Exam 10: Externalities

-The figure above shows the market for college education in the United States.If there is no external benefit from a college education and the government does not intervene in the market, then the equilibrium tuition of college education is

-The figure above represents the relationship between output and cost in an industry with an external cost.When output is at D, what distance represents the marginal external cost?

Legally established titles to ownership, use, and disposal of factors of production and goods and services, are called ________ rights.

Private subsidies granted to producers affect

If the government provides a subsidy to producers, what is the effect of this policy in a supply and demand diagram?

For a good whose production creates an external cost, the efficient quantity of output is

In a market with an external cost, government action

If the government taxes producers that create pollution, the government's policy

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal cost paid by the producers and everyone else in society when 200 billion kilowatt hours are produced is

A government subsidy

To eliminate the inefficiency resulting from pollution that creates an external cost, the government can impose a pollution tax on producers that is equal to the

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). -In the figure above, suppose the government provides vouchers worth $15,000 per student per year.When the market is in equilibrium, marginal social benefit ________ marginal cost, and the number of students enrolled is ________.

-The figure above shows the market for annual influenza immunizations the United States.The marginal external benefit associated with immunizing 14 million people is ________ per person per year.

-The figure above shows the market for college education.Left to itself without any government intervention, a competitive market would create a deadweight loss equal to

What is the Coase theorem? What conditions need to be present for this theorem to work?

If an external benefit is present in the consumption of a good or service, then

Marginal social cost is equal to

If tuition at a college is $30,000 and the external benefit of graduating from this college is $10,000, then I∙in the absence of any government intervention, the number of students graduating is less than the efficient number. Ii∙the government could increase the number of graduates by giving the college a $10,000 subsidy per student. Iii∙the government could increase the number of graduates by giving the students $10,000 vouchers.

For a product with an external cost, the supply curve

When using pollution charges to improve efficiency in a market with an external cost, regulators attempt to set the pollution charge equal to the