1-The Case in Point on Externalities, Cigarettes, and Smoking suggests that smokers generate:
a-external benefits to society by dying early, thereby subsidizing the retirement costs of the rest of the population.

b-external costs to society by dying early, thereby subsidizing the retirement costs of the rest of the population.

c-net costs to society.

d- external costs that are greater than the external benefits they generate

2-Activities of consumers and firms:
a-have benefits but not costs.

b-have costs but not benefits.

c- have both costs and benefits.

d-are too complex to be analyzed with economic theory.

3-If the price of popcorn is $0.50 per box and the price of peanuts is $0.25 per bag, and you have $5 to spend on both goods, the maximum quantity of peanuts that you can purchase is _______ bags.
a-5

b-10

c-20

d-40

4-Suppose that external costs are not fully reflected in the market price of a good. This is an indication of market:
a-failure.

b-equilibrium.

c-efficiency.

d-optimality.

5-A private good is a good or service for which exclusion:
a-is possible and for which marginal cost of an additional user is zero.

b-is possible and for which marginal cost of an additional user is positive.

c-cannot be applied and for which marginal cost of an additional user is zero.

d-cannot be applied and for which marginal cost of an additional user is positive

6-An example of a resource for which no property rights exist is a:
a-cow.

b- whale.

c- chicken.

d-goldfish