Free CIMAPRA17-BA1-1 Exam Braindumps (page: 50)

Page 50 of 118

Which of the following is NOT a characteristic of a pure public good?

  1. It is not possible to exclude non-payers from enjoying the good
  2. It is always provided by the state or public sector
  3. It does not get used up by more people enjoying it
  4. It has no price

Answer(s): B



If a government, on grounds of economic efficiency, were to levy a tax on an industry because of the pollution caused by production in the industry, the tax should be equal to

  1. the amount required to eliminate consumer demand for the product
  2. the excess profits earned by the industry
  3. the costs of clearing up previous pollution caused
  4. the difference between the private and social costs of production

Answer(s): D



If the production of a good is characterized by significant external social costs, resource allocation can be improved by the government:

  1. imposing an indirect tax on the good
  2. paying a subsidy to the producers of the good
  3. paying a subsidy to the consumers of the good
  4. increasing the tax on the profits of the producing firms

Answer(s): A



The main purpose of government competition policy is to

  1. Prevent mergers between large companies
  2. Restrict anti-competitive behavior by firms
  3. Limit the ability of firms to secure long run excess profits
  4. Enforce competition by breaking up large firms

Answer(s): B



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