Question 1

Explain the difference between a negative production externality and a negative consumption externality.

Accepted Answer

A negative production externality occurs

Question 2

-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 ________ billion 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 3

When a person receives a flu vaccination, the ________ is the additional benefit the person receives from getting the shot.

Accepted Answer

A) marginal private benefit 
B) marginal external benefit 
C) marginal social benefit 
D) marginal social cost 
E) marginal external cost 
A) marginal private benefit 
B) marginal external benefit 
C) marginal social benefit 
D) marginal social cost 
E) marginal external cost

Question 4

Jacob pays $5,000 to paint his house because pollution from a nearby factory damaged the paint. To the factory, the $5,000 cost is

Accepted Answer

A) a private cost and not an external cost. 
B) an external cost and not a private cost. 
C) both a private cost and an external cost. 
D) neither a private cost nor an external cost. 
E) a private benefit because viewers will benefit from watching the extra hour of the show. 
A) a private cost and not an external cost. 
B) an external cost and not a private cost. 
C) both a private cost and an external cost. 
D) neither a private cost nor an external cost. 
E) a private benefit because viewers will benefit from watching the extra hour of the show.

Question 5

In part, the Coase theorem is a proposition about

Accepted Answer

A) assigning property rights. 
B) measuring private costs. 
C) subsidizing external benefits. 
D) taxing external costs. 
E) how increasing transactions costs can reduce deadweight losses. 
A) assigning property rights. 
B) measuring private costs. 
C) subsidizing external benefits. 
D) taxing external costs. 
E) how increasing transactions costs can reduce deadweight losses.

Question 6

Cost effective technologies to reduce pollution are most likely to result from

Accepted Answer

A) marketable pollution permits. 
B) pollution charges. 
C) taxes. 
D) pollution limits. 
E) quotas. 
A) marketable pollution permits. 
B) pollution charges. 
C) taxes. 
D) pollution limits. 
E) quotas.

Question 7

Which of the following is an example of a voucher?

Accepted Answer

A) the postal service 
B) police services 
C) social security 
D) food stamps 
E) a patent on a pharmaceutical drug 
A) the postal service 
B) police services 
C) social security 
D) food stamps 
E) a patent on a pharmaceutical drug

Question 8

-The figure above shows the costs and benefits associated with producing paper. What is the marginal external cost when output is 6 tons?

Accepted Answer

A) $1,600 
B) $1,200 
C) $1,000 
D) $600 
E) $400 
A) $1,600 
B) $1,200 
C) $1,000 
D) $600 
E) $400

Question 9

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 a subsidy of $15,000 per student is provided to private colleges. Then, the market equilibrium occurs at a tuition of ________ a year and ________ million students.

Accepted Answer

A) $10,000; 15 
B) $25,000; 15 
C) $15,000; 15 
D) $15,000; 7.5 
E) $20,000; 20 
A) $10,000; 15 
B) $25,000; 15 
C) $15,000; 15 
D) $15,000; 7.5 
E) $20,000; 20

Question 10

If producing a good or a service creates pollution, then

Accepted Answer

A) an unregulated competitive market produces an efficient output. 
B) the industry's supply curve includes the extra cost of pollution. 
C) at the unregulated, competitive market equilibrium quantity, marginal social cost is greater than the equilibrium price. 
D) at the unregulated, competitive market equilibrium quantity, marginal social benefit and marginal social cost are equal. 
E) at the unregulated, competitive market equilibrium quantity, marginal social benefit is less than the equilibrium price. 
A) an unregulated competitive market produces an efficient output. 
B) the industry's supply curve includes the extra cost of pollution. 
C) at the unregulated, competitive market equilibrium quantity, marginal social cost is greater than the equilibrium price. 
D) at the unregulated, competitive market equilibrium quantity, marginal social benefit and marginal social cost are equal. 
E) at the unregulated, competitive market equilibrium quantity, marginal social benefit is less than the equilibrium price.

Explain the difference between a negative production externality and a negative consumption externality.

When a person receives a flu vaccination, the ________ is the additional benefit the person receives from getting the shot.

Jacob pays $5,000 to paint his house because pollution from a nearby factory damaged the paint. To the factory, the $5,000 cost is

In part, the Coase theorem is a proposition about

Cost effective technologies to reduce pollution are most likely to result from

Which of the following is an example of a voucher?

-The figure above shows the costs and benefits associated with producing paper. What is the marginal external cost when output is 6 tons?

If producing a good or a service creates pollution, then

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

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

Explain the difference between a negative production externality and a negative consumption externality.

When a person receives a flu vaccination, the ________ is the additional benefit the person receives from getting the shot.

Jacob pays $5,000 to paint his house because pollution from a nearby factory damaged the paint. To the factory, the $5,000 cost is

In part, the Coase theorem is a proposition about

Cost effective technologies to reduce pollution are most likely to result from

Which of the following is an example of a voucher?

-The figure above shows the costs and benefits associated with producing paper. What is the marginal external cost when output is 6 tons?

If producing a good or a service creates pollution, then

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters