Exam 5: Externalities, environmental Policy, and Public Goods

The U.S.government has frequently used a "command-and-control" approach in dealing with pollution.Which of the following describes this approach?

When there is a positive externality

An externality refers to economic events outside a market.

Ronald Coase was awarded the 1991 Nobel Prize in Economics primarily for addressing problems related to externalities.Which of the following describes Coase's work?

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

In the city of Alvarez,with the exception of guide dogs for blind people,all dogs are banned from its three public parks,regardless of whether the animals are leashed.Many residents are pushing for a change in policy.Canine lover Sara Northridge observed,"There are 800 or more homes here.There are three parks within 10 minutes,and almost everyone has a dog,but we can't take our dogs there." Others fear that allowing dogs would detract from their enjoyment of the parks.Tim Cortis retorted,"We're not preventing dog lovers from enjoying the park,just come without your dog." Which of the following is a way of dealing with the problem by assigning property rights to a particular group?

The cost borne by a producer in the production of a good or service is called

The "tragedy of the commons" refers to the phenomenon where

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 S2 represent?

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 actual price of gasoline paid by consumers after the tax is implemented is ________ per gallon.

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

An external benefit is created when you pursue a college education.

A tragedy of the commons occurs when a resource is

Figure 5-2 shows a market with a negative externality. -Refer to Figure 5-2.The private profit-maximizing quantity for the firm is

A private good is

Which of the following describes a positive externality?

Figure 5-6 shows the market for measles vaccinations,a product whose use generates positive externalities. -Refer to Figure 5-6.What does D1 represent?

What is a market failure?

Which of the following describes how a positive externality affects a competitive market?

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.Should they hire a housecleaner?