Question 1

The marginal social benefit is the sum of the benefit enjoyed by the consumer of an additional unit of a good or service plus the marginal benefit enjoyed by others.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  0. 
B)  10 million. 
C)  15 million. 
D)  25 million. 
A)  0. 
B)  10 million. 
C)  15 million. 
D)  25 million.

Question 3

Does the existence of the University of Oklahoma affect citizens who do not attend the University?

Accepted Answer

Education creates an external benefit. H

Question 4

-The marginal cost of educating a student is $30,000, and this cost is independent of the number of students. The figure above shows the marginal private benefit that a student receives from education. An independent government agency determines that the efficient number of students is 40,000. What is the marginal social benefit from education?

Accepted Answer

A)  It depends on the demand. 
B)  $20,000 
C)  $10,000 
D)  $40,000 
A)  It depends on the demand. 
B)  $20,000 
C)  $10,000 
D)  $40,000

Question 5

"According to the Coase theorem, if Gabriel wants the local television station to cease having helicopters fly over his house at night, he will be more likely to be able to reach an agreement with the station if the property right to the airspace is clearly defined and the transaction costs of negotiating are high." Is this statement true or false? Explain your answer.

Accepted Answer

The statement is False. The first part o

Question 6

-The above figure shows the marginal private benefit and marginal social cost of a college education. A $10,000 subsidy to colleges results in a college charging tuition of

Accepted Answer

A)  $0. 
B)  $10,000. 
C)  $20,000. 
D)  $30,000. 
A)  $0. 
B)  $10,000. 
C)  $20,000. 
D)  $30,000.

Question 7

There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry, ________.

Accepted Answer

A)  the cap-and-trade policy will not make the amount of pollution efficient 
B)  Joe's industry will sell permits to Harry's industry 
C)  Harry's industry will sell permits to Joe's industry 
D)  Harry's industry and Joe's industry will emit the same quantity of sulfur dioxide 
A)  the cap-and-trade policy will not make the amount of pollution efficient 
B)  Joe's industry will sell permits to Harry's industry 
C)  Harry's industry will sell permits to Joe's industry 
D)  Harry's industry and Joe's industry will emit the same quantity of sulfur dioxide

Question 8

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. It has been suggested that there should be a limited number of climbers allowed on the mountain each year to limit the environmental degradation that occurs. This method of achieving efficient use of a common resource is most like

Accepted Answer

A)  a property right. 
B)  an individual transferable quota. 
C)  a production quota. 
D)  a marginal social benefit right. 
A)  a property right. 
B)  an individual transferable quota. 
C)  a production quota. 
D)  a marginal social benefit right.

Question 9

-The above figure shows the marginal benefits and marginal costs of a college education. What is the amount of the external benefit in the figure?

Accepted Answer

A)  $0 
B)  $5,000 
C)  $10,000 
D)  $15,000 
A)  $0 
B)  $5,000 
C)  $10,000 
D)  $15,000

Question 10

When external costs are present and the government imposes a tax equal to the marginal external cost, then

Accepted Answer

A)  efficiency can be achieved. 
B)  transaction costs will be high. 
C)  the marginal benefit of the external cost will fall. 
D)  property rights must have already been established. 
A)  efficiency can be achieved. 
B)  transaction costs will be high. 
C)  the marginal benefit of the external cost will fall. 
D)  property rights must have already been established.

Question 11

The outcome from a voucher scheme is efficient when the government makes the value of the voucher equal to ________.

Accepted Answer

A)  marginal external cost 
B)  marginal external benefit 
C)  external cost 
D)  external benefit 
A)  marginal external cost 
B)  marginal external benefit 
C)  external cost 
D)  external benefit

Question 12

A common resource is used efficiently if

Accepted Answer

A)  the output is maximized. 
B)  marginal social benefit equals marginal social cost. 
C)  marginal private benefit equals marginal private cost. 
D)  marginal social benefit is maximized. 
A)  the output is maximized. 
B)  marginal social benefit equals marginal social cost. 
C)  marginal private benefit equals marginal private cost. 
D)  marginal social benefit is maximized.

Question 13

"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is incorrect. Ed

Question 14

An externality can be a

Accepted Answer

A)  cost or a benefit. 
B)  benefit but not a cost. 
C)  cost but not a benefit. 
D)  marginal cost but not a total cost. 
A)  cost or a benefit. 
B)  benefit but not a cost. 
C)  cost but not a benefit. 
D)  marginal cost but not a total cost.

Question 15

Beautification of the national highways through the planting of shrubs and wildflowers will

Accepted Answer

A)  be profitable for a private landscaping company because they can charge passing drivers. 
B)  benefit even people who do not help pay. 
C)  provide a flow of services that are rival in consumption. 
D)  provide a flow of services that involve excludable consumption. 
A)  be profitable for a private landscaping company because they can charge passing drivers. 
B)  benefit even people who do not help pay. 
C)  provide a flow of services that are rival in consumption. 
D)  provide a flow of services that involve excludable consumption.

Question 16

-The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then

Accepted Answer

A)  a subsidy of $10,000 per student paid to colleges will achieve efficiency. 
B)  a tax of $10,000 per student imposed on the colleges will achieve efficiency. 
C)  10 million students per year is the efficient number students. 
D)  None of the above answers are correct. 
A)  a subsidy of $10,000 per student paid to colleges will achieve efficiency. 
B)  a tax of $10,000 per student imposed on the colleges will achieve efficiency. 
C)  10 million students per year is the efficient number students. 
D)  None of the above answers are correct.

Question 17

-In the above figure, the efficient level of chemicals produced per week is

Accepted Answer

A)  0 tons. 
B)  4 tons. 
C)  between 5 and 7 tons. 
D)  8 tons. 
A)  0 tons. 
B)  4 tons. 
C)  between 5 and 7 tons. 
D)  8 tons.

Question 18

-In the figure above, if the market is unregulated,

Accepted Answer

A)  more than the efficient amount of output will be produced. 
B)  less than the efficient amount of output will be produced. 
C)  the allocation of resources will be efficient because the efficient amount of output will be produced. 
D)  the deadweight loss will be zero. 
A)  more than the efficient amount of output will be produced. 
B)  less than the efficient amount of output will be produced. 
C)  the allocation of resources will be efficient because the efficient amount of output will be produced. 
D)  the deadweight loss will be zero.

Question 19

-The figure above shows the marginal social costs (MSC), marginal private benefits (MB), and marginal social benefits (MSB) of college education in Inland. If Inland's government wants to provide the efficient level of education, it must set tuition at ________ per year to ensure that ________ million students are enrolled.

Accepted Answer

A)  $5,000; 0.8 
B)  $6,000; 0.6 
C)  $7,000; 0.8 
D)  $5,000; 0.6 
A)  $5,000; 0.8 
B)  $6,000; 0.6 
C)  $7,000; 0.8 
D)  $5,000; 0.6

Question 20

The figure shows the unregulated market for a pesticide, where S is the supply curve and D is the demand curve. The demand curve is the same as the MSB curve. When factories produce the pesticide, they also create waste, which they dump into a lake on the outskirts of the town. The marginal external cost of the dumped waste is equal to the marginal private cost of producing the pesticide.
-In the figure above, if the output is 180 tons per month, what is the marginal social cost of producing the pesticide?

Accepted Answer

A)  $60 
B)  $30 
C)  $40 
D)  $50 
A)  $60 
B)  $30 
C)  $40 
D)  $50

The marginal social benefit is the sum of the benefit enjoyed by the consumer of an additional unit of a good or service plus the marginal benefit enjoyed by others.

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

Does the existence of the University of Oklahoma affect citizens who do not attend the University?

-The above figure shows the marginal private benefit and marginal social cost of a college education. A $10,000 subsidy to colleges results in a college charging tuition of

There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry, ________.

-The above figure shows the marginal benefits and marginal costs of a college education. What is the amount of the external benefit in the figure?

When external costs are present and the government imposes a tax equal to the marginal external cost, then

The outcome from a voucher scheme is efficient when the government makes the value of the voucher equal to ________.

A common resource is used efficiently if

"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer.

An externality can be a

Beautification of the national highways through the planting of shrubs and wildflowers will

-The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then

-In the above figure, the efficient level of chemicals produced per week is

-In the figure above, if the market is unregulated,

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 17: Externalities

The marginal social benefit is the sum of the benefit enjoyed by the consumer of an additional unit of a good or service plus the marginal benefit enjoyed by others.

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

Does the existence of the University of Oklahoma affect citizens who do not attend the University?

-The above figure shows the marginal private benefit and marginal social cost of a college education. A $10,000 subsidy to colleges results in a college charging tuition of

There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry, ________.

-The above figure shows the marginal benefits and marginal costs of a college education. What is the amount of the external benefit in the figure?

When external costs are present and the government imposes a tax equal to the marginal external cost, then

The outcome from a voucher scheme is efficient when the government makes the value of the voucher equal to ________.

A common resource is used efficiently if

"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer.

An externality can be a

Beautification of the national highways through the planting of shrubs and wildflowers will

-The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then

-In the above figure, the efficient level of chemicals produced per week is

-In the figure above, if the market is unregulated,

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters