ECO 405 Week 4 Quiz Strayer

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Chapter 04

Pollution Problems: Must We Foul Our Own Nests?

Multiple Choice Questions1.PollutionA.Like Air And Water Pollution Became An Issue In The U.S. During The 1960'sB.Tends To Be Worse In More Populated Than In Less Populated AreasC.Occurs Because Large Portions Of The Environment Are Owned By PollutersD.Increases The Cost Of Producing All GoodsE.Issues Are Represented In All Of The Above Answers2.The Level Of Pollution Increases WhenA.A Person BreathesB.Wastes Are Dumped Into The EnvironmentC.Wastes Are Dumped Into The Environment At A Higher Rate Than Wastes Are RecycledD.New Industrial Plant OpensE.Recycling Increases3.Which Of The Following Is A Service Provided By The Environment?A.Use As A HabitatB.Provision Of AmenitiesC.Provision Of Raw MaterialsD.Waste DisposalE.All Of The Above4.Which Of The Following Best Describes Why Pollution Exists In The Environment?A.The Environment Has No Capacity To Recycle WasteB.All Materials Take A Very Long Time To Recycle In The EnvironmentC.No Waste Can Be Completely RecycledD.Recycling Processes Fail To Prevent Wastes From Accumulating In The EnvironmentE.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 IronB.Renewable Resources, Like Timber And Plant ProductsC.Technological Advances In ProductionD.Recycling Of Waste Materials, Such As Chemical WastesE.All Of The Above6.Marginal Private Cost (Mpc) Always Includes:A.The Price Of A Good In The MarketB.The Extra Costs Of Production Of One More Unit Of A GoodC.The Additional Benefits Received By Consumers From The Consumption Of The GoodD.The Costs Imposed On Society From PollutionE.The Expenditures By Government To Control Negative Externalities7.The Term "Marginal Social Benefit" MeansA.Benefits That Are Just Above The Margin Of Being ZeroB.The Entire Benefits Obtainable From The ActivityC.That Part Of The Benefits Covered By The Costs Of Carrying On The ActivityD.The Change In Total Social Benefits Per Unit Change In The Amount Of The ActivityE.The Benefits Of Minimal Quality Goods And Services8.If All Benefits From Consuming A Good Go To Consumers, The Demand Curve Is The Same As TheA.Mpc CurveB.Msc CurveC.Mpb CurveD.Supply CurveE.Benefit Curve9.When There Are No Externalities, Equilibrium In A MarketA.Maximizes Social Well-BeingB.Equates Quantity Supplied And Quantity DemandedC.Equates Msb And MscD.Equates Mpb And MpcE.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 ExternalityB.Negative ExternalityC.Externality In ConsumptionD.Externality In ProductionE.External Cost11.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 ExternalityB.Negative ExternalityC.Externality In ConsumptionD.Externality In ProductionE.External Cost12.When The Marginal Private Benefit Of An Activity Does Not Equal The Marginal Social Benefit, Which Of The Following Exists?A.Positive ExternalityB.Negative ExternalityC.Externality In ConsumptionD.Externality In ProductionE.External Cost13.When The Marginal Private Cost Of An Activity Does Not Equal The Marginal Social Cost, Which Of The Following Exists?A.Positive ExternalityB.Negative ExternalityC.Externality In ConsumptionD.Externality In ProductionE.External Cost

14.Which Of The Following Creates A Positive Externality In Consumption?A.Polluting A RiverB.Playing Loud MusicC.VaccinationsD.Reducing The Cost Of Producing Of Another GoodE.Strip Mining15.Which Of The Following Creates A Positive Externality In Production?A.Polluting A RiverB.Playing Loud MusicC.VaccinationsD.Reducing The Cost Of Producing Of Another GoodE.Strip Mining16.Which Of The Following Creates A Negative Externality In Consumption?A.Polluting A RiverB.Playing Loud MusicC.VaccinationsD.Reducing The Cost Of Producing Of Another GoodE.Strip Mining17.People Have An Incentive To Pollute WhenA.There Is Collective Consumption Of An Environmental ServiceB.No One Has Property Rights To The EnvironmentC.It Is Less Expensive To Pollute Than To Clean UpD.The Mpc Of Polluting < Mpc Of CleanupE.All Of The Above18.As Additional Units Of Pollution Control Are Added, At Some Point Each Additional Unit AddsA.Less Than The Previous Unit To Total BenefitsB.More Than The Previous Unit To Total BenefitsC.Less Than The Previous Unit To Total CostsD.More To Total Benefits Than To Total CostsE.Less To Total Costs Than Total Benefits

19.When Mpc Is Less Than Msc,A.Firms Will Tend To Produce More Than Is Socially OptimalB.The Price Of The Product Will Be Higher Than The Competitive PriceC.The Firm Must Be A MonopolistD.The Firm Will Produce Less Than Is Socially OptimalE.There Are Positive Externalities In Production20.Complete Elimination Of Pollution Is Economically Rational WhenA.Pollution Is Associated With Illness In HumansB.For Each Unit Of Pollution, The Cost Of Clean-Up Is Less Than The Benefit From Its EliminationC.The Pollution Will Likely Affect Future GenerationsD.Msc Of Cleanup < Msb Of CleanupE.None Of The Above; Complete Elimination Is Never Rational21.Pollution Should Be Completely EliminatedA.When The Marginal Social Benefit Of Control Is Greater Than Or Equal To The Marginal Social Cost Of Control For All Units Of PollutionB.When The Marginal Social Cost Of Control Is ZeroC.At No Time, From An Economic PerspectiveD.All Of The AboveE.(A) And (B)22.The Optimal Level Of Pollution Control Occurs WhenA.Msb Of Control Equals MscB.Pollution Is ZeroC.Msb Of Control Just Exceeds MscD.Msb Of Control Is Less Than MscE.None Of The Above23.The Market Output Level Tends To Be Socially Optimal WhenA.Demand Equals Supply In The MarketB.All Costs And Benefits Are Private And Msb=MscC.There Is Neither A Shortage Nor A Surplus Of The ProductD.There Are Externalities In ProductionE.There Are Externalities In Consumption24.Costs Incurred By The Producer For The Use Of Self-Owned Resources Are CalledA.Implicit CostsB.Explicit CostsC.Accounting CostsD.Total CostsE.Marginal Costs25.Costs Incurred By The Producer To Buy Or Hire Resources Are CalledA.Implicit CostsB.Explicit CostsC.Opportunity CostsD.Total CostsE.Marginal Costs26.Another Term For Implicit Cost IsA.Out-Of-Pocket CostsB.Explicit CostsC.Opportunity CostD.Total CostE.Marginal Cost27.Payment By A Firm To Hire A Worker Is An Example Of A(N)A.Implicit CostB.Explicit CostC.Opportunity CostD.Total CostE.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-ProduceB.The Paper Mill Will Under-Produce And The Bottling Plant Will Over-ProduceC.The Paper Mill Will Over-Produce And The Bottling Plant Will Under-ProduceD.Both Will Under-ProduceE.Neither Will Over-Produce Or Under-Produce29.Which Of The Following Is A Factor Leading To Pollution?A.People Are Inherently DirtyB.There Are Property Rights To The EnvironmentC.The Environment Is Collectively ConsumedD.The Law Of Increasing ReturnsE.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 IsA.A1a2 Dollars' Worth Of Other Goods And ServicesB.Q1q2 Dollars' Worth Of Other Goods And ServicesC.C1c2 Dollars' Worth Of Pollution ControlD.Tq1, Dollars' Worth Of Other Goods And ServicesE.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 ActivitiesB.Better Techniques Of Pollution ControlC.Higher Prices For Other Goods And ServicesD.Increased Benefits From Pollution ControlE.Better Technology For Producing Other Goods And Services32.A Technological Advance That Improves Pollution Control Methods Would Cause Which Of The Following Changes On The Graph? A Movement FromA.A1 To A2B.C1 To C2C.Q1 To Q2D.Tt1 To Tt2E.0 To C233.Assuming That The Economy Is Operating On The Ppc Tt1, The Benefit Of Increasing Pollution Is Shown On The Graph As A Movement FromA.A2 To A1B.C2 To C1C.Q2 To Q1D.Tt2 To Tt1E.C2 To 034.Operating At Which Point On The Ppc Tt1 Will Result In The Most Environmental Degradation?A.TB.T1C.T2D.A1E.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 S1B.An Output Greater Than 0g Would Improve Resource AllocationC.Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1D.An Output Smaller Than 0g Would Improve Resource AllocationE.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 S1B.An Output Greater Than 0g Would Improve Resource AllocationC.Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1D.An Output Smaller Than 0g Would Improve Resource AllocationE.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.D1B.D2C.S1D.S2E.None Of The Above38.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.D1B.D2C.S1D.S2E.None Of The Above39.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 D2B.D2 To D1C.S1 To S2D.S2 To S1E.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 WillA.Clean All Of Its Discharge Of WastesB.Clean None Of Its Discharge Of WastesC.Spend A0b0 Dollars On Cleaning The DischargeD.Spend A0q0 Dollars On Cleaning The DischargeE.(A) And (D)41.A Tax Of T1 Per Unit On Polluted Discharge Will Induce The Firm ToA.Clean Its Discharge Up To Q1 Units Per Day Rather Than Pay The TaxB.Pay The Tax Rather Than Clean Discharge Up To Q1 Units Per DayC.Clean Its Discharge Exceeding Q1 Units Per Day Rather Than Pay The TaxD.Pay The Tax On All UnitsE.(A) And (D)

42.A Tax Of More Than T1 Per Unit On Polluted Discharge Will Induce The Firm To Clean UpA.Q1B.More Than Q1C.QD.More Than Q But Less Than Q1E.Zero43.A Tax Of M0 Per Unit On Polluted Discharge Will Induce The Firm To Clean UpA.Q1B.More Than Q1C.QD.More Than Q But Less Than Q1E.Zero44.Suppose The Current Tax Is T1 And The Government Wishes To Allow Less Pollution. It ShouldA.Raise The Tax Above T1B.Lower The Tax Below T1C.Shift The Mpc Curve To The LeftD.Shift The Mpc Curve To The RightE.Do None Of The AboveQuestions 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 IsA.$495,000B.$180,000C.$80,000D.$60,000E.$40,00046.The Marginal Social Cost Of The Fourth Unit Of Pollution Control IsA.ZeroB.$30,000C.$90,000D.$100,000E.$120,00047.At The Economically Efficient Level Of Control, MsbA.Equals MscB.Equals $30,000C.Is Lower Than At One Unit Less Pollution ControlD.Is Higher Than At One Unit More Pollution ControlE.Is All Of The Above48.As The Units Of Pollution Control Increase, The Msb Of Controlling Pollution IsA.IncreasingB.DecreasingC.ConstantD.Harder To DefineE.Impossible To Determine49.The Economically Efficient Level Of Pollution Control IsA.10 UnitsB.9 UnitsC.8 UnitsD.4 UnitsE.2 Units

Questions 50 - 54 Refer To The Graph Below.50.Which Curve Is The Firm's Mpb Curve?A.DB.SC.X1D.X2E.None Of The Above51.Given That The Firms Demand And Supply Curves Are D And S, Respectively, Which Curve Is The Msc Curve For The Polluting Firm's Product?A.DB.SC.X1D.X2E.None Of The Above

52.What Is The Equilibrium Quantity Of The Polluting Firm's Product In A Market With No Pollution Regulation?A.Q1B.Q2C.Q3D.0E.It Cannot Be Determined53.What Is The Efficient Quantity Of The Polluting Firm's Product?A.Q1B.Q2C.Q3D.0E.It Cannot Be Determined54.The Value Of Well-Being Lost Due To Over-Production Of The Polluting Firm's Product Is Equal To AreaA.AcdB.AbdC.DegD.DgfE.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.DB.SC.X1D.X2E.None Of The Above56.What Is The Quantity Of The Firm's Product In A Market With No Pollution Regulation?A.Q1B.Q2C.Q3D.0E.It Cannot Be Determined

57.What Is The Efficient Quantity Of The Water-Using Firm's Product?A.Q1B.Q2C.Q3D.0E.It Cannot Be Determined58.The Value Of Well-Being Lost Due To Under-Production Of The Water-Using Firm's Product Is Equal To AreaA.AcdB.AbdC.BedD.DegE.Dgf59.Social Well-Being Would Be Enhanced If Output Of The Water-Using Firm Were ToA.Increase From The Equilibrium OutputB.Decrease From The Equilibrium OutputC.Be Equal To The Equilibrium OutputD.Be Greater Than Q3E.Be Less Than Q160.Those Who Suffer From Pollution May Find It To Their Advantage ToA.Have The Government Enact Legislation Compelling The Polluters To Take Antipollution MeasuresB.Bribe The Polluters To Control Their PollutionC.Have The Government Tax Pollution At A Rate That Increases With The Amount Of Pollution GeneratedD.Do All Of The AboveE.Do None Of The Above

61.The Efficient Level Of Pollution Is Zero Only If TheA.Marginal Cost Of Pollution Control Is ZeroB.Marginal Benefit Of Pollution Control Is ZeroC.Mpb Of Pollution Control Equals MsbD.Mpc Of Pollution Control Equals MscE.Mpc Of Pollution Control Equals Mpb62.Requiring Automobiles To Pass Emissions Tests Before Being Allowed On The Road Is An Example Of A(N)A.Direct Pollution ControlB.Indirect Pollution ControlC.Pollution TaxD.Market Solution To PollutionE.Positive Externality In Consumption63.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 IsA.Above Its Mpc Of Pollution ControlB.Below Its Mpc Of Pollution ControlC.Above The Msc Of Pollution ControlD.Below The Msc Of Pollution ControlE.Reasonable64.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 IsA.Above Its Mpc Of Pollution ControlB.Below Its Mpc Of Pollution ControlC.Above The Msc Of Pollution ControlD.Below The Msc Of Pollution ControlE.Reasonable

65.In A Pollution Rights Market,A.Firms Buy Licenses To PolluteB.Firms Sell Licenses To PolluteC.Environmental Groups Can Reduce Pollution By Buying Licenses To PolluteD.The Government Can Determine The Level Of Pollution By The Number Of Licenses It IssuesE.All Of The Above66.Pollution Rights MarketsA.Have Been Shown To Work In Theory, But Not In PracticeB.Have Never Been Used In The Real WorldC.Are Used Around The World, But Not In The United StatesD.Have Been Used To Reduce Sulfur Dioxide EmissionsE.Have Not Been Effective In Controlling Sulfur Dioxide Emissions67.Direct Or Mandatory Control Imposed By Government On Polluters Presupposes That The Regulatory Body CanA.Determine What The Desirable Limits Of Pollution AreB.Determine Where The Marginal Costs Of Pollution Are GreatestC.Enforce StandardsD.B) And C)E.All Of The Above68.An Advantage Of Direct Regulation As A Method Of Controlling Pollution Is ThatA.The Optimal Level Of Pollution Control Can Be Easily DeterminedB.Pollution Reduction Quotas Can Be Varied To Remove Pollution Where It Is Least CostlyC.Emission Control Standards Can Be Enforced ReadilyD.Changes In The Market Are Automatically Reflected In The RegulationE.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 RiverB.Limit Each Plant To A Maximum Amount Of Pollutant EmissionC.Charge Each Polluter A Fixed Amount For Each Unit Of Pollutant Dumped Into The RiverD.Direct Pollution Control RegulationE.Command And Control Pollution Regulation70.With Tradable Pollution Licenses To Control Pollution, Reductions In Total PollutionA.Can Be Achieved By Having Government Buy Back Some Of The LicensesB.Can Be Achieved By Having Government Sell More LicensesC.Requires The Government To Buy Back All Existing Licenses And Re-Issue New LicensesD.Cannot Be AchievedE.Is Never Economically Optimal71.A Market For Pollution Rights Is An Efficient Approach To Pollution Control BecauseA.It Is Cheap To ImplementB.It Leads To The Complete Elimination Of PollutionC.It Causes The Pollution To Be Eliminated At The Lowest CostD.It Is Easy To EnforceE.None Of The Above72.Production And Consumption In The Cigarette Market Is Too High BecauseA.Producers Do Not Care About The Health Of Their CustomersB.Mpc Is Greater Than The MscC.Mpb Is Greater Than MsbD.Msb Is Greater Than MpbE.Mpb Is Less Than Msb73.When Pollution Is Not Regulated In The Market, Polluting Firms WillA.Under-Utilize Resources And Charge High PricesB.Under-Utilize Resources And Charge Low PricesC.Use The Appropriate Level Of Resources, But Charge High PricesD.Be Very ProfitableE.Over-Utilize Resources And Charge Low Prices

74.For A Tax On Pollution To Be Effective, It Must BeA.Placed On The Firm PollutingB.Greater Than The Cost Of Cleaning-Up The PollutionC.Placed On The ConsumerD.Less Than The Cost Of Cleaning Up The PollutionE.Set At A Reasonable Rate75.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 ElectricityB.Lower Prices For ElectricityC.Electric Companies Shifting To Low Sulfur OilD.A Decrease In The Amount Of Electricity ProducedE.A Shift To Alternative Energy Resources76.If Jim Starts A Landscape Business And Uses A Truck And A Tractor That He Owns To Perform Landscaping Projects, We Can Conclude ThatA.The Costs Of The Truck And The Tractor Are LowB.That The Costs Of The Truck And The Tractor Are Explicit CostsC.There Is No Cost To The Business Since He Owns Both The Truck And The TractorD.That The Costs Associated With Both The Truck And The Tractor Are Implicit CostsE.He Should Ask His Accountant How To Handle The Costs77.When Firms Make Decisions About Output And About The Amount Of Pollution That They Produce, Without Government RegulationA.Firms Only Consider Their Private Benefits And Costs When Making Their ChoicesB.Firms Choose Not To Pollute Because It's Bad For Their Public ImageC.Social Costs Are Always Reflected In The Market Prices Firms Pay For Their InputsD.Pollution Costs Are Passed On To Consumers In The Form Of Higher PricesE.Government Regulation Is Used Only In Command Economies

78.The Use Of Pollution Rights Licenses Can Improve Efficiency And Reduce Pollution SinceA.Pollution Rights Licenses Do Not Improve Efficiency Nor Reduce PollutionB.The Licenses Give Environmental Groups Pollution Reducing PermitsC.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 BeneficialD.Such Licenses Improve Efficiency By Pricing Pollution But The Licenses Do Not Reduce PollutionE.There Is No Amount Of Pollution That Is Desirable Or Efficient

True / False Questions79.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 Questions1.An Immoral Act IsA.Easy To DefineB.Always IllegalC.Different In Different SocietiesD.Defined Consistently Across The United StatesE.All Of The Above2.Illegal Acts AreA.Also ImmoralB.Ones That Society Has Determined That It Is Better Off AllowingC.Designated As Such By The Criminal Justice SystemD.Prevented Once A Law Is PassedE.All Of The Above3.Aggravated Assault Is An Example Of A(N)A.Violent CrimeB.Crime Against PropertyC.Illegal Trafficking Of Goods And ServicesD."Other" CrimeE.None Of The Above4.Arson Is An Example Of A(N)A.Violent CrimeB.Crime Against PropertyC.Illegal Trafficking Of Goods And ServicesD."Other" CrimeE.None Of The Above

5.Prostitution Is An Example Of A(N)A.Violent CrimeB.Crime Against PropertyC.Illegal Trafficking Of Goods And ServicesD."Other" CrimeE.None Of The Above6.Which Of The Following Statements Is Correct?A.Criminal Acts Are Illegal Acts Whether Or Not Those Acts Are ImmoralB.Some Immoral Acts Are Criminal Acts And Some Are NotC.Some Acts Are Criminal Because They Lead To Consequences The Criminal Is Unaware OfD.Some Acts That Might Result In Chaotic Conditions Are Made Criminal By Legislative BodiesE.All Of The Above7.Which Of The Following Exists When An Individual Consumes Benefits From A Public Good But Does Not Pay For Its Cost?A.Free-RidingB.A Negative Externality In ConsumptionC.A Negative Externality In ProductionD.Implicit CostsE.Psychic Costs8.The Free-Rider Problem Refers ToA.Those Who Receive The Benefits Of A Public Good Without Paying A Part Of Its CostB.Those Who Ride Public Transportation Without Paying Their FaresC.Those Who Ride In Rodeos And Do Not Win PrizesD.Jockeys Who Are Not PaidE.None Of The Above

9.Which Of The Following Goods Or Services Is A Public Good?A.Polio ImmunizationB.Stamp CollectionC.A Smoke DetectorD.National DefenseE.A Burglar Alarm10.Government Can Effectively Remedy The Free-Rider Problem ByA.Requiring All Who Receive The Benefits Of A Public Good Or Service To Pay Appropriate Taxes For ItB.Imposing A Tax On Automobiles And All Other Forms Of TransportationC.Eliminating All Forms Of TransportationD.Banning Private Crime Prevention ActivitiesE.None Of The Above11.A Characteristic Of A Public Good Or Service IsA.That No Individual Can Identify Specifically The Part Of It That He Or She ConsumesB.Once The Good Is Provided, It Is Difficult Or Impossible To Exclude Anyone From Using ItC.If It Is Provided Privately, It Generates A "Free-Rider" ProblemD.One Person's Use Does Not Decrease The Quantity Available For OthersE.All Of The Above12.Which Of The Following Is Most Likely A Public Good?A.A College EducationB.A Smoke DetectorC.Smallpox ImmunizationD.Elementary EducationE.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 OfA.The Free-Rider ProblemB.Diminishing Marginal ReturnsC.The Opportunity Cost PrincipleD.Equimarginal PrincipleE.An Immoral Act14.Immunization For Polio Is An Example Of A(N)A.Semi Private GoodB.Public GoodC.Private GoodD.Good Which The Market Will Efficiently ProduceE.Externality In Production15.Which Of The Following Statements Is ?A.The Government In A Private Enterprise Economy Confines Its Production Of Goods And Services To Public GoodsB.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, GoodsC.Governments Of Private Enterprise Systems Leave The Bulk Of Private Goods To Be Produced By Private BusinessesD.Governments Of Private Enterprise Economies Play A Relatively Important Role In The Provision Of Semi-Private GoodsE.None Of The Above16.The Costs Of Resources Used In Crime PreventionA.Are Equal To The Value Those Resources Would Have Provided In Their Best Alternative UseB.Are Equal To The Value Of These Resources In Reducing CrimeC.Can Be Approximated By The Expenditures On Criminal ActivitiesD.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 WhichA.Their Marginal Social Benefit No Longer Exceeds Their Marginal Social CostB.All Crime Is Stamped OutC.All Crimes Against Persons Are EliminatedD.Their Total Gross Benefits Are MaximumE.None Of The Above18.The Marginal Cost Of A Good IsA.The Change In Total Product Associated With The Change In Resource InputsB.The Average Cost Of The ProductC.The Total Cost Of The Good Divided By OutputD.The Change In Total Cost Per Unit Change In OutputE.None Of The Above19.According To The Equimarginal Principle, A City's Crime Prevention Budget Should Be Allocated Such ThatA.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 PunishmentB.Total Benefits Of Crime Prevention Are Equal To Total CostsC.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 PolicewomanD.The Same Number Of Police Officers Patrol Each Square Block At The Margins Of The City's Residential AreaE.The Same Number Of Police Officers Are Used Per Square Block In The City's Suburbs As In Its Downtown Area20.Suppose An Auto Worth $25,000 Is Stolen. The Economic Cost Of This Theft, From Society's Point Of View, Does Not IncludeA.The $25,000 The Auto Is WorthB.The Value Of The Resources Expended By Society Attempting To Capture The ThiefC.The Value Of The Inconvenience Caused To The OwnerD.The Cost Of Resources Used To Reduce Car TheftE.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 ExpandedB.The Msb=Msc And The Level Of Crime Prevention Is OptionalC.The MsbTsc And Crime Prevention Should Be ExpandedE.None Of The Above22.Police Officers Should Be Hired Up To The Point WhereA.The Public Feels Safe In Their HomesB.The Crime Rate Falls To ZeroC.The Benefit Of The Last Officer Hired Is Just Equal To What Its Cost To Hire HerD.The Benefit Of The Last Officer Hired Exceeds The CostE.It Is Not Possible To Tell Without Further Information23.Which Of The Following Is Not An Economic Cost Of Crime? TheA.Lost Earnings Of Victims Of CrimeB.Value Of Property Destroyed By Criminal ActivitiesC.Dollars Spent On Illegal DrugsD.Tax Dollars Spent On Crime PreventionE.Suffering Experienced By Crime Victims24.Economic Analysis Of Crime CanA.Determine What Activities Should Be Considered IllegalB.Determine What The Economic Impact Will Be Of Making Certain Activities IllegalC.Tell Us Which Activities Should Be PunishableD.Tell Us How Much It Will Cost To Eliminate CrimeE.Do All Of The Above

25.Marginal Social Benefits Of Crime Prevention ActivitiesA.Are The Increase In The Value Of Such Activities To The Community Resulting From A One-Unit Increase In Such ActivitiesB.Are Difficult To CalculateC.Usually Decrease With Additional Units Of Those ActivitiesD.Include A Decrease In The Suffering Of Crime VictimsE.All Of The Above26.If Society Receives No Additional Benefit From Increasing Crime Prevention Activities, The Msb Of Crime PreventionA.Equals 0B.Is IncreasingC.Is DecreasingD.Is Equal To The Msc Of Crime PreventionE.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 PatrolsA.IncreasesB.DecreasesC.Equals MsbD.Must Fall Before It Is Efficient To Have More PatrolsE.Are Too High28.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 GuardB.Hire A Police OfficerC.Hire One Guard And One Police OfficerD.Hire A Half Time Guard And A Half Time Police OfficerE.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 CostB.Yes, Because Msb > MscC.No, Because Private Benefits Are Less Than Private CostD.No, Because Mpb < MscE.The Outcome Is The Same Whether You Buy The Alarm Or Not30.Additional Expenditures Should Not Be Made On Police Protection If The Additional Cost Of Police ProtectionA.Is Less Than The Additional BenefitB.Would Increase The Msb Of Fire Protection By MoreC.Is More Than The Change Total Social Benefits As A Result Of The Additional Police ProtectionD.Would Cause A Larger Increase In Total Social Benefits If Spent ElsewhereE.Is All Of The Above31.An Additional Expenditure On Crime Prevention Should Be Allocated To The Activity WhereA.Msb Is GreatestB.Msc Is LowestC.Tsb Is GreatestD.Tsc Is LowestE.Tsc Is HighestQuestions 32 - 36 Refer To The Table Below.

32.The Marginal Social Benefit Of The Third Unit Of Crime Prevention IsA.200B.180C.160D.140E.9033.The Marginal Social Cost Of The Fourth Unit Of Crime Prevention IsA.270B.180C.160D.90E.6034.The Efficient Number Of Units Of Crime Prevention IsA.1B.2C.3D.4E.535.As More Crime Prevention Is Added, The Msb Of Crime PreventionA.IncreasesB.DecreasesC.Becomes Higher Than McsD.Does Not ChangeE.Is More Difficult To Determine36.The Net Benefit Of An Additional Unit Of Crime Prevention To Society Is Highest With How Many Units Of Crime Prevention?A.0B.1C.3D.5E.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 CarsB.2 Police Officers; 6 Patrol CarsC.3 Police Officers; 4 Patrol CarsD.4 Police Officers; 2 Patrol CarsE.5 Police Officers; 0 Patrol Cars38.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 CarsB.2 Police Officers; 1 Patrol CarC.1 Police Officer; 1 Patrol CarD.1 Police Officer; 2 Patrol CarsE.0 Police Officers; 4 Patrol Cars39.The Net Social Benefit Of The Third Patrol Car IsA.$11,000B.$15,000C.$20,000D.$36,000E.$45,000

40.The Total Benefit Of Hiring Three Police Officers IsA.$18,000B.$48,000C.$60,000D.$148,000E.$249,00041.The Net Social Benefit Of Hiring One Police Officer And Buying One Patrol Car IsA.$40,000B.$41,000C.$80,000D.$120,000E.$150,00042.If Abortion Were Made Illegal Throughout The United States,A.The Cost Of Abortion Services Would RiseB.The Quality Of Abortion Services Would Fall And Become Less StandardizedC.The Supply Of Abortion Services Would DecreaseD.The Demand For Abortion Services Would DecreaseE.All Of The Above43.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 TheA.Economies Of Mass ProductionB.Law Of Diminishing ReturnsC.Opportunity Cost PrincipleD.Law Of Comparative AdvantageE.Law Of Demand

44.In Any City With A Given Crime Prevention Budget, Additional Suppression Of ProstitutionA.Will Necessarily Result In UnemploymentB.Is Always Economically And Morally DefensibleC.Is Never Defensible Economically Or MorallyD.Will Usually Be Achieved At The Expense Of An Increase In Other Kinds Of CrimeE.All Of The Above45.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 LiquorB.An Increase In Supply, A Decrease In Price, And An Increase In The Quality Of LiquorC.A Decrease In Supply, An Increase In Price, And No Change In The QualityD.A Decrease In Supply, An Increase In Price, And A Decrease In QualityE.None Of The Above46.If A Law Is Passed Making It Illegal For Unlicensed Barbers To Cut Hair, Which Of The Following Will Result?A.Higher Quality HaircutsB.Higher Priced HaircutsC.Cleaner, More Sanitary Barber ShopsD.Lower Priced HaircutsE.More Barbers In The Trade47.Suppose A Poor Person Steals $10,000 From A Middle Income Person. Economic Analysis Tells Us ThatA.There Is An Economic Loss For The Society As A WholeB.There Is An Economic Gain For The Society As A WholeC.A Public Good Will Usually Be Purchased With The MoneyD.We Cannot Be Sure Whether There Is Economic Gain Or Loss For The Society As A WholeE.The Benefit To The Poor Person Exceeds The Cost To The Middle Income Person48.The Most Likely Economic Effects Of The Legalization Of Marijuana AreA.An Increase In Both Supply And DemandB.A Fall In The Price Of MarijuanaC.An Increase In Marijuana UseD.An Increase In The Quality Of MarijuanaE.All Of The AboveQuestions 49 - 53 Refer To The Graph Below.49.Which Of The Following Shifts Best Represents The Likely Effect Of Legalizing Marijuana?A.D1 To D2B.D2 To D1C.S2 To S1D.D1 To D2 And S1 To S2E.D2 To D1 And S1 To S250.If The Market For Marijuana Changes From Illegal To Legal, Supply WillA.IncreaseB.DecreaseC.Shift To The LeftD.Not Be AffectedE.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 ToA.P1 And Q2B.P2 And Q1C.P3 And Q4D.P4 And Q3E.None Of The Above52.If The Market For Marijuana Changes From Legal To Illegal, Demand WillA.IncreaseB.DecreaseC.Shift To The RightD.Not Be AffectedE.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 QualityB.Less Criminal ActivityC.A Decrease In Resources Needed For Crime PreventionD.All Of The AboveE.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 D2B.D2 To D1C.S2 To S1D.D1 To D2 And S1 To S2E.D2 To D1 And S2 To S155.With Prohibition, Supply In The Market For Beer WillA.IncreaseB.DecreaseC.Shift To The RightD.Not Be AffectedE.Become Flatter

56.With Prohibition, Demand In The Market For Beer WillA.IncreaseB.DecreaseC.Shift To The RightD.Not Be AffectedE.Become Flatter57.Curves D2 And S2 Represent The Market For Beer If It Is Legal. Prohibition Will Cause Equilibrium Price And Quantity To Change ToA.P1 And Q2B.P2 And Q1C.P3 And Q4D.P4 And Q3E.None Of The Above58.In Addition To The Change In Supply, Demand, Price, And Quantity Of Beer, Prohibition Would Have Which Of The Following Effects?A.Improved QualityB.Less Criminal ActivityC.A Decrease In Resources Needed For Crime PreventionD.All Of The AboveE.None Of The Above59.Which Of The Following Would Not Result From The Legalization Of Marijuana?A.A Fall In The Price Of MarijuanaB.An Increase In The Quality Of MarijuanaC.A Significant Increase In The Supply Of MarijuanaD.A Significant Increase In The Demand For MarijuanaE.A Decrease In The Supply Of Marijuana

60.People Choose To Participate In Criminal Activities BecauseA.Their Implicit Costs Are LowB.They Have A Strong, Unrestrained EmotionC.The Probability Of Getting Caught Is LowD.The Potential Return Is HighE.All Of The Above61.Economics Explains The Decision To Participate In Criminal Activities Most Often In The Case OfA.Violent CrimesB.Crimes Of PassionC.MurderD.Trafficking In Illegal SubstancesE.Vandalism62.If You Are Willing To Take A Pay Cut To Live Near A Ski Resort, The Ski Resort Provides You WithA.Free Ski LessonsB.Psychic BenefitsC.Opportunities For AdvancementD.Marginal Social BenefitsE.Marginal Social Costs63.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 ProfitB.Crime "Pays"C.Revenue Plus Psychic Income Exceeds All CostsD.Income More Than Covers Explicit, Implicit, And Psychic CostsE.All Of The Above

64.Which Of The Following Is An Explicit Cost Of An Illegal Marijuana Growing Operation? The Cost OfA.LandB.ElectricityC.Fertilizer And PesticidesD.LaborE.All Of The Above65.Which Of The Following Is An Implicit Cost Of An Illegal Marijuana Growing Operation?A.Foregone Income Due To Time Spent Managing The OperationB.Lost Time If The Manager Is CaughtC.Lost Liberty If The Manager Is JailedD.The Value Of The Time Spent Avoiding DetectionE.All Of The Above66.Which Of The Following Does Not Go Into The Calculation Of The Implicit Cost Of A Marijuana Growing Operation?A.The Probability Of Getting CaughtB.The Severity Of Potential Jail SentencesC.The Time It Takes To Tend The CropD.Payments For Fertilizer And PesticidesE.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 StandingB.UnemploymentC.An Intense Fear Of IncarcerationD.A High Probability Of Getting CaughtE.All Of The Above

68.When An Individual Incurs Costs In The Form Of Negative Personal Satisfaction, The Costs AreA.Opportunity CostsB.Implicit CostsC.Psychic CostsD.Psychic IncomeE.Externalities69.Which Of The Following Increases The Chances That A Person Will Engage In Criminal Activity?A.A High Perceived Probability Of Getting CaughtB.A Low Potential Pay-Off From The CrimeC.The Ability To Restrain EmotionsD.A Low Opportunity CostE.None Of The Above70.When An Individual Receives Benefits From A Business Endeavor In The Form Of Personal Satisfaction, The Benefits Are Known AsA.Opportunity CostsB.Implicit CostsC.Psychic CostsD.Psychic IncomeE.Externalities71.Which Of The Following Will Increase The Implicit Costs Of Committing A Crime?A.Decreased Crime Prevention ExpendituresB.Decreased Probability Of Getting CaughtC.Improved Job OpportunitiesD.More Lenient SentencingE.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 ZeroB.The Crime Is A "Crime Of Passion."C.Their Opportunity Cost Is ZeroD.The Benefit Of The Crime Is InfiniteE.All Of The Above73.Which Of The Following Policies Could Increase The Cost Of Committing Crimes?A.Job Training ProgramsB.Increased Employment OpportunitiesC.Higher Crime Prevention BudgetsD.More Severe PenaltiesE.All Of The Above74.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 LifeB.The Lower Cost Of Living In The CountryC.The Fear Of Crime In The CityD.The Fact That Rural Jobs Are EasierE.None Of The Above75.Job Training Programs, Remedial Education Courses, And Recreational Activities Might Lead To Reduced Crime Rates In Depressed Areas ByA.Providing Jobs To Instructors And CounselorsB.Increasing The Opportunity Costs Of Committing CrimesC.Improving The Public's View Of Their CommunityD.Providing Psychic Income To OrganizersE.None Of The Above

76.An Example Of A Semi-Private Good Would BeA.Measles Inoculation ProgramsB.A Neighborhood Crime Watch GroupC.Talking On A Cell Phone During The Screening Of A MovieD.All Of The Above Are Semi-Private GoodsE.None Of The Choices Are Semi-Private Goods77.Consumer Ratings Of Products Online, Like The Zagat's Restaurant Guide And Epinions Can Be Considered Examples OfA.Private GoodsB.Public GoodsC.Semi-Private GoodsD.Experience GoodsE.Worthless, Since You Don't Know Who Is Doing The Reviewing78.Economists Think That You Can Analyze Why Individuals Commit Crimes BecauseA.Criminals Are Always Trying To Obtain Monetary GainsB.Criminals Weigh The Costs And Benefits Associated With The Costs Of Committing A CrimeC.Crime Has Costs To SocietyD.All Of The AboveE.It Is Not Possible To Analyze The Commission Of Crimes Using Economic AnalysisTrue / False Questions79.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.