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

-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.

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

-The figure above shows a tax imposed on a good with an external cost. The area of the rectangle abcd equals

The marginal cost incurred by the entire society to produce a good or service is the

The marginal social cost of producing a good or service is the

A example of a good with external benefits is

Which of the following is the best example of a transactions cost?

For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced, what must be done?

When production of a good results in an external cost, the unregulated competitive market equilibrium quantity is

-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 of ________ units is inefficient because ________.

Externalities

Use the idea of external costs to explain why some cities have laws against late-night rock concerts.

To ensure all students are protected from getting the flu this year, your school offers free flu shots. What type of externality exists in this example?

If a product has an external benefit, how does its marginal private benefit compare to its marginal social benefit?

-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. Suppose the marginal private cost of the 5th concert is $10,000. Then, for the 5th concert, the

If the production of a good causes an external cost, then the efficient quantity is

-The figure above shows the market for the chemical hydrogen sulfide, the production of which creates an external cost. The government imposes the pollution tax shown in the above figure. What quantity is produced after the pollution tax is imposed?

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve. If the government imposes a pollution tax to achieve the efficient level of production, the tax equals ________ per kilowatt hour.

If an external benefit is present, then the

-The figure above shows the market for annual influenza immunizations the United States. Area A + Area B is the