Exam 9: Externalities: Pollution, Education, and Health Care

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered. It also illustrates the marginal benefit. There is no external benefit. If the city of Seattle puts on 5 concerts per year, then the marginal benefit will

If a producer must pay the cost of his or her pollution because property rights have been assigned, then

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). -Using the figure above, suppose education is provided by public colleges, where tuition is set at $10,000 a year. Then, ________ million students are enrolled, and the taxpayers cover ________ of marginal cost per student.

What is the biggest problem of using government actions such as taxes and pollution charges to control external costs?

Suppose two neighborhoods with 10 homes each in Buffalo, New York are identical except one of them is near a toxic waste dump. If homes near the dump sell for an average of $40,000 and the other homes sell for $90,000, the external cost of the dump is

-The figure above shows the market for annual influenza immunizations the United States. If the government intervenes in the market and provides a $10 subsidy to providers of immunizations, the number of people immunized is ________.

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). -Based on the figure above, when the market is unregulated and is in equilibrium, the deadweight loss is

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 ________.

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

What are marketable permits? Suppose there are two firms in an area, each emitting tons of sulfur. The government decides on a target level of 200 tons of sulfur, and gives each firm a permit to emit 100 tons of sulfur. Suppose Firm A is very efficient and can reduce pollution by 100 tons with an abatement cost of $500. Firm B has an older plant, so it will cost Firm B $1,000 to reduce emissions by 100 tons. What will occur with marketable permits?

For a product with an external cost, the supply curve

Why does the existence of an external benefit lead to the production of less than the efficient quantity?

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve. If the Coase theorem can be used in this market, output equals ________ kilowatt hours per day.

-The figure above shows the market for a good with an external benefit. If the market is competitive and the government takes no action, the equilibrium quantity is ________ units and the equilibrium price is ________ per unit.

Which of the following is true?

If all education in the United States were provided by private, tuition-charging schools,

MSB equals

Public provision

Issuing marketable permits to firms that produce a product with external costs will give the firms the incentive to

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