Exam 10: Externalities

A firm dumps dioxin in a river,thereby severely polluting the river.The cost of the water pollution is i.zero for the firm. ii.an external cost. iii.part of the marginal social cost

For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced,what must be done?

Public provision

Marginal private cost

-The figure above shows an education market in which the government is providing households with vouchers.Excluding the voucher,what do the students pay the schools?

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 a subsidy of $15,000 per student is provided to private colleges.When the market is in equilibrium,marginal social benefit ________ marginal cost,and the number of students enrolled is ________.

List and briefly define the three methods government can use to cope with an external cost,such as pollution.

If a product has an external benefit,how does its marginal private benefit compare to its marginal social benefit?

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal cost borne by producers when 100 billion kilowatt hours are produced is

Use the idea of external costs to explain why some cities have laws against late-night rock concerts.

The proposition that if property rights exist and are enforced,then private transactions are efficient is referred to as the

One reason why property rights help achieve an efficient level of pollution is because property rights

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the government imposes a pollution tax to achieve the efficient level of production,the tax equals ________ per kilowatt hour.

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The difference between the marginal cost curve and the marginal social cost curve equals

Discuss the difference between a private cost and a social cost.

If all education in the United States were provided by private,tuition-charging schools,

Education has an external benefit.So to achieve the efficient level of education,an education voucher must equal the difference between the

If the marginal private cost of running a car is $0.30 a mile and the marginal external cost is $0.10,what is the marginal social cost?

If the marginal private cost of producing one kilowatt of power in California is ten cents and the marginal social cost of each kilowatt is fourteen cents,then the marginal external cost equals ________ per kilowatt.

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