Exam 10: Externalities

The production of paper creates pollution, an external cost.What happens to the production of paper if the government imposes a tax on paper producers equal to the marginal external cost of the pollution?

The marginal external cost and marginal private cost

-The figure above shows the market for education, a good possessing an external benefit.In order to attain the efficient number of students, a government subsidy must equal ________ per student.

-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?

Which of the following best describes an externality?

Suppose scientific research generates external benefits.Without government intervention, the market for scientific research would

-The figure above shows the market for annual influenza immunizations the United States.If there is NO external benefit from health care and the government does not intervene in the market, then the equilibrium price of immunizations is

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

Explain why a producer who is causing external costs does not have the incentive to reduce these costs.

-The figure above shows the market for annual influenza immunizations the United States.With no government intervention, the market equilibrium is at a price of ________ and ________ million immunizations per year.

"According to the Coase theorem, if Gabriel wants the local television station to cease having helicopters fly over his house at night, he will be more likely to be able to reach an agreement with the station if the property right to the airspace is clearly defined and the transaction costs of negotiating are high." Is this statement true or false? Explain your answer.

"If production of a good creates an external cost, then, when production is such that the marginal private costs are equal to the marginal private benefits, the market outcome will be inefficient." Explain whether this assertion is correct or incorrect.

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). -the figure above shows that the unregulated market equilibrium occurs at a tuition of ________ a year and ________ million students.

-The figure above illustrates the gasoline market.There is no external benefit from gasoline.If a pollution tax equal to the marginal external cost is imposed on gasoline, then the quantity of gasoline produced and consumed equals

Joanne rents a TV production studio to produce an extra hour of a TV show.The rent is

If the marginal private benefit of attending college for Shelly is $40,000 and the marginal external benefit is $15,000, she will attend college if the cost of attendance is no more than

If the marginal social cost of a good is $70 and the marginal external cost is $20, what does the marginal private cost equal?

An externality can be a cost or benefit arising from the production of a good that falls upon

Which of the following best describes an externality?

Which of the following is NOT an example of a good with an external cost?