prices B. Under-Utilize Resources And Charge Low Prices C. Use The Appropriate Level Of Resources, But Charge High Prices D. Be Very Profitable E. Over-Utilize Resources And Charge Low Prices 74. For A Tax On Pollution To Be Effective, It Must Be A. Placed On The Firm Polluting B. Greater Than The Cost Of Cleaning-Up The Pollution C. Placed On The Consumer D. Less Than The Cost Of Cleaning Up The Pollution E. Set At A Reasonable Rate 75. Suppose The Government Imposes A Tax On Electric Companies For Each Unit Of Sulfur They Emit. Which Of The Following Would Not Occur? A. Higher Prices For Electricity B. Lower Prices For Electricity C. Electric Companies Shifting To Low Sulfur Oil D. A Decrease In The Amount Of Electricity Produced E. A Shift To Alternative Energy Resources 76. If Jim Starts A Landscape Business And Uses A Truck And A Tractor That He Owns To Perform Landscaping Projects, We Can Conclude That A. The Costs Of The Truck And The Tractor Are Low B. That The Costs Of The Truck And The Tractor Are Explicit Costs C. There Is No Cost To The Business Since He Owns Both The Truck And The Tractor D. That The Costs Associated With Both The Truck And The Tractor Are Implicit Costs E. He Should Ask His Accountant How To Handle The Costs 77. When Firms Make Decisions About Output And About The Amount Of Pollution That They Produce, Without Government Regulation A. Firms Only Consider Their Private Benefits And Costs When Making Their Choices B. Firms Choose Not To Pollute Because It’s Bad For Their Public Image C. Social Costs Are Always Reflected In The Market Prices Firms Pay For Their Inputs D. Pollution Costs Are Passed On To Consumers In The Form Of Higher Prices E. Government Regulation Is Used Only In Command Economies 78. The Use Of Pollution Rights Licenses Can Improve Efficiency And Reduce Pollution Since A. Pollution Rights Licenses Do Not Improve Efficiency Nor Reduce Pollution B. The Licenses Give Environmental Groups Pollution Reducing Permits C. The Cost To Purchase These Licenses Means That Social Costs Are Reflected In The Firm’s Costs, Giving The Firm An Incentive To Reduce Pollution When It Is Economically Beneficial D. Such Licenses Improve Efficiency By Pricing Pollution But The Licenses Do Not Reduce Pollution E. There Is No Amount Of Pollution That Is Desirable Or Efficient True / False Questions 79. Pollution Occurs When The Environment Cannot Recycle All The Waste Dumped Into It. 80. Air Pollution Did Not Cause Great Concern Until The Last Few Decades. 81. Water Pollution Is Measured In Terms Of The Amount Of Toxins In The Water. 82. The Level Of Dissolved Oxygen Is An Important Measure Of Water Quality. 83. Pollution Is Generated Because Firms Use Inefficient Production Processes. 84. Pollution Consists Of Loading The Environment With Wastes That Are Not Completely Recycled, Are Not Recycled Fast Enough, Or Are Not Recycled At All. 85. Pollution Results In Resource Misallocation. 86. The “Marginal Social Benefit” Of An Economic Activity Is The Benefit That Is Just Above The Margin Of Being Zero. 87. If The Marginal Social Cost Of Attaining A Certain Level Of Water Purity Exceeds The Marginal Social Benefit, The Level Of Water Purity Should Be Decreased. 88. Net Social Benefits Will Always Be Increased By Increasing Pollution Control If The Marginal Social Benefit Of The Increase In Pollution Control Is Greater Than The Marginal Social Cost Of Additional Control Efforts. 89. Pollution Did Not Exist In Any Appreciable Amounts Prior To The Industrial Revolution. 90. The Optimum Level Of Pollution Is Zero. 91. The Costs Of Pollution Control To A Society Are Measured By The Value Of The Goods And Services That Must Be Given Up To Have The Control. 92. Complete Elimination Of Pollution Would Only Make Economic Sense If The Cost To Eliminate The Last Unit Of Pollution Is Less Than The Benefit From Its Elimination. 93. The Socially Optimal Level Of Production For Any Good Or Service Is Found Where Mpb=Mpc. 94. Deodorant May Be An Example Of A Good For Which Msb > Mpb.

95. If The Mpc Of Production Is Less Than The Msc, The Market Will Produce Too Much Of The Product.

96. Enjoying The Smell Of Bread Baking From Your Neighbor’s House Is An Example Of A Negative Externality.

97. If Your Snoring Keeps Your Roommate From Sleeping, You Roommate Is Experiencing A Negative Externality.

98. Pollution Is An Example Of A Negative Externality In Consumption.

99. Implicit Costs Are Opportunity Costs.

100. Explicit Costs Are Equal To The Value Of Self-Owned Resources.

101. Implicit Costs Are Also Known As Accounting Costs.

102. Direct Controls, Such As Setting Emission Standards For Automobiles, Will Achieve A Pollution Free Environment.

103. When A Firm Pollutes, Its Product Will Be Under-Priced And Over-Produced.

104. An Increase In A Tax Per Unit Of Polluted Discharge Will Decrease The Amount Of Pollution.

105. If Polluters Were Forced To Pay The Full Cost Of Their Activities, The Price Of Goods Produced By Polluting Firms Would Rise.

106. Direct Prohibition Of Pollution Has The Disadvantage Of Providing Economic Incentives For Polluters Not To Pollute.

107. In The Case Of An Upstream Paper Mill That Pollutes Water Used By A Downstream Power Plant Forcing The Latter To Clean The Water It Uses, The Costs Of Pollution By The Paper Industry Are Borne By Both The Consumers And Producers Of Electricity.

108. Whenever Consumers Are Willing To Pay More For An Item Than It Costs To Produce It, It Is Efficient To Expand Output.

109. Governmental Regulations Requiring Anti-Pollution Devices On Automobiles Result In A Decrease In The Demand For Automobiles And An Increase In Price.

110. Federal Grants Made To State And Local Governments For The Construction Of Sewage Treatment Facilities Encourage Private Industries To Develop Low Pollution Methods Of Production.

111. The Optimum Level Of Pollution Control Is Where Marginal Social Benefit Equals Marginal Social Cost.

112. Incentives To Pollute Stem From An Absence Of Property Rights In The Environment And From The Collectively Consumed Nature Of Whatever Is Being Polluted.

113. A Major Advantage Of Using Taxes To Control Pollution Is That They Provide An Incentive To The Polluter To Seek Improved Ways To Clean Up Discharge.

114. The Most Efficient Way To Control Pollution Is Direct Prohibition Of Polluting Activities By The Government.

115. Under The Private Property Rights Approach To Pollution Control, The Industry Or Firm That Most “Values” The Right To The Environment Will Control Environmental Services.

116. It Is Efficient For Regulatory Bodies To Induce Reduction In Pollution When The Marginal Social Cost Is Lowest, Regardless Of Which Firms Are The Worst Polluters.

117. A Pollution Rights Market Can Be An Efficient Method Of Pollution Control.

118. When Pollution Rights Markets Are Created, Those Firms Who Can Reduce Pollution Most Cheaply Will Do So.

119. When Pollution Rights Markets Are Used, The Overall Level Of Pollution Is Reduced If The Government Sells Additional Licenses.

120. The Establishment Of Clearly Defined Property Rights To The Environment Would Lead To An Elimination Of Pollution.

121. The Establishment Of Property Rights To The Environment Would Not, On Its Own, Lead To The Optimal Level Of Pollution Control.

122. Deodorant Is An Example Of A Collectively Consumed Good.

123. Polluting Firms Charge Prices Below What Would Exist Without Pollution.

124. The Creation Of A Market For Pollution Rights Eliminates Pollution Where It Is Cheapest To Do So.

125. When A Firm Has To Clean Environmental Resources Prior To Using Them, The Consumers Of That Firm’s Products Are Charged Higher Prices Than Would Exist In The Absence Of Pollution.

126. To Date, There Has Been No Formal Use Of Pollution Rights Markets.

127. Enforcement Is A Problem With All Methods Of Pollution Regulation.

128. Pollution Regulation Works Well Because Economists, Not Politicians, Are In Charge Of Regulatory Bodies.

Chapter 05

Economics Of Crime And Its Prevention: How Much Is Too Much?

Multiple Choice Questions

1. An Immoral Act Is
A. Easy To Define
B. Always Illegal
C. Different In Different Societies
D. Defined Consistently Across The United States
E. All Of The Above

2. Illegal Acts Are
A. Also Immoral
B. Ones That Society Has Determined That It Is Better Off Allowing
C. Designated As Such By The Criminal Justice System
D. Prevented Once A Law Is Passed
E. All Of The Above

3. Aggravated Assault Is An Example Of A(N)
A. Violent Crime
B. Crime Against Property
C. Illegal Trafficking Of Goods And Services
D. “Other” Crime
E. None Of The Above

4. Arson Is An Example Of A(N)
A. Violent Crime
B. Crime Against Property
C. Illegal Trafficking Of Goods And Services
D. “Other” Crime
E. None Of The Above

5. Prostitution Is An Example Of A(N)
A. Violent Crime
B. Crime Against Property
C. Illegal Trafficking Of Goods And Services
D. “Other” Crime
E. None Of The Above

6. Which Of The Following Statements Is Correct?
A. Criminal Acts Are Illegal Acts Whether Or Not Those Acts Are Immoral
B. Some Immoral Acts Are Criminal Acts And Some Are Not
C. Some Acts Are Criminal Because They Lead To Consequences The Criminal Is Unaware Of
D. Some Acts That Might Result In Chaotic Conditions Are Made Criminal By Legislative Bodies
E. All Of The Above

7. Which Of The Following Exists When An Individual Consumes Benefits From A Public Good But Does Not Pay For Its Cost?
A. Free-Riding
B. A Negative Externality In Consumption
C. A Negative Externality In Production
D. Implicit Costs
E. Psychic Costs

8. The Free-Rider Problem Refers To
A. Those Who Receive The Benefits Of A Public Good Without Paying A Part Of Its Cost
B. Those Who Ride Public Transportation Without Paying Their Fares
C. Those Who Ride In Rodeos And Do Not Win Prizes
D. Jockeys Who Are Not Paid
E. None Of The Above

9. Which Of The Following Goods Or Services Is A Public Good?
A. Polio Immunization
B. Stamp Collection
C. A Smoke Detector
D. National Defense
E. A Burglar Alarm

10. Government Can Effectively Remedy The Free-Rider Problem By
A. Requiring All Who Receive The Benefits Of A Public Good Or Service To Pay Appropriate Taxes For It
B. Imposing A Tax On Automobiles And All Other Forms Of Transportation
C. Eliminating All Forms Of Transportation
D. Banning Private Crime Prevention Activities
E. None Of The Above

11. A Characteristic Of A Public Good Or Service Is
A. That No Individual Can Identify Specifically The Part Of It That He Or She Consumes
B. Once The Good Is Provided, It Is Difficult Or Impossible To Exclude Anyone From Using It
C. If It Is Provided Privately, It Generates A “Free-Rider” Problem
D. One Person’s Use Does Not Decrease The Quantity Available For Others
E. All Of The Above

12. Which Of The Following Is Most Likely A Public Good?
A. A College Education
B. A Smoke Detector
C. Smallpox Immunization
D. Elementary Education
E. Space Exploration

13. A Group Project Has Been Assigned And Most Of The Work Ends Up Being Produced By Only One Or Two Of The Group’s Members. This Is An Example Of
A. The Free-Rider Problem
B. Diminishing Marginal Returns
C. The Opportunity Cost Principle
D. Equimarginal Principle
E. An Immoral Act

14. Immunization For Polio Is An Example Of A(N)
A. Semi Private Good
B. Public Good
C. Private Good
D. Good Which The Market Will Efficiently Produce
E. Externality In Production

15. Which Of The Following Statements Is ?
A. The Government In A Private Enterprise Economy Confines Its Production Of Goods And Services To Public Goods
B. A Major Difference Between Private Enterprise Economic System And A Socialistic Economic System Is That The Government Of The Latter Is Responsible For The Production Of Most Private, As Well As Public And Semi-Private, Goods
C. Governments Of Private Enterprise Systems Leave The Bulk Of Private Goods To Be Produced By Private Businesses
D. Governments Of Private Enterprise Economies Play A Relatively Important Role In The Provision Of Semi-Private Goods
E. None Of The Above

16. The Costs Of Resources Used In Crime Prevention
A. Are Equal To The Value Those Resources Would Have Provided In Their Best Alternative Use
B. Are Equal To The Value Of These Resources In Reducing Crime
C. Can Be Approximated By The Expenditures On Criminal Activities
D. Both (A) And (C)
E. All Of The Above

17. From An Economic Point Of View, Crime Prevention Activities Should Be Expanded To The Point At Which
A. Their Marginal Social Benefit No Longer Exceeds Their Marginal Social Cost
B. All Crime Is Stamped Out
C. All Crimes Against Persons Are Eliminated
D. Their Total Gross Benefits Are Maximum
E. None Of The Above

18. The Marginal Cost Of A Good Is
A. The Change In Total Product Associated With The Change In Resource Inputs
B. The Average Cost Of The Product
C. The Total Cost Of The Good Divided By Output
D. The Change In Total Cost Per Unit Change In Output
E. None Of The Above

19. According To The Equimarginal Principle, A City’s Crime Prevention Budget Should Be Allocated Such That
A. The Last Dollar Spent On Detection And Apprehension Of Criminals Should Yield The Same Addition To People’s Benefits As The Last Dollar Spent Determining Guilt Or Innocence And The Last Dollar Spent On Corrections And Punishment
B. Total Benefits Of Crime Prevention Are Equal To Total Costs
C. Expenditure On Court Services Proceeds Exceed Those On The Police Force Because Services Of A Lawyer Are More Expensive Than Those Of A Policeman Or Policewoman
D. The Same Number Of Police Officers Patrol Each Square Block At The Margins Of The City’s Residential Area
E. The Same Number Of Police Officers Are Used Per Square Block In The City’s Suburbs As In Its Downtown Area

20. Suppose An Auto Worth $25,000 Is Stolen. The Economic Cost Of This Theft, From Society’s Point Of View, Does Not Include
A. The $25,000 The Auto Is Worth
B. The Value Of The Resources Expended By Society Attempting To Capture The Thief
C. The Value Of The Inconvenience Caused To The Owner
D. The Cost Of Resources Used To Reduce Car Theft
E. All Of The Above

21. Suppose The Total Social Benefits Of Crime Protection Increase From $800,000 To $900,000 And Total Social Costs Increase From $650,000 To $800,000, With The Addition Of Another Unit Of Crime Prevention Services.
A. The Msb>Msc And Crime Prevention Activities Should Be Expanded
B. The Msb=Msc And The Level Of Crime Prevention Is Optional
C. The MsbTsc And Crime Prevention Should Be Expanded
E. None Of The Above

22. Police Officers Should Be Hired Up To The Point Where
A. The Public Feels Safe In Their Homes
B. The Crime Rate Falls To Zero
C. The Benefit Of The Last Officer Hired Is Just Equal To What Its Cost To Hire Her
D. The Benefit Of The Last Officer Hired Exceeds The Cost
E. It Is Not Possible To Tell Without Further Information

23. Which Of The Following Is Not An Economic Cost Of Crime? The
A. Lost Earnings Of Victims Of Crime
B. Value Of Property Destroyed By Criminal Activities
C. Dollars Spent On Illegal Drugs
D. Tax Dollars Spent On Crime Prevention
E. Suffering Experienced By Crime Victims

24. Economic Analysis Of Crime Can
A. Determine What Activities Should Be Considered Illegal
B. Determine What The Economic Impact Will Be Of Making Certain Activities Illegal
C. Tell Us Which Activities Should Be Punishable
D. Tell Us How Much It Will Cost To Eliminate Crime
E. Do All Of The Above

25. Marginal Social Benefits Of Crime Prevention Activities
A. Are The Increase In The Value Of Such Activities To The Community Resulting From A One-Unit Increase In Such Activities
B. Are Difficult To Calculate
C. Usually Decrease With Additional Units Of Those Activities
D. Include A Decrease In The Suffering Of Crime Victims
E. All Of The Above

26. If Society Receives No Additional Benefit From Increasing Crime Prevention Activities, The Msb Of Crime Prevention
A. Equals 0
B. Is Increasing
C. Is Decreasing
D. Is Equal To The Msc Of Crime Prevention
E. Must Rise In The Long Run.

27. If Increasing Police Patrols In A Neighborhood Requires Paying Officers Overtime, Then The Marginal Cost Of Additional Police Patrols
A. Increases
B. Decreases
C. Equals Msb
D. Must Fall Before It Is Efficient To Have More Patrols
E. Are Too High

28. Assume Police Officers And Prison Guards Earn $30,000. Hiring A Police Officer Changes The Total Benefits Of Crime Prevention From 100 To 120, While Hiring A Prison Guard Increases Total Benefits From 100 To 115. If The Crime Prevention Budget Is Increased By $30,000, Which Of The Following Is The Most Efficient Way To Spend The Money?
A. Hire A Guard
B. Hire A Police Officer
C. Hire One Guard And One Police Officer
D. Hire A Half Time Guard And A Half Time Police Officer
E. Do Not Spend The Additional Money

29. If The Private Benefit Of Buying A Car Alarm Is $250 And The Social Benefit Of The Car Alarm Is $350, Is It Optimal For You To Buy A Car Alarm If It Costs $300?
A. Yes, Because Benefits Exceed The Cost
B. Yes, Because Msb > Msc
C. No, Because Private Benefits Are Less Than Private Cost
D. No, Because Mpb < Msc
E. The Outcome Is The Same Whether You Buy The Alarm Or Not

30. Additional Expenditures Should Not Be Made On Police Protection If The Additional Cost Of Police Protection
A. Is Less Than The Additional Benefit
B. Would Increase The Msb Of Fire Protection By More
C. Is More Than The Change Total Social Benefits As A Result Of The Additional Police Protection
D. Would Cause A Larger Increase In Total Social Benefits If Spent Elsewhere
E. Is All Of The Above

31. An Additional Expenditure On Crime Prevention Should Be Allocated To The Activity Where
A. Msb Is Greatest
B. Msc Is Lowest
C. Tsb Is Greatest
D. Tsc Is Lowest
E. Tsc Is Highest

Questions 32 – 36 Refer To The Table Below.

32. The Marginal Social Benefit Of The Third Unit Of Crime Prevention Is
A. 200
B. 180
C. 160
D. 140
E. 90

33. The Marginal Social Cost Of The Fourth Unit Of Crime Prevention Is
A. 270
B. 180
C. 160
D. 90
E. 60

34. The Efficient Number Of Units Of Crime Prevention Is
A. 1
B. 2
C. 3
D. 4
E. 5

35. As More Crime Prevention Is Added, The Msb Of Crime Prevention
A. Increases
B. Decreases
C. Becomes Higher Than Mcs
D. Does Not Change
E. Is More Difficult To Determine

36. The Net Benefit Of An Additional Unit Of Crime Prevention To Society Is Highest With How Many Units Of Crime Prevention?
A. 0
B. 1
C. 3
D. 5
E. 6

Questions 37 – 41 Refer To The Table Below.

The Cost Of Each Police Officer Is $20,000; The Cost Of Each Patrol Car Is $10,000.

37. If The Total Budget Is $100,000, What Is The Most Efficient Allocation Of The Crime Prevention Budget?
A. 1 Police Officer; 8 Patrol Cars
B. 2 Police Officers; 6 Patrol Cars
C. 3 Police Officers; 4 Patrol Cars
D. 4 Police Officers; 2 Patrol Cars
E. 5 Police Officers; 0 Patrol Cars

38. If The Police Department Gets An Additional Allocation Of $40,000, How Should The Money Be Allocated Between Police Officers And Patrol Cars?
A. 2 Police Officers; 0 Patrol Cars
B. 2 Police Officers; 1 Patrol Car
C. 1 Police Officer; 1 Patrol Car
D. 1 Police Officer; 2 Patrol Cars
E. 0 Police Officers; 4 Patrol Cars

39. The Net Social Benefit Of The Third Patrol Car Is
A. $11,000
B. $15,000
C. $20,000
D. $36,000
E. $45,000

40. The Total Benefit Of Hiring Three Police Officers Is
A. $18,000
B. $48,000
C. $60,000
D. $148,000
E. $249,000

41. The Net Social Benefit Of Hiring One Police Officer And Buying One Patrol Car Is
A. $40,000
B. $41,000
C. $80,000
D. $120,000
E. $150,000

42. If Abortion Were Made Illegal Throughout The United States,
A. The Cost Of Abortion Services Would Rise
B. The Quality Of Abortion Services Would Fall And Become Less Standardized
C. The Supply Of Abortion Services Would Decrease
D. The Demand For Abortion Services Would Decrease
E. All Of The Above

43. The More Abortions A Doctor Performs, The Fewer The Appendectomies He Can Perform. Measuring The Cost Of An Abortion In Terms Of The Number Of Appendectomies He Must Forego Performing Is An Illustration Of The
A. Economies Of Mass Production
B. Law Of Diminishing Returns
C. Opportunity Cost Principle
D. Law Of Comparative Advantage
E. Law Of Demand

44. In Any City With A Given Crime Prevention Budget, Additional Suppression Of Prostitution
A. Will Necessarily Result In Unemployment
B. Is Always Economically And Morally Defensible
C. Is Never Defensible Economically Or Morally
D. Will Usually Be Achieved At The Expense Of An Increase In Other Kinds Of Crime
E. All Of The Above

45. Which Of The Following Is An Economic Effect Of Prohibition Of Alcohol?
A. A Reduction In The Supply, A Decrease In Price, And A Decrease In The Quality Of Liquor
B. An Increase In Supply, A Decrease In Price, And An Increase In The Quality Of Liquor
C. A Decrease In Supply, An Increase In Price, And No Change In The Quality
D. A Decrease In Supply, An Increase In Price, And A Decrease In Quality
E. None Of The Above

46. If A Law Is Passed Making It Illegal For Unlicensed Barbers To Cut Hair, Which Of The Following Will Result?
A. Higher Quality Haircuts
B. Higher Priced Haircuts
C. Cleaner, More Sanitary Barber Shops
D. Lower Priced Haircuts
E. More Barbers In The Trade

47. Suppose A Poor Person Steals $10,000 From A Middle Income Person. Economic Analysis Tells Us That
A. There Is An Economic Loss For The Society As A Whole
B. There Is An Economic Gain For The Society As A Whole
C. A Public Good Will Usually Be Purchased With The Money
D. We Cannot Be Sure Whether There Is Economic Gain Or Loss For The Society As A Whole
E. The Benefit To The Poor Person Exceeds The Cost To The Middle Income Person

48. The Most Likely Economic Effects Of The Legalization Of Marijuana Are
A. An Increase In Both Supply And Demand
B. A Fall In The Price Of Marijuana
C. An Increase In Marijuana Use
D. An Increase In The Quality Of Marijuana
E. All Of The Above

Questions 49 – 53 Refer To The Graph Below.

49. Which Of The Following Shifts Best Represents The Likely Effect Of Legalizing Marijuana?
A. D1 To D2
B. D2 To D1
C. S2 To S1
D. D1 To D2 And S1 To S2
E. D2 To D1 And S1 To S2

50. If The Market For Marijuana Changes From Illegal To Legal, Supply Will
A. Increase
B. Decrease
C. Shift To The Left
D. Not Be Affected
E. Become Steeper

51. Curves D1 And S1 Represent The Market For Marijuana If It Is Illegal. Legalization Of Marijuana Will Cause Equilibrium Price And Quantity To Change To
A. P1 And Q2
B. P2 And Q1
C. P3 And Q4
D. P4 And Q3
E. None Of The Above

52. If The Market For Marijuana Changes From Legal To Illegal, Demand Will
A. Increase
B. Decrease
C. Shift To The Right
D. Not Be Affected
E. Become Steeper

53. In Addition To The Change In Supply, Demand, Price, And Quantity, Legalization Of Marijuana Would Have Which Of The Following Effects?
A. Improved Quality
B. Less Criminal Activity
C. A Decrease In Resources Needed For Crime Prevention
D. All Of The Above
E. None Of The Above

Questions 54 – 58 Refer To The Graph Below.

54. Which Of The Following Shifts Best Represents The Likely Effect Of Prohibition On The Market For Beer?
A. D1 To D2
B. D2 To D1
C. S2 To S1
D. D1 To D2 And S1 To S2
E. D2 To D1 And S2 To S1

55. With Prohibition, Supply In The Market For Beer Will
A. Increase
B. Decrease
C. Shift To The Right
D. Not Be Affected
E. Become Flatter

56. With Prohibition, Demand In The Market For Beer Will
A. Increase
B. Decrease
C. Shift To The Right
D. Not Be Affected
E. Become Flatter

57. Curves D2 And S2 Represent The Market For Beer If It Is Legal. Prohibition Will Cause Equilibrium Price And Quantity To Change To
A. P1 And Q2
B. P2 And Q1
C. P3 And Q4
D. P4 And Q3
E. None Of The Above

58. In Addition To The Change In Supply, Demand, Price, And Quantity Of Beer, Prohibition Would Have Which Of The Following Effects?
A. Improved Quality
B. Less Criminal Activity
C. A Decrease In Resources Needed For Crime Prevention
D. All Of The Above
E. None Of The Above

59. Which Of The Following Would Not Result From The Legalization Of Marijuana?
A. A Fall In The Price Of Marijuana
B. An Increase In The Quality Of Marijuana
C. A Significant Increase In The Supply Of Marijuana
D. A Significant Increase In The Demand For Marijuana
E. A Decrease In The Supply Of Marijuana

60. People Choose To Participate In Criminal Activities Because
A. Their Implicit Costs Are Low
B. They Have A Strong, Unrestrained Emotion
C. The Probability Of Getting Caught Is Low
D. The Potential Return Is High
E. All Of The Above

61. Economics Explains The Decision To Participate In Criminal Activities Most Often In The Case Of
A. Violent Crimes
B. Crimes Of Passion
C. Murder
D. Trafficking In Illegal Substances
E. Vandalism

62. If You Are Willing To Take A Pay Cut To Live Near A Ski Resort, The Ski Resort Provides You With
A. Free Ski Lessons
B. Psychic Benefits
C. Opportunities For Advancement
D. Marginal Social Benefits
E. Marginal Social Costs

63. If Income From The Sale Of Illegal Goods Exceeds The Production Costs Of The Goods, Which Of The Following Is ?
A. The Criminal Earns A Profit
B. Crime “Pays”
C. Revenue Plus Psychic Income Exceeds All Costs
D. Income More Than Covers Explicit, Implicit, And Psychic Costs
E. All Of The Above

64. Which Of The Following Is An Explicit Cost Of An Illegal Marijuana Growing Operation? The Cost Of
A. Land
B. Electricity
C. Fertilizer And Pesticides
D. Labor
E. All Of The Above

65. Which Of The Following Is An Implicit Cost Of An Illegal Marijuana Growing Operation?
A. Foregone Income Due To Time Spent Managing The Operation
B. Lost Time If The Manager Is Caught
C. Lost Liberty If The Manager Is Jailed
D. The Value Of The Time Spent Avoiding Detection
E. All Of The Above

66. Which Of The Following Does Not Go Into The Calculation Of The Implicit Cost Of A Marijuana Growing Operation?
A. The Probability Of Getting Caught
B. The Severity Of Potential Jail Sentences
C. The Time It Takes To Tend The Crop
D. Payments For Fertilizer And Pesticides
E. None Of The Above (They All Go Into The Calculation Of Implicit Costs)

67. Which Of The Following Decreases A Person’s Implicit Cost Of Engaging In The Illegal Production Of Marijuana?
A. Concern About Social Standing
B. Unemployment
C. An Intense Fear Of Incarceration
D. A High Probability Of Getting Caught
E. All Of The Above

68. When An Individual Incurs Costs In The Form Of Negative Personal Satisfaction, The Costs Are
A. Opportunity Costs
B. Implicit Costs
C. Psychic Costs
D. Psychic Income
E. Externalities

69. Which Of The Following Increases The Chances That A Person Will Engage In Criminal Activity?
A. A High Perceived Probability Of Getting Caught
B. A Low Potential Pay-Off From The Crime
C. The Ability To Restrain Emotions
D. A Low Opportunity Cost
E. None Of The Above

70. When An Individual Receives Benefits From A Business Endeavor In The Form Of Personal Satisfaction, The Benefits Are Known As
A. Opportunity Costs
B. Implicit Costs
C. Psychic Costs
D. Psychic Income
E. Externalities

71. Which Of The Following Will Increase The Implicit Costs Of Committing A Crime?
A. Decreased Crime Prevention Expenditures
B. Decreased Probability Of Getting Caught
C. Improved Job Opportunities
D. More Lenient Sentencing
E. Less Severe Penalties

72. Which Of The Following Could Explain Why Criminals Commit Crimes That Are Punished By The Death Penalty?
A. They Perceive That The Probability Of Getting Caught Is Zero
B. The Crime Is A “Crime Of Passion.”
C. Their Opportunity Cost Is Zero
D. The Benefit Of The Crime Is Infinite
E. All Of The Above

73. Which Of The Following Policies Could Increase The Cost Of Committing Crimes?
A. Job Training Programs
B. Increased Employment Opportunities
C. Higher Crime Prevention Budgets
D. More Severe Penalties
E. All Of The Above

74. Some People Give Up High-Paying City Jobs To Live Much Simpler, Rural Lives. Which Of The Following Is A Sound Economic Explanation For This?
A. The Very High Psychic Income They Receive From The Simple Way Of Life
B. The Lower Cost Of Living In The Country
C. The Fear Of Crime In The City
D. The Fact That Rural Jobs Are Easier
E. None Of The Above

75. Job Training Programs, Remedial Education Courses, And Recreational Activities Might Lead To Reduced Crime Rates In Depressed Areas By
A. Providing Jobs To Instructors And Counselors
B. Increasing The Opportunity Costs Of Committing Crimes
C. Improving The Public’s View Of Their Community
D. Providing Psychic Income To Organizers
E. None Of The Above

76. An Example Of A Semi-Private Good Would Be
A. Measles Inoculation Programs
B. A Neighborhood Crime Watch Group
C. Talking On A Cell Phone During The Screening Of A Movie
D. All Of The Above Are Semi-Private Goods
E. None Of The Choices Are Semi-Private Goods

77. Consumer Ratings Of Products Online, Like The Zagat’s Restaurant Guide And Epinions Can Be Considered Examples Of
A. Private Goods
B. Public Goods
C. Semi-Private Goods
D. Experience Goods
E. Worthless, Since You Don’t Know Who Is Doing The Reviewing

78. Economists Think That You Can Analyze Why Individuals Commit Crimes Because
A. Criminals Are Always Trying To Obtain Monetary Gains
B. Criminals Weigh The Costs And Benefits Associated With The Costs Of Committing A Crime
C. Crime Has Costs To Society
D. All Of The Above
E. It Is Not Possible To Analyze The Commission Of Crimes Using Economic Analysis

True / False Questions

79. Murder Is Both Illegal And Immoral.

80. Current Reports On Crime Are Concerned Solely With The Number Of Crimes Committed And Not With Dollar Estimates Of Their Cost.

81. The Criminality Of Specific Acts Can Be Ascertained By Evaluating Their Morality Or Immorality.

82. Vandalism Is A Violent Crime.

83. Violent Crimes Are Crimes Against Persons.

84. Crime Prevention Is A Public Good And Is Subject To The Free-Rider Problem.

85. The Free-Rider Problem Occurs When People Cannot Be Excluded From The Benefits Of A Public Good Even Though They Do Not Help Pay For Production Of It.

86. Government Can Effectively Remedy The Free-Rider Problem By Taxing All Who Receive Benefits Of A Public Good.

87. Automobiles Can Be Considered Semiprivate Goods, Since They Produce Positive Externalities.

88. Semi-Private Goods And Services Yield Identifiable Benefits To The One Who Consumes Them, But Their Consumption By One Person Yields Spillover Benefits To Other Persons.

89. Thanks To The Data-Collecting Activities Of The U.S. Department Of Justice, We Now Have Very Good Estimates Of The Costs Of Crime.

90. Society’s Standards Of Social Values Are An Important Determinant Of The Level Of Criminal Activity.

91. Laws Prohibiting Abortions Rest On Moral Grounds Rather Than Economic Grounds.

92. Group Projects Can Suffer From A Free-Rider Problem.

93. A Polio Vaccine Is An Example Of A Good That Is Semi-Private.

94. Public Goods Include Things Like Concerts And Theater Performances.

95. Free-Riders Can Be Useful In Group Work Situations Because They Cause The Work To Be Completed By Those Members Of The Group Who Are Best At The Assigned Tasks.

96. From The Viewpoint Of A Society As A Whole, Theft Represents A Transfer Of Income To Thieves From Victims Of Theft.

97. If The Correct Amount Has Been Budgeted For Crime Prevention Activities, The Last Dollar Spent Should Yield Approximately One Dollar’s Worth Of Additional Benefits.

98. Crime Prevention Activities Should, If Effective, Raise Gdp Above The Level That It Would Be In Their Absence.

99. The Economic Cost Of Crime Prevention Is The Value Of The Goods And Services That Could Have Been Produced Using Resources Put Into Crime Prevention.

100. Marginal Social Benefits Are The Positive Social Spillovers In Consumption That Result From The Consumption Of Public Goods.

101. The Costs Of Being Apprehended And Convicted Of A Crime Are Less For Those Living In Poverty Than For Those From Middle And Upper Income Groups.

102. The Ultimate Economic Goal Of Crime Prevention Is Complete Suppression Of Crime.

103. More Criminal Justice Expenditures Should Be Made For Detection And Apprehension Of Criminals.

104. Crime Prevention Activities Should Be Expanded To The Point At Which Their Marginal Social Benefit Is Equal To Their Marginal Social Costs.

105. In The United States, The Federal Government Spends More For Corrections Than State And Local Governments.

106. Crime Prevention Is An Example Of A “Free” Good Since It Raises Gdp Above The Level That It Would Be In The Absence Of Prevention.

107. The Equimarginal Principle May Be Applied Effectively Any Time A Fixed Budget Must Be Allocated Among Competing Uses.

108. The Equimarginal Principle Is Satisfied When We Spend The Same Amount Of Money On The Police, Courts, And Prisons.

109. Trafficking In Illegal Goods And Services Adds To The Well-Being Of Consumers.

110. If Abortion Is Made Illegal, Demand And Supply Will Fall.

111. The Economic Effects Of Prohibition Of Alcoholic Beverages Include A Decrease In Supply, An Increase In Price, And A Decrease In Quality.

112. The Legalization Of Marijuana Would Be Unlikely To Greatly Increase The Demand For The Good.

113. Trafficking In Illegal Goods And Services Necessarily Reduces The Economic Welfare Of A Society.

114. A Budget Is Allocated Efficiently When All Functions Within The Budget Receive The Same Amount Of Funding.

115. The Demand For Abortions Would Fall Significantly If The Service Were Made Illegal.

116. Psychic Income Refers To The Satisfaction Received From Attending Cultural Events Like Special Showings At An Art Gallery.

117. The Total Revenue From A Business Includes The Money Income The Business Takes In And Any Psychic Income The Owners Receive.

118. If The Likelihood Of Being Caught Committing A Crime Is Low, The Severity Of The Penalty Is Of Little Importance To Potential Criminals.

119. The Legalization Of Marijuana Would Cause A Big Increase In The Demand For The Drug.

120. The Legalization Of Marijuana Would Lead To A Significant Increase In The Quality Of The Drug Available On The Streets.

121. Making Abortion Services Illegal Would Lead To A Large Decrease In The Demand For The Service.

122. Recreational Activities For Youths In Depressed Areas Might Help Reduce Criminal Activities By Increasing The Opportunity Cost Of Committing Crimes.

123. The Value Of Property Damage From A Crime Is An Implicit Cost Of The Crime.

124. The Negative Personal Satisfaction Received Because You Have To Drive A Different Car Than You Would Otherwise Choose Because It Is Harder To Steal Is An Example Of A Psychic Cost Of Crime.

125. If You Love Your Job, You Are Receiving Psychic Income.

126. The Opportunity Cost Of A Doctor Who Spends One-Half Hour Performing An Abortion Might Be The $2,000 He Could Earn During The Same Amount Of Time Performing An Appendectomy.

127. People Are More Likely To Commit Crimes If They Perceive The Probability Of Getting Caught Is Low.

128. The Opportunity Cost Of Jail Time Is What You Could Have Done Had You Not Been In Jail.