Question 1
What is an externality in economics?
Question 2
Which of the following is the best example of a negative externality?
Question 3
Which of the following is the best example of a positive externality?
Question 4
In the case of a negative externality, the market quantity is usually compared with the socially optimal quantity. Which statement is correct?
Question 5
What is the main purpose of a corrective tax, such as a Pigouvian tax, in the presence of a negative externality?
