FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Externalities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Suppose each person in a community had to pay for his or her own education from kindergarten through high school.One would expect that:

A) less education would be acquired, since society has not considered the positive external benefits of education.
B) more education would be acquired, since society has not considered the positive external benefits of education.
C) the optimal amount of education would be acquired by community members, since they each paid for the amount of education they wanted.
D) a Pigouvian tax would ensure the optimal amount of education.

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

The marginal benefit received from pollution is less than its marginal cost in the market for highly polished glass.In this situation:

A) firms in the market produce the socially optimal level of pollution.
B) society's well-being cannot be improved by changing the quantity of pollution.
C) firms in the market produce too much pollution.
D) firms in the market produce too little pollution.

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

Positive externalities are:

Externalities exist when individuals impose costs or confer benefits on others but don't have an incentive to take those costs or benefits into account.False

Figure: MSB and MSC of Pollution (Figure: MSB and MSC of Pollution) The figure MSB and MSC of Pollution shows the marginal social cost and marginal social benefit of pollution.What level of pollution would be emitted in a market economy without government regulation?

Figure: Pollution and Efficiency (Figure: Pollution and Efficiency) Look at the figure Pollution and Efficiency.In this market, where sulfur emission is a result of production, an efficient solution is one in which:

Suppose the production of roses generates a positive externality in that travelers enjoy the scenic rural vistas.Then the market price of roses:

Figure: MSB and MSC of Pollution (Figure: MSB and MSC of Pollution) The figure MSB and MSC of Pollution shows the marginal social cost and marginal social benefit of pollution.What level of pollution represents the socially optimal level?

Suppose the production of DVDs generates sulfur dioxide, an air pollutant.Then the market price for DVDs:

If government officials set an emissions tax too low:

If the number of available tradable emissions permits is decreased, the equilibrium price of the permits and the equilibrium quantity of emissions _.

Suppose government officials have set an emissions tax to reduce pollution.Further suppose that with the emissions tax, the marginal social cost of pollution exceeds the marginal social benefit of pollution.The emissions tax is:

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.If the government imposed an environmental standard that did not allow the quantity of pollution to exceed 40 tons, there would be:

(Table: Externalities from Parks) The table Externalities from Parks shows the marginal social benefit and the marginal social cost of preserving various amounts of land in a city for a public park.Without government intervention, the amount of land dedicated to the public park will be acres.

Since talking while driving generates a negative externality, banning talking while driving would be economically efficient.True

Figure: Negative Externalities and Raising Pigs for Pork (Figure: Negative Externalities and Raising Pigs for Pork) Refer to the figure Negative Externalities and Raising Pigs for Pork.If the marginal external cost of raising a pig for pork is $200, then the socially optimal quantity of pigs to raise is and The socially optimal price is _.

A familiar example of a negative externality is loud music on a college campus.In principle, it should be possible to internalize this externality by permitting students to negotiate about rights to play music during particular time periods.The most likely reason that this does not happen is that:

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.A Pigouvian tax of $10 will result in a quantity of pollution for which the:

Figure: Model of a Competitive Market (Figure: Model of a Competitive Market) Given the figure Model of a Competitive Market, if there are external costs, a tax imposed on sellers will:

The proposition that if bargaining is costless, then the market can achieve an efficient outcome is the: