1 .		Marginal social cost =     marginal private cost - marginal damage cost.   marginal revenue - marginal private cost.   marginal private cost + marginal damage cost.   marginal revenue - marginal damage cost.
2 .		When a person gets a flu shot, it reduces the probability that other people will get the flu. This is an example of:     an external cost.   an external benefit.   overproduction.   a public good.
3 .		In order to internalize an external cost, a tax must cause the marginal private cost to:     shift down.   equal the marginal social cost.   be zero.   become flat.
4 .		The Coase theorem states that an externality problem can be solved:     with negotiation, if rights are clear and negotiation costs are low.   with a tax that is equal to the marginal damage cost.   by increasing the cost of the producer.   only when there are large numbers of people involved.
5 .		For the people who are sitting on a beach, the sunrise over the water is:     a moral hazard.   an external benefit.   a nonrival good.   an external cost.
6 .		In the adverse selection example of used cars, we would expect that, in the long run,     all used cars will be bad cars.   half of the used cars will be bad and half will be good.   all of the used cars will be good cars.   everyone who wants to sell a good used car will be able to sell one, but everyone who wants to sell a bad used car will not be able to sell their car.
7 .		Arrow's impossibility theorem states that it is impossible for:     government to do the optimal thing.   a system to take everyone's preferences together and make consistent choices.   majority rule to ever represent the wishes of the society.