Exam 17: Externalities and the Environment

A private cost is a cost of production that is borne by the

The Atlantic City Expressway is a highway that runs from outside Philadelphia to Atlantic City, New Jersey. It is notoriously congested during the summer weekends when many people are driving to the beach about the same time. The marginal private cost for a driver of driving on the Expressway includes I. the cost of gasoline. II) the cost of increasing congestion for everyone else.

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the equilibrium output will be

The cost of producing one more unit of a good or service that is paid by the producer

-The table above describes the market for paper. The production of paper produces pollution. There are no external benefits. What amount of tax per ton of paper is necessary to produce the efficient quantity of paper?

-In the figure above showing the costs and benefits of paper production, there is an

Keeping in mind the Coase theorem, in the figure above, if the residents of the town own the lake, the market does what?

When external costs are present and the government imposes a tax equal to the marginal external cost, then

When producers are hard to monitor and marginal costs differ across producers, ________ are an effective method to achieve efficient use of a ________.

-In the figure above, if the market is unregulated,

A common resource is used efficiently if marginal social benefit equals marginal social cost.

-The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. There is a marginal external ________ of ________ per ton.

Resources are efficiently utilized when production is such that marginal social benefit

-The figure above shows the costs associated with producing paper. When paper is produced, there is some pollution runoff into a lake. If paper production is 4 tons per week, the outcome is ________.

Which of the following is an example of an external cost?

With marketable permits to pollute, efficiency can be obtained if

Keeping in mind the Coase theorem, in the figure above, if the pesticide factories own the lake, the market does what?

To achieve the efficient amount of use of a common resource, the use should be such that ________ equals ________.

For a common resource, the marginal private benefit of the resource is greater than the marginal social benefit.

-The figure above provides information for a factory that produces chemicals that pollute a waterway. The waterway is used by water skiers. The efficient quantity of chemicals to produce is ________ tons of chemicals a week.