Question

13. Which of the following is an example of economic output that can injure the environment?

a. gold mine discharging arsenic into a natural lake it’s using for a tailings pond

b. paper mill discharging raw chemical waste into a river

c. excessive clear cutting of wood resources by logging companies

d. radio-active waste leaking into a river, and all of the above

14.  Game Theory is the The branch of mathematics used by economists to analyze situations in which players must make decisions and then receive payoffs.

True or False

15. In acknowledging that there are negative externalities of economic actions, we make the first attempt to agree that there are extra costs of economic activities, that we traditionally do not include. This leads to the shifting of the market supply curve to the right.

True or False

16. Barriers to Entry include, patents, and exclusive access to certain inputs.

True or False

Answer 1

13. d. radio-active waste leaking into a river, and all of the above.

All of the above given scenarios are examples of economic output leading to environmental pollution.

14. True

Game theory, branch of applied mathematics that provides tools for analyzing situations in which parties, called players, make decisions that are interdependent. This interdependence causes each player to consider the other player's possible decisions, or strategies, in formulating his own strategy. Payoff is the value associated with a possible outcome of a game.

15. False

Negative externalities produce social costs. Social costs are costs that include both the private costs incurred by firms and also additional external costs incurred by third parties outside the production process. The social cost curve lies leftward to the private cost curve, that is, the market supply curve shifts to the left (decreases) when negative externalities are taken into account.

16. True

Barriers to entry describe the existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Patents and exclusive access to certain inputs makes it tough for new entrants to enter the industry since they must pay very high costs to acquire these.