Exam 10: Externalities

In Singapore, property taxes on an automobile can exceed the purchase price of a new automobile.Assuming that the tax is a fixed percentage of market value, which of the following does this tax represent? (i) a policy in which private incentives are used to reduced the traffic externality on congested roads in Singapore (ii) the government's direct control over the number of automobiles that are purchased (iii) a policy in which private incentives are used to reduce automobile pollution

Evaluate the following statement: 'The problem of second-hand smoke in places of employment is different to the problem in public restaurants.People typically don't have very many employment options but they do have many alternatives for selecting a place to eat.As such, direct regulation of second-hand smoke in public restaurants is likely to be inefficient'.

Current media laws allow television companies to own a certain number of channels.However, the greatest part of their revenue comes from the advertisements that are shown when the most viewers are watching their shows.This has the unusual consequence of many stations broadcasting low-interest shows such as shopping on their other channels, so as to concentrate their audiences into one channel and thus reap the most advertising revenue.What is this an example of, and what could be done to rectify it?

An externality will:

If the social cost of producing robots is less than the private cost of producing robots, the private market produces too few robots.

Which of the following statements about a market that is affected by a positive production externality is correct?

Why are tradeable pollution permits considered to be a more efficient way to reduce pollution than Government regulation?

Pigovian taxes are unlike most other taxes because they:

When a tax is used to give buyers and sellers in a market the incentive to take into account the external effects of their actions, it is said to be 'internalising an externality'.

If sparks from trains sets adjacent farmland on fire, one way to internalise the externality is:

Encouraging firms to increase production via a subsidy will tend to be socially optimal when:

When dealing with consumption externalities, the market equilibrium can be moved closer to the social equilibrium by:

A ???______ is enacted to correct the effects of a negative externality:

Markets are inefficient when positive production externalities are present because:

In the absence of public policies, markets will ensure that:

Why does society sometimes impose taxes on negative externalities?

A positive consumption externality will cause a private market to produce:

Suppose that a steel factory emits a certain amount of air pollution and that this pollution constitutes a negative externality.If this market is not required to internalise this externality:

Brent and Jess live together.Every morning, Jess makes a smoothie before work and wakes Brent, angering him, since he usually likes to sleep in.How can Brent and Jess solve this problem?

Assuming that Dick has the legal right to keep the dog, which of the following statements is true?