Assume the following:• market quantity < socially desirableThe inequality above describes which of the following?O a. Budget SurplusO b. Positive Externalityc. Budget Deficitd. Negative ExternalityQUESTION 6In order to internalize a negative externality the government should implement aO a.subsidyb. free for allc. bidding ward. taxQUESTION 7In order to internalize a positive externality the government should implement aa. minimum wageb. taxc. subsidyd. spoils system QUESTION 10Which of the following types of firms are likely to respond to a corrective tax by reducing their pollution emissions?a. Firms with high abatement costsb. Firms that love the environmentc. Firms that want a boost to their public imaged. Firms with low abatement costsQUESTION 11In a tradable pollution permits system which of the following types of firms are likely to do most of the pollution reduction?a. Firms with high cost of reducing pollutionb. Firms with low cost of reducing pollutionc. Firms that pay low wagesd. Firms that pay high wagesQUESTION 12Which of the following argues for private solutions to externalities?Oa. Pigovian Theoremb. Coase TheoremC. Smith TheoremOd Folk Theorem.

Externalities are side effects of economic activities which are faced by the third parties. The…

Answered: Assume the following: • market quantity…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

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Assume the following: • market quantity < socially desirable The inequality above describes which of the follow O a. Budget Surplus O b. Positive Externality