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. At 10 concerts, the

When production of a good results in an external cost, the unregulated competitive market equilibrium is inefficient because ________.

If the marginal external cost of building a children's playground equals zero, then the i. marginal private cost equals the marginal social cost. Ii. marginal social cost equals zero. Iii. marginal private cost equals zero.

Which of the following equations is correct?

-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 100 billion kilowatt hours are produced is

An external benefit is a benefit from a good or service that someone other than the ________ receives.

When property rights are assigned and transactions costs are low,

Which of the following is true regarding pollution charges? I. They force a polluter to pay a price for its pollution. Ii. They are based on the marginal external cost of pollution. Iii. The fee that produces the efficient amount of pollution is easily determined.

-The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the equilibrium price of private education is

When Keisha receives a flu vaccination, the additional benefit enjoyed by Keisha's friends is the

-The figure above shows the market for a good with an external benefit. When 6 units are produced, marginal social benefit equals ________ and marginal external benefit equals ________.

A tax on a polluting industry

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 ________.

For a product with external benefits that is produced in a competitive, unregulated market, how can the resulting market output be described?

Quantity of Steel (millions of tons per week) Marginal benefit (dollars per ton) Marginal social cost (dollars per ton) 5 40 20 10 35 25 15 30 30 20 25 35 25 20 40 -The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city. The market is efficient when the quantity of steel produced is ________ tons per week.

Why is it not efficient to eliminate all pollution?

The existence of marginal external benefits for a product like higher education creates a deadweight loss for society because, without government intervention, ________ would be consumed and ________ would be produced.

-The figure above shows the market for the chemical hydrogen sulfide, the production of which creates an external cost. If the government assesses the marginal external cost correctly, what is the amount of the pollution tax that eliminates the inefficiency?

If a pollution tax in a market with an external cost changes the market so that it produces the efficient level of output, which of the following occurs? I. The supply curve shifts leftward. Ii. The price increases. Iii. The quantity produced decreases.

-The figure above shows the market for college education in the United States. The efficient quantity of college education is ________ students per year.