Transcript Slide 1

ENVR 210
CLICKER QUESTIONS
Chapter 10 – Question Set #1
The term market failure refers to
1.
2.
3.
4.
a market that fails to allocate
resources efficiently.
an unsuccessful advertising
campaign which reduces demand.
ruthless competition among firms.
a firm that is forced out of
business because of losses.
25%
1.
25%
2.
25%
3.
25%
4.
An externality arises when a person engages in an
activity that influences the well-being of
1.
2.
3.
4.
buyers in the market for that activity and yet
neither pays nor receives any compensation
for that effect.
sellers in the market for that activity and yet
neither pays nor receives any compensation
for that effect.
bystanders in the market for that activity and
yet neither pays nor receives any
compensation for that effect
Both (a) and (b) are correct.
25%
1.
25%
2.
25%
3.
25%
4.
A positive externality arises when a person engages in an
activity that has
1.
2.
3.
4.
an adverse effect on a bystander who
is not compensated by the person who
causes the effect.
an adverse effect on a bystander who
is compensated by the person who
causes the effect.
a beneficial effect on a bystander who
pays the person who causes the effect.
a beneficial effect on a bystander who
does not pay the person who causes
the effect.
25%
1.
25%
2.
25%
3.
25%
4.