Question

1. If a coal-powered electrical generator discharges smoke into the air and causes uncompensated costs and discomfort to residents of a town, then this electrical generation has a(n):

negative externality

positive externality.

specific tax.

quasi-public good.

2. The licenses that are exchanged and that enable the holder to pollute up to a specified amount during a given period are called (from our class discussion about pollution):

tradable emissions permits.

environmental standards.

emissions taxes.

Pigouvian taxes.

3. A _____ in a person’s income will _____ consumer purchasing power, leading to a(n) _____ in consumption of _____ goods.

fall; decrease; decrease; inferior

rise; increase; decrease; normal

fall; decrease; increase; inferior

rise; increase; increase; inferior

4. According the law of diminishing returns:

The total product falls as more units of a variable factor are added to a fixed factor

The marginal product of a variable factor eventually falls as more units of it are added to a fixed factor

Marginal product falls as more units of an input is used

The marginal product eventually increases as more units of a variable factor are added to a fixed factor

5. Suppose a firm's short-run production function is given by Q = 26L^{0.026 "}What is the marginal product of the fourth worker?"

0.231

0.171

0.201

0.141

Answer 1

1) if a coal powered electrical generator discharges smoke into the air and causes uncompensated cost and discomfort to residents of a town then this electrical generation has a negative externality Because of the negative effects it has.

Hence, first option is correct

2) the licences that are exchanged and that enable the holder to pollute up to a specified amount it during a given period are called tradable emission permits. This permits can be traded in the market for emission permits.

Hence, first option is correct.

3) A fall in a person's income will decrease consumer purchasing power leading to an increase in the consumption of inferior goods.

Hence, third option is correct i.e, fall; Decrease ; Increase; Inferior.

4) according to the law of of diminishing Returns the marginal product of a variable factor eventually falls as more units of it are added to a fixed factor.

Hence, second option is correct.

5) Marginal Product of a Worker= 26(0.026)L^{​​​​​​–0.974}

Marginal Product of Fourth Worker= 26(0.026)(4)^–0.974

Marginal product of Fourth Worker= 0.171

Hence, second option is correct.