Exam 15: Externalities, Environmental Policy and Public Goods

Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?

An example, from the list below, of a common resource is

A product is considered to be excludable if it is jointly owned by all members of a community.

If you burn your trash in the back yard in spite of regulations against it, then you are

Compare two situations.(A)A firm is not legally responsible for damages that result from air pollution caused by its production of steel.(B)A firm is legally responsible for damages that result from its production of steel.Ronald Coase argued that

Figure 15.5 Figure 15.5 shows a market with an externality.The current market equilibrium output of Q₁ is not the economically efficient output.The economically efficient output is Q₂. -Refer to Figure 15.5.Suppose the current market equilibrium output of Q₁ is not the economically efficient output because of an externality.The economically efficient output is Q₂.In that case, diagram shows

The economist who first proposed that governments use taxes and subsidies to correct for externalities was

What is the common source of negative externalities and the tragedy of the commons?

A negative externality is created by

The supply curve of a public goods shows

Government imposed quantitative limits on the amount of pollution firms are allowed to produce is an example of

'When it comes to public goods, individuals do not reveal their true preferences because it is not in their self-interest to do so.' Evaluate this statement.

When there is a positive externality,

Consider the following characteristics: a.low transactions costs b.small levels of pollution c.high levels of pollution d.clear assignment of property rights. Which of the above are assumptions behind the Coase Theorem?

Issuing marketable emission allowance permits to polluting firms will result in those firms polluting more than is socially desirable.

Figure 15.7 -Refer to Figure 15.7.What is the incremental benefit of increasing the quantity of pollution reduction from Q_B to Q_E units?

Haiti was once a heavily forested country.Today, 80 per cent of Haiti's forests have been cut down, primarily to be burned to create charcoal.The reduction in the number of trees has led to devastating floods when it rains heavily.This is an example of

One problem with using a command and control approach to pollution reduction is that the monitoring costs may be too high.

The tragedy of the commons was avoided in the Middle Ages by

If air pollution from a coal mine imposes external costs on people who live near the mine and the victims of the pollution could not legally enforce the right of their property not to be damaged, which of the following would be true concerning the amount of pollution reduction?