Exam 17: Externalities

The HPV vaccine protects against human papillomavirus (HPV) that causes cancer. It protects both the person getting the vaccine and the sexual partners of that person. To encourage the efficient number of people to be vaccinated the government could

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

The tragedy of commons is the

-The figure above shows the market for steel, the production of which creates pollution. a) What point represents the equilibrium price and what point represents the equilibrium quantity in an unregulated, competitive market? b) What area represents the deadweight loss of the unregulated, competitive market outcome? c) What point represents the efficient quantity? d) If the output level in part (c) was achieved through the use of a government imposed tax, what price would consumers pay? What price would the producers receive? What distance represents the amount of the tax? e) If government successfully uses marketable permits issued under a cap-and-trade policy to eliminate the external cost, what point represents how much output would be produced?

"If production of a good creates an external cost, then, when production is such that the marginal private costs are equal to the marginal private benefits, the market outcome will be inefficient." Explain whether this assertion is correct or incorrect.

-In the above figure, if a subsidy is granted that generates an efficient allocation of resources, then the output level will be

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. The market equilibrium with no government intervention is raising

Beautification of the national highways through the planting of shrubs and wildflowers will

-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 social benefit is

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource. The market equilibrium with no government intervention is

Public universities, by charging tuition ________ the marginal cost of education, ________ the number of students.

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

-The table above shows the marginal costs and marginal benefits of college education. If 8 million students are enrolled, the marginal external benefit is

-The figure above shows the marginal social costs (MSC), marginal private benefits (MB), and marginal social benefits (MSB) of college education in Inland. If Inland's government wants to provide the efficient level of education, it must set tuition at ________ per year to ensure that ________ million students are enrolled.

Let MC be the marginal private cost per megawatt hour (Mwh) of producing electricity using coal. Let MSC be the marginal social cost per Mwh and T be the tax per Mwh. To achieve efficiency, the tax should be set so that

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. Based on the data in the table, production of fertilizer has

With the debris of more than 50 years of climbing on the beautiful high slopes - oxygen canisters, tents, backpacks and even some bodies - Mount Everest has been called the world's highest garbage dump. It has been suggested that there should be a limited number of climbers allowed on the mountain each year to limit the environmental degradation that occurs. This method of achieving efficient use of a common resource is most like

"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer.

The Coase theorem says that which of the following is necessary to lead to an efficient use of resources?

-The figure above shows the costs associated with producing paper. When paper is produced, there is some pollution runoff into a lake. The marginal private cost borne by the firms plus the people who enjoy a clean lake when output equals 2 tons of paper per week equals