Exam 5: Externalities, environmental Policy, and Public Goods

Sefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service.The value of the service to each of them is $50 and it costs $80 to hire a housecleaner.Suppose Bella is lazy and a spendthrift and Sefronia suspects that Bella will be willing to pay $80.What is Sefronia likely to do,given that she is as rational as any other person?

Which of the following displays these two characteristics: rivalry and nonexcludability?

Which of the following displays these two characteristics: nonrivalry and nonexcludability in consumption?

Figure 5-6 shows the market for measles vaccinations,a product whose use generates positive externalities. -Refer to Figure 5-6.What is the economically efficient output level?

If the social cost of producing a good or service exceeds the private cost

Consider the stock of ocean tuna which is massively overfished.It is rational for an individual to exploit the resource rather than to conserve the stock because

Mandatory motorcycle helmet laws are designed to reduce the severity of injuries resulting from motorcycle involvement in traffic accidents.In this sense,these mandatory helmet laws are reducing ________ of risky behavior.

Which of the following displays these two characteristics: nonrivalry and excludability?

Figure 5-13 illustrates the market for gasoline before and after the government imposes a tax to bring about the efficient level of gasoline production. -Refer to Figure 5-13.The efficient equilibrium quantity of gasoline is ________ million gallons per month.

Private producers have no incentive to provide public goods because

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

Economists working at federal government agencies have estimated that the marginal social cost of carbon is about

"Free riding" is a characteristic of which type of good?

Article Summary RealtyTrac,a provider of housing data and analytics for the real estate industry,conducted an analysis of home values,appreciation,and property taxes in zip codes where either a Whole Foods Market or a Trader Joe's are located.The findings are as follows: -Homeowners near a Trader Joe's experienced an average 40 percent increase in home value since the date of purchase,had average home values of just over $590,000,and paid an average of $8,536 in annual property taxes. -Homeowners near a Whole Foods Market experienced an average 34 percent increase in home value since the date of purchase,had average home values of just over $560,000,and paid an average of $5,382 in annual property taxes. - Homeowners in general for all zip codes nationwide experienced an average 34 percent increase in home value since the date of purchase,had average home values of just over $260,000,and paid an average of $3,239 in annual property taxes. -Refer to the Article Summary.Assuming the findings are correct and all else equal,higher increases in home values which result from close proximity to a Trader Joe's are an example of a ________ due to the location of the Trader Joe's.

What is a "social cost" of production?

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

Pollution is an example of a

Explain how mandatory seat belt laws may reduce the negative externalities of risky behavior.

Overuse of a common resource may be avoided by all of the following methods except

Article Summary RealtyTrac,a provider of housing data and analytics for the real estate industry,conducted an analysis of home values,appreciation,and property taxes in zip codes where either a Whole Foods Market or a Trader Joe's are located.The findings are as follows: -Homeowners near a Trader Joe's experienced an average 40 percent increase in home value since the date of purchase,had average home values of just over $590,000,and paid an average of $8,536 in annual property taxes. -Homeowners near a Whole Foods Market experienced an average 34 percent increase in home value since the date of purchase,had average home values of just over $560,000,and paid an average of $5,382 in annual property taxes. - Homeowners in general for all zip codes nationwide experienced an average 34 percent increase in home value since the date of purchase,had average home values of just over $260,000,and paid an average of $3,239 in annual property taxes. -Refer to the Article Summary.Assuming the findings are correct and all else equal,people who do not shop at Trader Joe's can still benefit from living near the store,as is shown by the higher home values.As a result,the marginal social benefit from living near a Trader Joe's is ________ the marginal private benefit to those who shop at Trader Joe's.