Exam 17: Externalities

Suppose that recycling rubber for sneakers creates an external benefit of $2.00 per ton of rubber. There are no external costs. The efficient amount of rubber will be recycled when the government creates a

The marginal social cost of burning garbage in Houston is the sum of the marginal private cost and the marginal external cost." Is this assertion correct or incorrect?

"Suppose the market for aluminum is perfectly competitive and unregulated. If aluminum factories emit pollution, the marginal social cost of aluminum is less than the market price." True or false? Explain.

-In the above figure, if a subsidy is granted to producers that generates an efficient level of production, then the deadweight loss will be

With marketable permits to pollute, efficiency can be obtained if

-In the figure above, if a tax is imposed that generates an efficient allocation of resources, then consumers will pay a price of

Vouchers create the efficient outcome only if production is such that the marginal social cost

With the debris of more than 50 years of climbing on the beautiful high slopes - oxygen canisters, tents, backpacks and even some bodies - Mount Everest has been called the world's highest garbage dump. Currently climbers must pay only a $3,000 trash-collection fee, which is woefully less than the actual cost of collecting trash. If climbers had to pay a higher trash-collection fee, the use of this common resource would

-The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output

Why does government provide educational opportunities in the form of vouchers, subsidies, and public provision?

-In the above table, if the market is perfectly competitive and unregulated, the equilibrium output will be

-In the above figure, to achieve efficiency, the government should

The granite boulders in Rocky Mountain National Park are a favored place among talented climbers who specialize in the art of bouldering, or climbing harder (but shorter) routes without tying into a rope. Climbers have taken to (illegally) stashing foam crash pads underneath the boulders but marmots and other rodents chew up the pads and the litter is spread by the wind. The pristine National Park is most like a

-The figure above illustrates the problem of overcrowding and external costs experienced during the summer months in the state park. If the market is unregulated, in equilibrium the external cost of visiting the state park is given by the distance between

The HPV vaccine protects against human papillomavirus (HPV) that causes cancer. It protects both the person getting the vaccine and the sexual partners of that person. To encourage the efficient number of people to be vaccinated the government could

-In the figure above, if the market is unregulated, at the equilibrium output the marginal external cost is

Keeping in mind the Coase theorem, in the figure above, if the pesticide factories own the lake, the market does what?

-In the above table, if the market is perfectly competitive and unregulated, the equilibrium price will be

An example of an activity that generates an external cost is

What is the tragedy of the commons?