Exam 10: Externalities

"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.

If transactions costs are low,then assigning property rights in a market with external costs i.increases the deadweight loss. ii.means private transactions are efficient. iii.means that only consumers must pay the external costs.

Joanne rents a TV production studio to produce an extra hour of a TV show.The rent is

The figure above shows the demand for college education (D), the marginal social benefit of college education (MSB), and the marginal cost of the private schools (MC). -Based on the figure above,when the market is unregulated and is in equilibrium,the deadweight loss is

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

-The figure above shows the market for the chemical hydrogen sulfide,the production of which creates an external cost.The government imposes the pollution tax shown in the above figure.What quantity is produced after the pollution tax is imposed?

Issuing marketable permits to firms that produce a product with external costs will give the firms the incentive to

-The figure above shows the market for annual influenza immunizations the United States.The market equilibrium with no government intervention is ________ because health care generates ________.

-The figure above shows the market for college education in the United States.If the government does not intervene in this market,the deadweight loss equals ________ per year.

The figure above shows the demand for college education (D), the marginal social benefit of college education (MSB), and the marginal cost of the private schools (MC). -Using the figure above,suppose education is provided by public colleges,where tuition is set at $10,000 a year.When the market is in equilibrium,the marginal social benefit is ________,the marginal cost is ________,and the number of students enrolled is ________.

When people decide whether or not to get a flu vaccination,they ignore the ________ and as a result ________.

-The figure shows the market for college education.In order for the efficient amount of education to occur,the government could provide a subsidy of ________ per student.

-Producing leather creates external costs in the form of water pollution.The figure above illustrates the market for leather.If the government sets a pollution limit that achieves efficiency,how many tons of leather are produced?

-The figure above shows the market for college education.The efficient quantity of education is

In an unregulated market with an external benefit,the

-The figure above shows the market for college education in the United States.The efficient quantity of college education is ________ students per year.

When Keisha receives a flu vaccination,the additional benefit enjoyed by Keisha's friends is the

A voucher is

If the marginal private benefit of attending college for Shelly is $40,000 and the marginal external benefit is $15,000,she will attend college if the cost of attendance is no more than

Which of the following is true? i.In an unregulated market with an external benefit,consumers don't take it into account and consume less than the efficient quantity. ii.Marginal social cost equals marginal private cost minus marginal external cost. iii.An unregulated market produces more than the efficient quantity of a good with an external cost.