Question 1

The Coase theorem says that, if the appropriate property right is assigned to ____, an efficient solution to an externality problem will be achieved.

Accepted Answer

A)  the party causing the externality 
B)  the victim of the externality 
C)  the party that can avoid the externality at the higher cost 
D)  either one of the parties involved 
A)  the party causing the externality 
B)  the victim of the externality 
C)  the party that can avoid the externality at the higher cost 
D)  either one of the parties involved

Question 2

In order to increase society's total welfare (social efficiency), a production process that produces a negative externality should be:

Accepted Answer

A)  taxed. 
B)  provided by the government. 
C)  ignored. 
D)  subsidized. 
A)  taxed. 
B)  provided by the government. 
C)  ignored. 
D)  subsidized.

Question 3

Negative externalities:

Accepted Answer

A)  are found only in large cities. 
B)  occur whenever individual health is harmed in the production process. 
C)  impose most of their costs directly on consumers of polluting processes. 
D)  impose most of their costs on individuals other than consumers of the polluting product. 
A)  are found only in large cities. 
B)  occur whenever individual health is harmed in the production process. 
C)  impose most of their costs directly on consumers of polluting processes. 
D)  impose most of their costs on individuals other than consumers of the polluting product.

Question 4

Firms that emit toxins into the air:

Accepted Answer

A)  underproduce because the private cost of production exceeds the social cost. 
B)  overproduce because the social cost of production exceeds the private cost. 
C)  produce the same as nonpolluting firms. 
D)  produce at the socially optimal amount. 
A)  underproduce because the private cost of production exceeds the social cost. 
B)  overproduce because the social cost of production exceeds the private cost. 
C)  produce the same as nonpolluting firms. 
D)  produce at the socially optimal amount.

Question 5

Which of the following offers the best economic justification for subsidizing vaccinations for infectious disease on the basis of efficiency? ​

Accepted Answer

A)  ​Vaccinations create a positive externality for society because they reduce the chances the scope of epidemics. 
B)  ​Vaccinations are a type of pollution that increase the chances and the scope of epidemics. 
C)  ​A politician offering subsidized vaccinations may be able to get more votes from lower income people and get elected. 
D)  ​None of the answers above are correct. 
A)  ​Vaccinations create a positive externality for society because they reduce the chances the scope of epidemics. 
B)  ​Vaccinations are a type of pollution that increase the chances and the scope of epidemics. 
C)  ​A politician offering subsidized vaccinations may be able to get more votes from lower income people and get elected. 
D)  ​None of the answers above are correct.

Question 6

According to Garrett Hardin's view of The Tragedy of the Commons:

Accepted Answer

A)  Externalities will be internalized by the market. 
B)  Individuals will use the commons up to the point where marginal benefits equal marginal social costs. 
C)  Individuals will create institutions to prevent the collapse of the commons. 
D)  Individual will use the commons beyond the socially efficient point. 
A)  Externalities will be internalized by the market. 
B)  Individuals will use the commons up to the point where marginal benefits equal marginal social costs. 
C)  Individuals will create institutions to prevent the collapse of the commons. 
D)  Individual will use the commons beyond the socially efficient point.

The Coase theorem says that, if the appropriate property right is assigned to ____, an efficient solution to an externality problem will be achieved.

In order to increase society's total welfare (social efficiency), a production process that produces a negative externality should be:

Negative externalities:

Firms that emit toxins into the air:

Which of the following offers the best economic justification for subsidizing vaccinations for infectious disease on the basis of efficiency?

According to Garrett Hardin's view of The Tragedy of the Commons:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 14: Environmental Economics

The Coase theorem says that, if the appropriate property right is assigned to ____, an efficient solution to an externality problem will be achieved.

In order to increase society's total welfare (social efficiency), a production process that produces a negative externality should be:

Negative externalities:

Firms that emit toxins into the air:

Which of the following offers the best economic justification for subsidizing vaccinations for infectious disease on the basis of efficiency? ​

According to Garrett Hardin's view of The Tragedy of the Commons:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

International Trade and Finance

Economies in Transition

Growth and the

Filters

Which of the following offers the best economic justification for subsidizing vaccinations for infectious disease on the basis of efficiency?