If a chemical factory causes noxious fumes to be emitted in the neighborhood, a third party would ...

If a chemical factory causes noxious fumes to be emitted in the neighborhood, a third party would be:
 a. workers at the factory.
  b. factory managers.
  c. chemical customers.
  d. local homeowners.
  e. owners of the factory.

QUESTION 2

Unintended costs that are imposed in third parties as a result of an economic activity are called:
 a. marginal costs.
  b. direct costs.
  c. negative externalities.
  d. positive externalities.
  e. positive costs.

QUESTION 3

In the presence of positive externalities, a free market will choose a price which is too ____ and produce an output which is too ____ compared with the social optimum.
 a. high; low
  b. low; low
  c. high; high
  d. low; high
  e. marginal; inequitable

QUESTION 4

The government would use production taxes to remedy the problem of substantial:
 a. internal benefits of production.
  b. external benefits of production.
  c. external costs of production.
  d. external benefits of consumption
  e. external costs of consumption.

QUESTION 5

The possibility of a free rider exists:
 a. in the presence of external costs and benefits.
  b. only in the presence of external costs.
  c. only in the presence of external benefits.
  d. only in the presence of internal costs.
  e. only in the presence of a government-produced good.