Question

1.Legal rules that establish what things a person can control and the conditions under which such use or control may be exercised are called _____.

A. choices

B. demand conditions

C. supply conditions

D. property rights

2. Which of the following is not an externality?

A. The emissions caused by your new sports car

B. The enjoyment you derive from having bought a sports car at what you feel is a bargain price

C. The jealousy felt by your neighbor at seeing your sports car

D. The increased risk of an accident to others caused by your high-speed driving on the freeway

3. Public goods suffer from the _________ problem and the __________ problem

A. free-rider; exclusion

B. free-rider; assurance

C. rivalry; exclusion

D. rivalry; assurance

4. The term externalities refers to which of the following?

A. The activities of third parties in the market place

B. The activities of external forces outside our national boundaries

C. Activities that impose costs or benefits on third parties.

D. Outsourcing

Answer 1

1) D. property rights
These define the law under which property can be held

2) B.
Externality is caused/felt by a third party

3) A
public goods are non-rival and non-excludable

4) C
like pollution due to vehicles