Question 1

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

Accepted Answer

External benefits to education include t

Question 2

If the marginal external cost of building a children's playground equals zero,then the
i.marginal private cost equals the marginal social cost.
ii.marginal social cost equals zero.
iii.marginal private cost equals zero.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i and ii 
A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i and ii

Question 3

-The figure above shows the marginal social cost of generating electricity and the marginal private cost.For 4 billion kilowatts,what is the marginal external cost?

Accepted Answer

A)  $0.12 
B)  $0.08 
C)  $0.04 
D)  $0.00 
E)  $0.20 
A)  $0.12 
B)  $0.08 
C)  $0.04 
D)  $0.00 
E)  $0.20

Question 4

-The figure shows the market for college education.The efficient number of students is

Accepted Answer

A)  less than 4 million. 
B)  more than 4 million and less than 8 million. 
C)  4 million. 
D)  8 million. 
E)  more than 8 million. 
A)  less than 4 million. 
B)  more than 4 million and less than 8 million. 
C)  4 million. 
D)  8 million. 
E)  more than 8 million.

Question 5

To ensure all students are protected from getting the flu this year,your school offers free flu shots.What type of externality exists in this example?

Accepted Answer

A)  Negative consumption externality. 
B)  Positive consumption externality. 
C)  Positive production externality. 
D)  Negative production externality. 
E)  Neutral externality. 
A)  Negative consumption externality. 
B)  Positive consumption externality. 
C)  Positive production externality. 
D)  Negative production externality. 
E)  Neutral externality.

Question 6

Education leads to external benefits because

Accepted Answer

A)  the people who become better educated get better jobs. 
B)  better educated people commit fewer crimes. 
C)  better educated people are less lazy. 
D)  little pollution is created when educating people. 
E)  better educated people are more productive. 
A)  the people who become better educated get better jobs. 
B)  better educated people commit fewer crimes. 
C)  better educated people are less lazy. 
D)  little pollution is created when educating people. 
E)  better educated people are more productive.

Question 7

Externalities

Accepted Answer

A)  are important in the areas of environment and education. 
B)  only have a negative impact on people. 
C)  deal with issues that are not our internal issues. 
D)  affect the people who are responsible for production. 
E)  are nonexistent in unregulated, competitive markets. 
A)  are important in the areas of environment and education. 
B)  only have a negative impact on people. 
C)  deal with issues that are not our internal issues. 
D)  affect the people who are responsible for production. 
E)  are nonexistent in unregulated, competitive markets.

Question 8

Cap-and-trade refers to

Accepted Answer

A)  capping emissions and issuing tradeable emissions permits. 
B)  capping revenue from selling emissions permits. 
C)  countries trading fishing rights in international waters. 
D)  capping taxes on firms that engage in international trade. 
E)  capping the benefits gained from pollution controls. 
A)  capping emissions and issuing tradeable emissions permits. 
B)  capping revenue from selling emissions permits. 
C)  countries trading fishing rights in international waters. 
D)  capping taxes on firms that engage in international trade. 
E)  capping the benefits gained from pollution controls.

Question 9

A problem with pollution charges or taxes as a solution to pollution is that

Accepted Answer

A)  people don't want the government to regulate industry. 
B)  the necessary information about the polluting industry is costly and usually unavailable. 
C)  taxes are already too high. 
D)  pollution would still continue. 
E)  the producers do not want the property right to their pollution. 
A)  people don't want the government to regulate industry. 
B)  the necessary information about the polluting industry is costly and usually unavailable. 
C)  taxes are already too high. 
D)  pollution would still continue. 
E)  the producers do not want the property right to their pollution.

Question 10

The benefit that Joan gets from eating cherries is an example of

Accepted Answer

A)  when the external benefit equals the private benefit. 
B)  a private benefit. 
C)  an external benefit. 
D)  an external cost. 
E)  the marginal social cost of eating cherries. 
A)  when the external benefit equals the private benefit. 
B)  a private benefit. 
C)  an external benefit. 
D)  an external cost. 
E)  the marginal social cost of eating cherries.

Question 11

What is marginal external cost? Give an example.

Accepted Answer

Marginal external cost is the additional

Question 12

Which of the following is an example of an activity that creates an external cost?
i.a smoker emitting second-hand smoke
ii.sulfur emitting from a smoke stack
iii.throwing garbage on the roadside

Accepted Answer

A)  i only 
B)  i and ii 
C)  iii only 
D)  ii and iii 
E)  i, ii, and iii 
A)  i only 
B)  i and ii 
C)  iii only 
D)  ii and iii 
E)  i, ii, and iii

Question 13

If producing a good or a service creates pollution,then

Accepted Answer

A)  an unregulated competitive market produces an efficient output. 
B)  the industry's supply curve includes the extra cost of pollution. 
C)  at the unregulated, competitive market equilibrium quantity, marginal social cost is greater than the equilibrium price. 
D)  at the unregulated, competitive market equilibrium quantity, marginal social benefit and marginal social cost are equal. 
E)  at the unregulated, competitive market equilibrium quantity, marginal social benefit is less than the equilibrium price. 
A)  an unregulated competitive market produces an efficient output. 
B)  the industry's supply curve includes the extra cost of pollution. 
C)  at the unregulated, competitive market equilibrium quantity, marginal social cost is greater than the equilibrium price. 
D)  at the unregulated, competitive market equilibrium quantity, marginal social benefit and marginal social cost are equal. 
E)  at the unregulated, competitive market equilibrium quantity, marginal social benefit is less than the equilibrium price.

Question 14

MSB equals

Accepted Answer

A)  MC + the marginal external cost. 
B)  MC + the marginal external benefit. 
C)  MB + the marginal external cost. 
D)  MB + the marginal external benefit. 
E)  MB + MC. 
A)  MC + the marginal external cost. 
B)  MC + the marginal external benefit. 
C)  MB + the marginal external cost. 
D)  MB + the marginal external benefit. 
E)  MB + MC.

Question 15

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

Accepted Answer

A)  deadweight loss when there is not the illustrated subsidy. 
B)  loss in efficiency from the illustrated subsidy. 
C)  gain in efficiency from the illustrated subsidy. 
D)  remaining deadweight loss when there is the illustrated subsidy. 
E)  equilibrium with the illustrated subsidy. 
A)  deadweight loss when there is not the illustrated subsidy. 
B)  loss in efficiency from the illustrated subsidy. 
C)  gain in efficiency from the illustrated subsidy. 
D)  remaining deadweight loss when there is the illustrated subsidy. 
E)  equilibrium with the illustrated subsidy.

Question 16

Does the existence of the University of Oklahoma affect citizens who do not attend the University?

Accepted Answer

Education creates an external benefit.He

Question 17

When government levies pollution taxes on sellers to eliminate the inefficiency from the cost of pollution,the result is

Accepted Answer

A)  a lower price. 
B)  a smaller quantity produced. 
C)  a smaller cost of production. 
D)  a rightward shift of the supply curve. 
E)  leftward shifts of the supply and demand curves. 
A)  a lower price. 
B)  a smaller quantity produced. 
C)  a smaller cost of production. 
D)  a rightward shift of the supply curve. 
E)  leftward shifts of the supply and demand curves.

Question 18

Harry,the owner of a beauty salon,hires a new hair stylist.The wages paid to the new stylist are

Accepted Answer

A)  a private cost and not an external cost . 
B)  an external cost and not a private cost. 
C)  both a private cost and an external cost. 
D)  neither a private cost nor an external cost. 
E)  only a private benefit because people want their hair styled. 
A)  a private cost and not an external cost . 
B)  an external cost and not a private cost. 
C)  both a private cost and an external cost. 
D)  neither a private cost nor an external cost. 
E)  only a private benefit because people want their hair styled.

Question 19

When government provides a good with an external benefit,to attain efficiency the price paid by consumers is set equal to the

Accepted Answer

A)  marginal private benefit at the efficient level of output. 
B)  marginal private cost at the efficient level of output. 
C)  amount paid by taxpayers. 
D)  market-determined price. 
E)  marginal external benefit at the efficient level of output. 
A)  marginal private benefit at the efficient level of output. 
B)  marginal private cost at the efficient level of output. 
C)  amount paid by taxpayers. 
D)  market-determined price. 
E)  marginal external benefit at the efficient level of output.

Question 20

If the production of a good causes pollution (an external cost)is the unregulated competitive market equilibrium of that product efficient?

Accepted Answer

The presence of pollution means that the

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

If the marginal external cost of building a children's playground equals zero,then the i.marginal private cost equals the marginal social cost. ii.marginal social cost equals zero. iii.marginal private cost equals zero.

-The figure above shows the marginal social cost of generating electricity and the marginal private cost.For 4 billion kilowatts,what is the marginal external cost?

-The figure shows the market for college education.The efficient number of students is

To ensure all students are protected from getting the flu this year,your school offers free flu shots.What type of externality exists in this example?

Education leads to external benefits because

Externalities

Cap-and-trade refers to

A problem with pollution charges or taxes as a solution to pollution is that

The benefit that Joan gets from eating cherries is an example of

What is marginal external cost? Give an example.

Which of the following is an example of an activity that creates an external cost? i.a smoker emitting second-hand smoke ii.sulfur emitting from a smoke stack iii.throwing garbage on the roadside

If producing a good or a service creates pollution,then

MSB equals

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

Does the existence of the University of Oklahoma affect citizens who do not attend the University?

When government levies pollution taxes on sellers to eliminate the inefficiency from the cost of pollution,the result is

Harry,the owner of a beauty salon,hires a new hair stylist.The wages paid to the new stylist are

When government provides a good with an external benefit,to attain efficiency the price paid by consumers is set equal to the

If the production of a good causes pollution (an external cost)is the unregulated competitive market equilibrium of that product efficient?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 10: Externalities

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

If the marginal external cost of building a children's playground equals zero,then the i.marginal private cost equals the marginal social cost. ii.marginal social cost equals zero. iii.marginal private cost equals zero.

-The figure above shows the marginal social cost of generating electricity and the marginal private cost.For 4 billion kilowatts,what is the marginal external cost?

-The figure shows the market for college education.The efficient number of students is

To ensure all students are protected from getting the flu this year,your school offers free flu shots.What type of externality exists in this example?

Education leads to external benefits because

Externalities

Cap-and-trade refers to

A problem with pollution charges or taxes as a solution to pollution is that

The benefit that Joan gets from eating cherries is an example of

What is marginal external cost? Give an example.

Which of the following is an example of an activity that creates an external cost? i.a smoker emitting second-hand smoke ii.sulfur emitting from a smoke stack iii.throwing garbage on the roadside

If producing a good or a service creates pollution,then

MSB equals

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

Does the existence of the University of Oklahoma affect citizens who do not attend the University?

When government levies pollution taxes on sellers to eliminate the inefficiency from the cost of pollution,the result is

Harry,the owner of a beauty salon,hires a new hair stylist.The wages paid to the new stylist are

When government provides a good with an external benefit,to attain efficiency the price paid by consumers is set equal to the

If the production of a good causes pollution (an external cost)is the unregulated competitive market equilibrium of that product efficient?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters