Exam 17: Externalities

-The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the equilibrium price is ________ per ton.

What is the Coase theorem? What conditions need to be present for this theorem to work?

-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 price per ton will be

A key contribution of Ronald Coase is that he pointed out that private transactions are efficient when the number of parties involved is small

-The tables above show the marginal costs and benefits from production and consumption of paper. From this information we can see that there are

The benefit from an additional unit of a good or service that society receives from the consumption of that good or service is the

-The efficient level of college enrollment in Inland is

-The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, what is the price of college education?

There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry

In an unregulated competitive market, the presence of marginal external benefit from a good or service results in overproduction.

Which condition(s) must exist for the Coase theorem to hold? I. Property rights must exist. II) Transactions costs must be measurable. III) A small number of parties must be involved.

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

-The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient amount of paper will be produced by setting a Pigovian tax of

One way to overcome the problem of the commons is to

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

The granite boulders in Rocky Mountain National Park are a favored place among talented climbers who specialize in the art of bouldering, or climbing harder (but shorter) routes without tying into a rope. Climbers have taken to (illegally) stashing foam crash pads underneath the boulders but marmots and other rodents chew up the pads and the litter is spread by the wind. The pristine National Park is most like a

The figure shows the supply curve (S) and the demand curve (D) for college education. The external benefit from college education is $6,000 per student per year and is constant. -In the figure above, if the government provides a subsidy to colleges of $6,000 per student per year, what is the tuition?

-The figure above illustrates the problem of overcrowding and external costs experienced during the summer months in the state park. If the market is unregulated, in equilibrium the external cost of visiting the state park is given by the distance between

-In the figure above, S is the supply curve and D is the demand curve in the unregulated, competitive market for gasoline in Motorland. The external cost of gasoline is constant at $1.50 per gallon. Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, the market will

Marginal social cost is equal to the