Government Policies

Practice Questions

AP Microeconomics › Government Policies

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1

Which of the following is true of public goods?

2

Which of the following is true of public goods?

3

To establish a socially optimal price for a natural monopoly, the government should select the price level at which ________________.

4

To establish a socially optimal price for a natural monopoly, the government should select the price level at which ________________.

5

Which government policy is typically used to correct a negative externality?

6

Which government policy is typically used to correct a negative externality?

7

For years a factory has been producing waste that it dumps into a nearby river. This waste negatively affects fishermen nearby. What government policy is most likely to get the factory to produce at the socially optimum level?

8

For years a factory has been producing waste that it dumps into a nearby river. This waste negatively affects fishermen nearby. What government policy is most likely to get the factory to produce at the socially optimum level?

9

For years, producers in a perfectly competitive industry have been pumping waste into the air without penalty. If the government takes action to shift production to a more socially optimal level, what is the likely effect on equilibrium price and quantity in the market?

10

For years, producers in a perfectly competitive industry have been pumping waste into the air without penalty. If the government takes action to shift production to a more socially optimal level, what is the likely effect on equilibrium price and quantity in the market?

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