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Exam 10: Externalities

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Question 81

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If the marginal social cost of producing a ton of cement is $4,000 and the marginal private cost is $3,500,then the

A) marginal benefit of a ton of cement will equal $4,000.
B) total cost of producing a ton of cement is $7,500.
C) marginal external cost of producing a ton of cement is $500.
D) marginal external cost of producing a ton of cement is $7,500.
E) marginal external cost of producing a ton of cement is $4,000.

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Question 82

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-The figure above shows the market for private elementary school education in Chicago.There is no external cost of private elementary education.If the government does not intervene in this market,the equilibrium number of students being privately educated is

A) 0 students.
B) 200 students.
C) 400 students.
D) 600 students.
E) None of the above answers is correct.

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Question 83

Multiple Choice

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When production of a good results in an external cost,the unregulated competitive market equilibrium quantity is

-The figure above shows the market for college education.Left to itself without any government intervention,a competitive market would create a deadweight loss equal to

-The figure above shows the market for annual influenza immunizations the United States.If the government intervenes in the market and provides a $10 subsidy to providers of immunizations,the number of people immunized is ________.

-The figure above shows the market for annual influenza immunizations the United States.If there is NO external benefit from health care and the government does not intervene in the market,then the equilibrium price of immunizations is

An example of someone bearing the burden of a negative consumption externality would be

Why is it not efficient to eliminate all pollution?

-The figure above shows the costs and benefits associated with producing paper.What is the efficient level of output?

-The figure above shows the market for private elementary school education in Chicago.There is no external cost of private elementary education.If the government does not intervene in this market,the deadweight loss equals

The figure above shows the demand for college education (D) , the marginal social benefit of college education (MSB) , and the marginal cost of the private schools (MC) . -In the figure above,suppose a subsidy is provided to private colleges.What amount of subsidy will ensure the efficient number of students?

The marginal social cost of producing a good or service is the

-The table above gives the marginal social cost (which equals the price),marginal private benefit,and marginal social benefit of students attending Diablo Valley College (DVC)in Concord,California. a.When 4,500 students attend DVC,what does the marginal external benefit equal? b.If the market is competitive and left without government intervention,what is the quantity of students that will attend DVC and what will be the price of a course? c.What is the efficient quantity of students attending DVC? d.If the government can set the price per course,in order to have the efficient quantity of students attending DVC,what should the government set as the price?

A loud band plays a concert late at night in a neighborhood park.The noise produced by the band that keeps the neighbors not attending the concert awake is

-The figure above shows the market for private elementary school education in Chicago.There is no external cost of private elementary education.If the government does not intervene in this market,the equilibrium number of students being privately educated is ________ and the efficient quantity is ________.

When the production of a good has a marginal external cost,which of the following occurs in an unregulated market? i.Overproduction relative to the efficient level will occur. ii.The market price is less than the marginal social cost at the equilibrium quantity. iii.A deadweight loss occurs.

A noisy party that keeps neighbors awake is an example of a

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 100 billion kilowatt hours are produced is

Which of the following is true?

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market,the number of immunizations per year is ________ and the efficient number of immunizations per year is ________.