Explain why Economists believe that a market based solution to the problem of negative externalities is preferred to a “blunt” government tax

$10.00

Which of the following types of carbon reduction policies is generally preferred by economists?

 

SKU: solviv6

MULTIPLE CHOICE QUESTIONS

Q1 The GDP gap refers to the difference between:
a) full-employment Real GDP and Nominal Real Real GDP chain price index
b) unemployment rate and the Real GDP
c) full-employment Real GDP and the actual Real GDP
d) discouraged workers and actual Real GDP

 

Q2 Which of the following types of carbon reduction policies is generally preferred by economists?
a) compulsory use of green energy
b) subsidies for solar and wind power
c) a tax on petrol and diesel fuel
d) a carbon trading scheme

 

Q3 The Super Profits Tax is:
a) a tax on the economic profits earned in extractive industries
b) a tax on the full economic costs earned in the mining industry
c) a tax on some economic profits earned in all industries
d) a tax on the economic costs and benefits created in extractive industries

 

Q4 Structural unemployment is caused by
a) structural changes in the business cycle
b) shifts in the economy that make certain job skills obsolete
c) the impact of the business cycle on job opportunities
d) short term changes in the economy

 

Q5 Unemployment due to a recession is
a) involuntary unemployment
b) cyclical unemployment
c) structural unemployment
d) frictional unemployment

 

Q6 The term “full employment” means
a) both structural and cyclical unemployment are zero
b) all people who want jobs have them
c) cyclical unemployment is zero
d) all of the above

 

Q7 In a country with a population of 40 million, there are 20 million employed and 4 million unemployed. The labour force is
a) 20 million
b) 19 million
c) 24 million
d) 10 million

 

Q8 Using the same numbers as in Q7, what is the unemployment rate?
a) 5.0%
b) 16.7%
c) 10.0%
d) 20.0%

 

Q9 The business cycle occurs from:
a) changes in industry demand
b) changes in local supply and taxes
c) changes in weather a factor affecting supply
d) changes in the costs of production and total spending

 

Q10 The phase in the business cycle where there is a decline in the economy’s Real GDP persists fo least 6 mths is known as :
a) a depression
b) a recession
c) a downtick
d) disequilibrium
 

SHORT ANSWER QUESTIONS

Q1 Define the terms i) “unemployed” ii) “discouraged worker” iii) “unemployment rate”. Describe the different types of unemployment. Which type do you think is the most serious and why?

 

Q2 Define the term “inflation “.
Given the following price levels for several years for the economy of
Nirvana calculate the inflation for Year 2, 3, 4.
Price level year 1 = 107.5, Year 2 = 113.1, Year 3 =115.9, Year 4 = 123.4.
Describe both the cause and the effect of i) “Demand-Pull” inflation and ii)”Cost-Push” inflation. Use diagrams to assist your answer.

 

Q3 Define the term “externalities”.. Why are “externalities” regarded as a form of market failure? Give an example of a negative externality and a positive externality. Explain why Economists believe that a market based solution to the problem of negative externalities is preferred to a “blunt” government tax.

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