Exam 17: Externalities

-The table above describes the market for paper. The production of paper produces pollution. There are no external benefits. What is the quantity produced if the market for paper is unregulated?

Scientists have said for years cod was so seriously overfished in European Union waters that there was a risk of extinction due to stock collapse. Why would cod be on the risk of extinction?

A marginal external cost is the cost of producing an additional unit of a good that falls on the producer.

When the production of a good creates an external cost, by setting the tax rate equal to the ________, firms can be made to behave in the same way as they would if they bore the cost of the externality directly.

-In the above table, if the market is perfectly competitive and unregulated, at the equilibrium level of output, the marginal external benefit per unit is

What is marginal external cost of production?

-The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. If the market is competitive and unregulated, how much steel will be produced?

Which of the following applies to the tragedy of the commons? I. In the absence of government action, there is an absence of incentives to prevent the overuse of the common resource. II) When consumers take account of the marginal social benefit and marginal social cost, overuse of the resource occurs. III) Even with government action, it is impossible for an efficient level of output to be achieved.

Explain the difference between marginal social benefit and marginal external benefit.

-The marginal cost of educating a student is $30,000, and this cost is independent of the number of students. The figure above shows the marginal private benefit that a student receives from education. An independent government agency determines that the efficient number of students is 40,000. What is the marginal social benefit from education?

According to the Coase theorem, which of the following are necessary for the efficient levels of pollution to be achieved? I. Property rights are defined. II) Transactions costs are low.

When the marginal social benefit of Good A is greater than the marginal private benefit of Good A, then

Generating electricity using coal creates air pollution. This industry, if left unregulated, will produce

-The table above shows the marginal private benefit, marginal social benefit, and marginal cost of education at the College of Epsilon. What is the tuition that will make the number of students equal to the efficient number?

In an unregulated competitive market, the presence of marginal external benefit from a good or service results in less than the efficient quantity being produced.

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

Taxes can yield the efficient level of pollution if the tax is set equal to the

-Based on the data in the above table, the table shows a market for a good with

-The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal private cost is

Legally established titles to the ownership, use, and disposal of factors of production are referred to as