Exam 5: Externalities, environmental Policy, and Public Goods

Classifying a good as rival means

When there is a negative externality,the private cost of production ________ the social cost of production.

Negative externalities and the tragedy of the commons are problems that have a common source.What is this common source?

Alternative approaches for reducing carbon dioxide emissions are

Figure 5-7 -Refer to Figure 5-7.The marginal benefit of reducing pollution curve is the same curve as

If the social benefit of consuming a good or a service exceeds the private benefit

Parents who do not have their children immunized and attempt to benefit from other parents who did have their own children immunized are exhibiting an economic behavior known as

Global warming refers to the effect of global pollutants such as carbon dioxide on climates on the earth.Climate-induced changes in temperatures affect,among other things,agriculture.Which of the following is a reason why policymakers are still debating if this problem should be addressed and how it should be addressed?

Which of the following is an example of a positive externality?

What is the rationale behind a marketable emission allowance scheme?

Which of the following statements about the economically efficient level of air pollution is correct?

For certain public projects such as building a dam on a river or a bridge to an island,what procedure is a government likely to use to determine what quantity of a public good should be supplied?

Figure 5-1 Figure 5-1 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 5-1.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,the diagram shows

The Wilfer Resort Hotel has a spectacular view of a pine forest along a river bank.Suppose a commercial logger has purchased the pine forest and is planning to clear-cut the forest in a way that has a negative impact on the resort.Can the two parties arrive at a Coasian solution and if so what is it?

Economists generally favor the use of tradable emissions allowances to reduce pollution.However,the use of these allowances has been criticized by some environmentalists.Which of the following describes this criticism?

Which of the following would result in a positive externality?

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

Figure 5-15 Figure 5-15 shows the market for Atlantic salmon, a common resource. The current market equilibrium output of Q₁ is not the economically efficient output. The economically efficient output is Q₂. -Refer to Figure 5-15.The current market equilibrium output is partly the result of overfishing.In that case,what does S₁ represent?

Consider a situation in which a utility company emits high levels of sulfur dioxide and the company is not liable for the damages its pollution causes.According to the Coase theorem,government action is ________ to achieve an ________ amount of pollution.

Figure 5-12 College education benefits society by producing a more employable workforce, reducing crime and creating a better informed citizenry. Thus, the social benefits of college education exceed the private benefits for any level of college education. This is illustrated in Figure 5-12. -Refer to Figure 5-12.One way to obtain the economically efficient amount of college education is for governments to subsidize college education.What is the size of the per-student Pigovian subsidy that the government must provide to internalize the external benefits? (Note that the subsidy can be granted to the education institutions or to the students directly or indirectly; for example,through low-interest student loans.)