Exam 15: Public Goods, Externalities, and Government Behavior

Which of the following describes the idea that private negotiations between people will lead to an efficient resolution of externalities, regardless of who has the property rights, as long as the property rights are defined?

The marginal benefit from consumption of a good as viewed by a private individual is called marginal

Which of the following properly contrasts market and government incentives?

The regulations and restrictions that a government uses to correct market imperfections are called

Ronald Coase pointed out that in some cases people can eliminate externalities themselves, without government assistance.

In order to determine the quantity of a government-provided service that should be produced, one should consider the

Exhibit 15-3 -Exhibit 15-3 shows the preference rankings of voters Tom, Dick, and Harry for policies A, B, and C . If an election were held between policy A and policy C, which voter or voters would vote for policy A?

Internalizing a negative externality causes market supply to increase.

An example of a positive externality is when

When the external benefits in a market are taken into account, the good's price is higher and the amount bought and sold is greater.

Emission taxes have an advantage over taxes on production in that

A tax on a good with a negative externality increases the marginal private cost.

Special interest groups generally lobby government in order to gain or maintain some sort of special treatment.

Information has the features of a(n)

A government-granted license to pollute that can be bought and sold is called a(n)

In a competitive market with a negative externality, firms produce an

The negative effect of cigarette smoking on a smoker is an externality.

The voting paradox is a reason for government failure.

A direct survey regarding the willingness of consumers to pay for a project that may benefit them is called a

An example of an international negative externality is when