Exam 16: Externalities

The economic benefit of a patent or copyright must be balanced against

Use the figure below to answer the following questions. Figure 16.3.2 -Refer to Figure 16.3.2.The figure shows the market for good B.What is the efficient quantity of good B?

Use the information below to answer the following question. Fact 16.2.1 Global Solutions for Local Gridlock Gridlock costs Toronto $6 billion a year, with average commutes of 80 minutes. By 2013, an additional 27 minutes will be added to the daily grind. Civic leaders are looking at road tolls, a regional gas tax, and parking levies. Source: Toronto Star, June 24, 2011 -Refer to Figure 16.2.1.Toll roads, a regional gas tax, and parking levies ________ make Toronto streets less congested because ________.

Use the table below to answer the following question. Table 16.2.3 -Refer to Table 16.2.3.The first two columns of the table show the demand schedule for electricity from a coal burning utility; the second and third columns show the utility's cost of producing electricity. The marginal external cost of the pollution created is equal to the marginal cost. Suppose the government levies a pollution tax such that the utility generates the efficient quantity of electricity.The pollution tax is ________ cents a kilowatt hour.

An externality is a cost or benefit arising from an economic activity that falls on

Post-secondary education in Canada is subsidized.This fact suggests that i. less than the efficient amount of education would be provided by an unregulated market. Ii. the marginal private benefit from education equals the marginal social benefit from education. Iii. post-secondary education has no externalities. Which statements are correct?

The Coase theorem will apply only when

Suppose that recycling rubber for running shoes creates an external benefit of $2.00 per tonne of rubber.There are no external costs.The efficient amount of rubber will be recycled when the government creates a

Use the figure below to answer the following questions. Figure 16.3.1 -Refer to Figure 16.3.1.The figure shows the marginal private benefit curve, the marginal social benefit curve, and the market supply curve.If production is left to the private market, then at the equilibrium quantity the marginal social benefit from consumption is

When the marginal social cost of the production of Good A is greater than the marginal private cost of the production of Good A, then

According to the Coase theorem, if transactions costs are low and property rights exist,

Use the figure below to answer the following questions. Figure 16.2.2 -Refer to Figure 16.2.2. This figure shows the demand curve, the marginal private cost curve and the marginal social cost curve of good A.Production of the 6th unit of output generates a marginal external

An example of an activity that creates a positive consumption externality is

The marginal private benefit curve (MB)is a negatively-sloped straight line.If marginal external benefit decreases as output increases, the marginal social benefit curve is a negatively-sloped straight line

The devices the government can use to achieve a more efficient allocation of resources in the presence of external benefits include all of the following except

Use the figure below to answer the following questions. Figure 16.2.1 -Refer to Figure 16.2.1.The figure shows the marginal private cost curve, the marginal social cost curve and the market demand curve.To promote an efficient allocation of resources, the government could impose a constant per unit tax equal to

Use the figure below to answer the following questions. Figure 16.3.1 -Refer to Figure 16.3.1.The figure shows the marginal private benefit curve, the marginal social benefit curve, and the market supply curve.If a voucher is given to consumers that generates an efficient outcome, then producers receive a price of

Use the table below to answer the following questions. Table 16.2.1 -Refer to Table 16.2.1.Given in the table are the marginal private cost and the marginal social cost of the production of chemical fertilizer and the marginal social benefit from the consumption of fertilizer.Assume the market is perfectly competitive.If the market is unregulated, the marginal

Smoking tobacco creates a ________ externality.

A well-maintained waterfront property that is enjoyed by other property owners is an example of