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"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

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Unit 5 Self-Quiz

Unit 5 Self-Quiz

Q 1.Private rates of return is when the estimated rates of return go primarily to society; for example, providing free education. 2.Benefits of a cleaner environment are_________________________. 3.Nonexcludable is when it is costly or impossible to exclude someone from using the good, and thus hard to charge for it. 4.Which one is an example of a positive externality? 5.An externality occurs when an exchange between a buyer and seller has an impact on a third party who is not part of the exchange.

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1. b. False 2. a. People may stay healthier and live longer; Certain industries that rely on clean air and water may benefit; Property values may be higher; and People may simply enjoy a cleaner environment in a way that does not need to involve a market transaction 3. a. True 4. c. None of the above (a. Air pollution caused by a manufacturing plant that is harmful to the community b. Water contamination of rivers from runoffs of animal waste ) 5. a. True