Start learning →

AP Microeconomics Negative Externalities — practice questions

Explore 23 free Negative Externalities questions in AP Microeconomics Economics. Open each question or exercise to read its content, reference answers and available explanation.

Practise Negative Externalities with Quill →

Negative Externalities questions and exercises with answers

Showing questions 1–23 of 23.

The effect of a market exchange on a third party outside the exchange is called an:Read the answer and worked solution →Because they affect parties beyond those involved, externalities are sometimes called:Read the answer and worked solution →Loud music you hate wafting into your house every night is given as an example of a:Read the answer and worked solution →Music you love reaching you free every night is given as an example of a:Read the answer and worked solution →Economists commonly refer to externalities as an example of:Read the answer and worked solution →A tax imposed on the quantity of pollution that a firm emits is a:Read the answer and worked solution →Social costs are described as the private costs of production plus:Read the answer and worked solution →Firms may fail to take social costs like pollution into their planning if they do not have to:Read the answer and worked solution →Requiring a firm to pay 100 dollars for external pollution costs per refrigerator makes the supply curve:Read the answer and worked solution →The supply curve that accounts for the additional external costs is labelled:Read the answer and worked solution →Taking external pollution costs into account results in a price that is:Read the answer and worked solution →Taking external pollution costs into account results in a quantity of production that is:Read the answer and worked solution →Laws specifying allowable pollution quantities and required control technologies fall under:Read the answer and worked solution →Which three categories are named as the market-oriented approaches to pollution control?Read the answer and worked solution →Permits are described as marketable, which means that firms can:Read the answer and worked solution →Externalities count as market failure because markets consider social costs that are:Read the answer and worked solution →Comparing the private and social supply curves, the social curve for a polluting firm lies:Read the answer and worked solution →A pollution charge differs from command-and-control regulation because the charge:Read the answer and worked solution →Match each externality termRead the answer and worked solution →Tap the market-oriented toolsRead the answer and worked solution →True or false: externalitiesRead the answer and worked solution →Work the external costRead the answer and worked solution →Complete the externality storyRead the answer and worked solution →

Worked practice questions

The effect of a market exchange on a third party outside the exchange is called an:

  1. Externality
  2. Elasticity
  3. Equilibrium
  4. Endowment
Show answer and solution

Correct answer: A. Externality

1. Some effects of a trade fall on people who were not part of it. 2. A market exchange can affect a third party who is outside the exchange. 3. That third party is external to the exchange. 4. Such an effect is called an externality. _Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 12 'Environmental Protection and Negative Externalities'_

Open this question →

Because they affect parties beyond those involved, externalities are sometimes called:

  1. Subsidies
  2. Spillovers
  3. Surpluses
  4. Shortages
Show answer and solution

Correct answer: B. Spillovers

1. Externalities have a second, more everyday name. 2. Externalities occur in market transactions. 3. They affect other parties beyond those involved in the transaction. 4. For that reason they are sometimes called spillovers. _Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 12 'Environmental Protection and Negative Externalities'_

Open this question →

Loud music you hate wafting into your house every night is given as an example of a:

  1. Negative externality
  2. Positive externality
  3. Marketable permit
  4. Pollution charge
Show answer and solution

Correct answer: A. Negative externality

1. The same spillover can be good or bad depending on who receives it. 2. A neighbour's music reaches a third party outside the exchange. 3. If you hate country music, having it waft into your house would be a negative externality. 4. Whether it is negative depends on the effect on that third party. _Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 12 'Environmental Protection and Negative Externalities'_

Open this question →

How to practise

  1. Choose a Negative Externalities question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
  3. Continue in the app for bite-sized lessons, explanations and review with Quill. You can start without creating an account.

More Economics topics

Consumer ChoicesLabor Markets and IncomeMonopolistic Competition and OligopolyPositive Externalities and Public GoodsProduction, Costs and Industry StructureMonopolyChoice in a World of ScarcityElasticity