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    Negative Externalities Definition

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    Please check my answers:

    A negative externality:
    a. is any cost above the economic cost
    b equals the social cost plus the firm's private cost.
    c. is an uncompensated cost imposed by an individual or firm on others
    d. equals the opportunity cost minus the social costs.
    My answer is I think it is A

    With tradable emissions permits, the price of the permit is determined by
    a. the government.
    b. the supply and demand of permits.
    c. environmental protection organizations
    d. the World Trade Organization.
    My answer is A ( governments often limit pollution with environment standards)

    The two principles of tax fairness are:
    a. the minimize distortions principle and the maximize revenue principle
    b. the benefits principle and the ability-to-pay principle.
    c. the proportional tax principle and the ability-to-pay principle.
    d. the equity principle and the efficiency principle.
    My answer is C

    The structure of the U.S. federal income tax system reflects the:
    a. tax-efficiency principle.
    b. ability-to-pay principle
    c. benefit principle
    d. lump-sum tax principle
    my answer is b

    Which of the following transactions represents a transfer payment
    a. The government pays an employee by making a direct transfer to the employee's bank account.
    b. An army officer, paid by the government, transfers part of the money he receives back to the government to pay his taxes.
    c. A senior citizen receives a social-security payment.
    d. All of the above.

    My answer is d

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    Solution Preview

    Negative externalities are uncompensated costs imposed upon individuals who are not directly involved in a good's production or consumption.

    With pollution permits, the government has already limited pollution by the number of permits it issues (pollution is limited to number of permits times each permit ...