Question 1

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

Question 2

Based on the figure above, if the factory owned the river then at the equilibrium, marginal social cost would ________ marginal benefit, and the quantity of chemical produced would be ________.

Accepted Answer

A) exceed; above the efficient quantity 
B) exceed; below the efficient quantity 
C) be below; above the efficient quantity 
D) be below; below the efficient quantity 
E) equal; efficient 
A) exceed; above the efficient quantity 
B) exceed; below the efficient quantity 
C) be below; above the efficient quantity 
D) be below; below the efficient quantity 
E) equal; efficient

Question 3

If there is no external cost, then marginal social cost

Accepted Answer

A) increases as output increases. 
B) decreases as output increases. 
C) is constant regardless of the level of output. 
D) is unrelated to output levels. 
E) first increases and then decreases as output increases. 
A) increases as output increases. 
B) decreases as output increases. 
C) is constant regardless of the level of output. 
D) is unrelated to output levels. 
E) first increases and then decreases as output increases.

Question 4

When the production of a good has a marginal external cost, which of the following occurs in an unregulated market?
I∙Overproduction relative to the efficient level will occur.
Ii∙The market price is less than the marginal social cost at the equilibrium quantity.
Iii∙A deadweight loss occurs.

Accepted Answer

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

Question 5

Three methods the government can use to cope with the external cost from pollution are

Accepted Answer

A) pollution taxes, subsidies, and outright bans. 
B) pollution taxes, regulations, and subsidies. 
C) marketable permits, pollution subsidies, and pollution taxes. 
D) pollution charges, marketable permits, and pollution limits. 
E) vouchers, pollution subsidies, and pollution taxes. 
A) pollution taxes, subsidies, and outright bans. 
B) pollution taxes, regulations, and subsidies. 
C) marketable permits, pollution subsidies, and pollution taxes. 
D) pollution charges, marketable permits, and pollution limits. 
E) vouchers, pollution subsidies, and pollution taxes.

Question 6

Which of the following is an example of an external benefit?

Accepted Answer

A) a ton of coal burned in a power plant to produce electricity 
B) a car accident that crowds a major Los Angeles freeway 
C) the production of a slice of pizza 
D) the cleanup of a large lake 
E) the consumption of a can of Mt. Dew 
A) a ton of coal burned in a power plant to produce electricity 
B) a car accident that crowds a major Los Angeles freeway 
C) the production of a slice of pizza 
D) the cleanup of a large lake 
E) the consumption of a can of Mt. Dew

Question 7

Some policymakers have proposed giving parents of children in poorly performing schools tax dollars to help send their children to private schools.This proposal is an example of

Accepted Answer

A) vouchers. 
B) public provision. 
C) external costs. 
D) taxes. 
E) correcting an externality using a government good. 
A) vouchers. 
B) public provision. 
C) external costs. 
D) taxes. 
E) correcting an externality using a government good.

Question 8

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve.The marginal external cost of producing 200 billion kilowatt hours per day is ________ per kilowatt.

Accepted Answer

A) 0¢ 
B) 10¢ 
C) 20¢ 
D) 15¢ 
E) 5¢ 
A) 0¢ 
B) 10¢ 
C) 20¢ 
D) 15¢ 
E) 5¢

Question 9

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market, the number of immunizations per year is ________ and the efficient number of immunizations per year is ________.

Accepted Answer

A) 14 million; 20 million 
B) 20 million; 22 million 
C) 14 million; 22 million 
D) 14 million; 10 million 
E) 10 million; 14 million 
A) 14 million; 20 million 
B) 20 million; 22 million 
C) 14 million; 22 million 
D) 14 million; 10 million 
E) 10 million; 14 million

Question 10

The production of a good or service by an authority that receives the most of its revenue from the government is referred to as

Accepted Answer

A) public provision. 
B) private subsidies. 
C) vouchers. 
D) copyrights. 
E) Coasian production. 
A) public provision. 
B) private subsidies. 
C) vouchers. 
D) copyrights. 
E) Coasian production.

Question 11

When the benefits of producing a good or service spill over to other people, rather than just the buyer, the spillover is referred to as

Accepted Answer

A) an external benefit. 
B) an external cost. 
C) a marginal cost. 
D) an equilibrium social output. 
E) a Coasian good. 
A) an external benefit. 
B) an external cost. 
C) a marginal cost. 
D) an equilibrium social output. 
E) a Coasian good.

Question 12

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

Accepted Answer

A) 0¢ per kilowatt. 
B) 5¢ per kilowatt. 
C) 10¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 20¢ per kilowatt. 
A) 0¢ per kilowatt. 
B) 5¢ per kilowatt. 
C) 10¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 20¢ per kilowatt.

Question 13

Externalities

Accepted Answer

A) can be either benefits or costs. 
B) always create extra social costs. 
C) always make society better off. 
D) cannot be expressed in dollar amounts. 
E) are always part of private costs or private benefits. 
A) can be either benefits or costs. 
B) always create extra social costs. 
C) always make society better off. 
D) cannot be expressed in dollar amounts. 
E) are always part of private costs or private benefits.

Question 14

The use of vouchers for education

Accepted Answer

A) decreases the demand for education and increases the equilibrium quantity. 
B) increases the demand for education and increases the equilibrium quantity. 
C) increases the deadweight loss for those who can't afford schooling. 
D) decreases the quantity provided to the efficient level. 
E) decreases the demand for education and decreases the equilibrium quantity. 
A) decreases the demand for education and increases the equilibrium quantity. 
B) increases the demand for education and increases the equilibrium quantity. 
C) increases the deadweight loss for those who can't afford schooling. 
D) decreases the quantity provided to the efficient level. 
E) decreases the demand for education and decreases the equilibrium quantity.

Question 15

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.

Accepted Answer

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

Question 16

Why is it not efficient to eliminate all pollution?

Accepted Answer

Eliminating pollution is a task that use

Question 17

If a good has an external cost, the

Accepted Answer

A) unregulated competitive market outcome is efficient. 
B) marginal private cost reflects the external cost. 
C) unregulated competitive market outcome is inefficient. 
D) marginal social benefit is equal to the marginal social cost when the market is in equilibrium. 
E) external benefit must equal the external cost. 
A) unregulated competitive market outcome is efficient. 
B) marginal private cost reflects the external cost. 
C) unregulated competitive market outcome is inefficient. 
D) marginal social benefit is equal to the marginal social cost when the market is in equilibrium. 
E) external benefit must equal the external cost.

Question 18

A marginal external cost of a product is equal to

Accepted Answer

A) what the producer has to pay to hire resources to produce another unit. 
B) the cost someone other than the producer incurs when another unit is produced. 
C) the cost the producer incurs to produce another unit. 
D) what the consumer must pay when he or she buys the good or service. 
E) None of these answers describes a marginal external cost. 
A) what the producer has to pay to hire resources to produce another unit. 
B) the cost someone other than the producer incurs when another unit is produced. 
C) the cost the producer incurs to produce another unit. 
D) what the consumer must pay when he or she buys the good or service. 
E) None of these answers describes a marginal external cost.

Question 19

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve.If the market is competitive and unregulated, the equilibrium quantity is ________ billions of kilowatt hours per day and the efficient quantity is ________ billions of kilowatt hours per day

Accepted Answer

A) 150; 200 
B) 200; 150 
C) 0; 150 
D) 250; 0 
E) 150; 150 
A) 150; 200 
B) 200; 150 
C) 0; 150 
D) 250; 0 
E) 150; 150

Question 20

-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 200 billion kilowatt hours are produced is

Accepted Answer

A) 0¢ per kilowatt. 
B) 10¢ per kilowatt. 
C) 20¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 5¢ per kilowatt. 
A) 0¢ per kilowatt. 
B) 10¢ per kilowatt. 
C) 20¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 5¢ per kilowatt.

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

Based on the figure above, if the factory owned the river then at the equilibrium, marginal social cost would marginal benefit, and the quantity of chemical produced would be .

If there is no external cost, then marginal social cost

When the production of a good has a marginal external cost, which of the following occurs in an unregulated market? I∙Overproduction relative to the efficient level will occur. Ii∙The market price is less than the marginal social cost at the equilibrium quantity. Iii∙A deadweight loss occurs.

Three methods the government can use to cope with the external cost from pollution are

Which of the following is an example of an external benefit?

Some policymakers have proposed giving parents of children in poorly performing schools tax dollars to help send their children to private schools.This proposal is an example of

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve.The marginal external cost of producing 200 billion kilowatt hours per day is ________ per kilowatt.

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market, the number of immunizations per year is and the efficient number of immunizations per year is .

The production of a good or service by an authority that receives the most of its revenue from the government is referred to as

When the benefits of producing a good or service spill over to other people, rather than just the buyer, the spillover is referred to as

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

Externalities

The use of vouchers for education

Why is it not efficient to eliminate all pollution?

If a good has an external cost, the

A marginal external cost of a product is equal to

-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 200 billion kilowatt hours are produced is

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

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

Based on the figure above, if the factory owned the river then at the equilibrium, marginal social cost would ________ marginal benefit, and the quantity of chemical produced would be ________.

If there is no external cost, then marginal social cost

When the production of a good has a marginal external cost, which of the following occurs in an unregulated market? I∙Overproduction relative to the efficient level will occur. Ii∙The market price is less than the marginal social cost at the equilibrium quantity. Iii∙A deadweight loss occurs.

Three methods the government can use to cope with the external cost from pollution are

Which of the following is an example of an external benefit?

Some policymakers have proposed giving parents of children in poorly performing schools tax dollars to help send their children to private schools.This proposal is an example of

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve.The marginal external cost of producing 200 billion kilowatt hours per day is ________ per kilowatt.

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market, the number of immunizations per year is ________ and the efficient number of immunizations per year is ________.

The production of a good or service by an authority that receives the most of its revenue from the government is referred to as

When the benefits of producing a good or service spill over to other people, rather than just the buyer, the spillover is referred to as

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

Externalities

The use of vouchers for education

Why is it not efficient to eliminate all pollution?

If a good has an external cost, the

A marginal external cost of a product is equal to

-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 200 billion kilowatt hours are produced is

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

Based on the figure above, if the factory owned the river then at the equilibrium, marginal social cost would marginal benefit, and the quantity of chemical produced would be .

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market, the number of immunizations per year is and the efficient number of immunizations per year is .