Reference no: EM132684074

QUESTION 1

1. Alternative approaches for reducing carbon dioxide emissions are burning low carbon coal and deforestation.

carbon taxes and carbon scrubbing.

carbon taxes and carbon trading.

carbon trading and carbon subsidies.

QUESTION 2

1. The Coase Theorem asserts that

if trade in an externality is possible and there are low transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights.

Bargaining between the parties to an external cost of production can never lead to an efficient market solution to deal with the externality.

there is no solution to the problem of market externalities

the government must always directly intervene with a command and control policy to deal effectively with a negative externality such as pollution.

QUESTION 3

1. Which of the following displays these two characteristics: nonrivalry and nonexcludability in consumption?

quasi-public goods

common resources

public goods

private goods

QUESTION 4

1. Which of the following is not an advantage of risk pooling?

Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services.

It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy.

It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals.

By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection.

QUESTION 5

1. The cost of group health insurance is lower than if an individual buys a policy on his own because

insuring a group eliminates the problem of buyers having more information than the seller.

moral hazard costs of a group tend to move to a low average.

it is easier for the company to deny claims from a large group.

the problem of adverse selection is reduced.

Attachment:- Econ Test questions and attemp.rar