Exam 17: Externalities

-Based on the data in the above table, the product exhibits

For a common resource, the equilibrium with no government intervention is such that ________ is less than ________.

If the number of ITQs issued equals the efficient production level, what is the price of an ITQ?

For a common resource, efficiency requires that the ________ equals the ________.

The government can use taxes to

-The above figure shows the marginal benefits and marginal costs of a college education. If a voucher for $5,000 is given to the students, then colleges charge tuition of

When producers are hard to monitor and marginal costs differ across producers, ________ are an effective method to achieve efficient use of a ________.

When the production of a good creates an external cost, in order for taxes to be effective in achieving the efficient allocation of resources, the tax must be set equal to the

Pollution occurs when lumber is produced. If the lumber market is unregulated, there would be

-The above figure shows the marginal benefits and marginal costs of a college education. If no subsidies are paid, colleges charge tuition of

-The figure above shows the marginal social costs (MSC), marginal private benefits (MB), and marginal social benefits (MSB) of college education in Inland. Suppose Inland's government is considering subsidizing private colleges to ensure the efficient level of enrollment. What should be the amount of the subsidy (if any)?

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource. The market equilibrium with no government intervention is ________.

-The figure above shows the market for steel, the production of which creates pollution. a) What point represents the equilibrium price and what point represents the equilibrium quantity in an unregulated, competitive market? b) What area represents the deadweight loss of the unregulated, competitive market outcome? c) What point represents the efficient quantity? d) If the output level in part (c) was achieved through the use of a government imposed tax, what price would consumers pay? What price would the producers receive? What distance represents the amount of the tax? e) If government successfully uses marketable permits issued under a cap-and-trade policy to eliminate the external cost, what point represents how much output would be produced?

For a good with an external cost, the supply curve

-The table above shows the marginal costs and marginal benefits of college education. With public provision of the efficient level of college education, tuition is

All of the following are devices that governments can use to achieve a more efficient allocation of resources in the presence of external benefits EXCEPT

If a good has an external cost, then the marginal private cost curve

-Based on the data in the table above, the efficient level of output equals

What are ITQs? Where are they used?

-The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the equilibrium price is ________ per ton.