Exam 5: Externalities, Environmental Policy, and Public Goods

Global warming refers to the effect of global pollutants such as carbon dioxide on climates on the earth.Climate-induced changes in temperatures affect, among other things, agriculture.Which of the following is a reason why policymakers are still debating if this problem should be addressed and how it should be addressed?

When there is a negative externality, the marginal private cost of production ________ the marginal social cost of production.

Because producers do not bear the external cost of pollution

State and local governments subsidize college students with grants and low-interest loans.The loans and subsidies are examples of

If the United States and other developed nations pay the cost of reducing public emissions, developing nations such as China could benefit from the reduction while not contributing to it.In this sense, one can think of reducing carbon emissions as being like a

Which of the following is an example of the U.S.government's use of a "command-and-control" approach to reducing pollution?

An externality is an example of a market failure.

A carbon tax which is designed to reduce pollution is an example of a

Figure 5-7 -Refer to Figure 5-7.The marginal cost of reducing pollution curve is the same curve as

Figure 5-5 Figure 5-5 shows a market with an externality. The current market equilibrium output of Q₁ is not the economically efficient output. The economically efficient output is Q₂. -Refer to Figure 5-5.Suppose the current market equilibrium output of Q₁ is not the economically efficient output because of an externality.The economically efficient output is Q₂.In that case, diagram shows

Figure 5-8 Consider a chemical plant that discharges toxic fumes over a nearby community. To reduce the emissions of toxic fumes the firm can install pollution abatement devices. Figure 5-8 shows the marginal benefit and the marginal cost from reducing the toxic fumes emissions. -Refer to Figure 5-8.What is the economically efficient level of pollution reduction?

If there is pollution in producing a product, then the market equilibrium price

Figure 5-4 Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river and the use of the river for recreation and as a public water supply source. Figure 5-4 shows the paper market. Use this Figure to answer the following question(s). -Refer to Figure 5-4.What does S₁ represent?

Determine if each of the products below displays any of the following characteristics: (i) rivalry (ii) nonrivalry (iii) excludability (iv) nonexcludability. a.a freeway during peak commute hours b.an online college course c.infectious disease prevention d.open source software such as Linux e.a movie showing at Century Theatres

Figure 5-8 Consider a chemical plant that discharges toxic fumes over a nearby community. To reduce the emissions of toxic fumes the firm can install pollution abatement devices. Figure 5-8 shows the marginal benefit and the marginal cost from reducing the toxic fumes emissions. -Refer to Figure 5-8.Suppose the emissions reduction target is currently established at 8 million tons.What is the area that represents the cost of eliminating an additional 1 million tons?

Explain how mandatory seat belt laws may reduce the negative externalities of risky behavior.

Which of the following activities create a negative externality?

The "tragedy of the commons" refers to the phenomenon where

In 2017, economists working at the U.S.Department of Treasury's Office of Tax Analysis have estimated that the marginal social cost of carbon dioxide emissions was about

Figure 5-6 Figure 5-6 shows the market for measles vaccinations, a product whose use generates positive externalities. -Refer to Figure 5-6.What is the economically efficient output level?