Question 1

The Coase theorem is the proposition that if property rights exist and are enforced,private transactions are

Accepted Answer

A) inefficient. 
B) efficient. 
C) inequitable. 
D) illegal. 
E) unnecessary. 
A) inefficient. 
B) efficient. 
C) inequitable. 
D) illegal. 
E) unnecessary.

Question 2

A chemical factory dumps waste into a river.The figure above shows the demand curve for the chemical (D)and the marginal private cost (MC)and marginal social cost (MSC)of producing it.
-In the figure above,when the market is unregulated and in equilibrium,marginal social cost ________ marginal benefit,and the quantity of chemical produced is ________.

Accepted Answer

A) exceeds;above the efficient quantity 
B) exceeds;below the efficient quantity 
C) is below;above the efficient quantity 
D) is below;below the efficient quantity 
E) equals;efficient 
A) exceeds;above the efficient quantity 
B) exceeds;below the efficient quantity 
C) is below;above the efficient quantity 
D) is below;below the efficient quantity 
E) equals;efficient

Question 3

In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution,the pollution tax must be set equal to the

Accepted Answer

A) marginal private cost. 
B) marginal external cost. 
C) marginal social cost. 
D) marginal benefit of polluting. 
E) price of the good. 
A) marginal private cost. 
B) marginal external cost. 
C) marginal social cost. 
D) marginal benefit of polluting. 
E) price of the good.

Question 4

-The figure above shows the market for annual influenza immunizations the United States.Area A is the

Accepted Answer

A) total deadweight loss when there is not the illustrated subsidy. 
B) remaining deadweight loss when there is the illustrated subsidy. 
C) gain in efficiency from the illustrated subsidy. 
D) loss in efficiency from the illustrated subsidy. 
E) consumer surplus with the illustrated subsidy. 
A) total deadweight loss when there is not the illustrated subsidy. 
B) remaining deadweight loss when there is the illustrated subsidy. 
C) gain in efficiency from the illustrated subsidy. 
D) loss in efficiency from the illustrated subsidy. 
E) consumer surplus with the illustrated subsidy.

Question 5

If a polluting producer is forced to pay a pollution charge,what is the effect on the supply and demand curves for the product?

Accepted Answer

A) The quantity supplied along the firm's supply curve increases. 
B) The firm's demand curve shifts leftward. 
C) The firm's supply curve shifts rightward. 
D) The firm's supply curve shifts leftward. 
E) Both the supply curve and the demand curve shift leftward. 
A) The quantity supplied along the firm's supply curve increases. 
B) The firm's demand curve shifts leftward. 
C) The firm's supply curve shifts rightward. 
D) The firm's supply curve shifts leftward. 
E) Both the supply curve and the demand curve shift leftward.

Question 6

-The figure above shows the market for education,a good possessing an external benefit.In order to attain the efficient number of students,a government subsidy must equal ________ per student.

Accepted Answer

A) $2,000 
B) $8,000 
C) $6,000 
D) $10,000 
E) $16,000 
A) $2,000 
B) $8,000 
C) $6,000 
D) $10,000 
E) $16,000

Question 7

-The figure above shows the market for annual influenza immunizations the United States.The efficient quantity of immunizations is

Accepted Answer

A) 14 million per year. 
B) 10 million per year. 
C) Between 14 and 21 million per year. 
D) Less than 10 million per year. 
E) 22 million per year. 
A) 14 million per year. 
B) 10 million per year. 
C) Between 14 and 21 million per year. 
D) Less than 10 million per year. 
E) 22 million per year.

Question 8

If tuition at a college is $30,000 and the external benefit of graduating from this college is $10,000,then
I.in the absence of any government intervention,the number of students graduating is less than the efficient number.
Ii.the government could increase the number of graduates by giving the college a $10,000 subsidy per student.
Iii.the government could increase the number of graduates by giving the students $10,000 vouchers.

Accepted Answer

A) i only 
B) i and ii 
C) i and iii 
D) ii and iii 
E) i,ii,and iii 
A) i only 
B) i and ii 
C) i and iii 
D) ii and iii 
E) i,ii,and iii

Question 9

If transactions costs are low,then assigning property rights in a market with external costs
I.increases the deadweight loss.
Ii.means private transactions are efficient.
Iii.means that only consumers must pay the external costs.

Accepted Answer

A) i only 
B) ii only 
C) ii and iii 
D) i and iii 
E) i and ii 
A) i only 
B) ii only 
C) ii and iii 
D) i and iii 
E) i and ii

Question 10

Use the idea of external costs to explain why some cities have laws against late-night rock concerts.

Accepted Answer

While many people might like to see a mi

Question 11

An example of someone bearing the burden of a negative production externality would be

Accepted Answer

A) Taylor living downwind from a smelly feedlot where pigs are raised. 
B) Jess's roommate smokes and she doesn't. 
C) Lynna's neighbors play loud music late at night. 
D) All of these are examples of someone bearing the burden of a negative production externality. 
E) None of these is an example of someone bearing the burden of a negative production externality. 
A) Taylor living downwind from a smelly feedlot where pigs are raised. 
B) Jess's roommate smokes and she doesn't. 
C) Lynna's neighbors play loud music late at night. 
D) All of these are examples of someone bearing the burden of a negative production externality. 
E) None of these is an example of someone bearing the burden of a negative production externality.

Question 12

Using the figure above,suppose a subsidy of $15,000 per student is provided to private colleges.Then,the market equilibrium occurs at a tuition of ________ a year and ________ million students.

Accepted Answer

A) $10,000;15 
B) $25,000;15 
C) $15,000;15 
D) $15,000;7.5 
E) $20,000;20 
A) $10,000;15 
B) $25,000;15 
C) $15,000;15 
D) $15,000;7.5 
E) $20,000;20

Question 13

-When young students are hungry,they can be disruptive and inattentive in class.Thus,providing lunch to students has external benefits.The figure above represents the market for school lunches before and after government vouchers are issued.
a.What is the unregulated private market equilibrium?
b.What is the efficient quantity of lunches?
c.What is the amount of the voucher necessary to move the economy to the efficient number of lunches?
d.When vouchers are used,what is the dollar price of the lunch that suppliers receive and what is the dollar price that consumers pay when the voucher is used?

Accepted Answer

a.If the market is left unregulated,4 mi

Question 14

If the marginal private cost of producing one kilowatt of power in California is ten cents and the marginal social cost of each kilowatt is fourteen cents,then the marginal external cost equals ________ per kilowatt.

Accepted Answer

A) ten cents 
B) nineteen cents 
C) four cents 
D) zero cents 
E) fourteen cents 
A) ten cents 
B) nineteen cents 
C) four cents 
D) zero cents 
E) fourteen cents

Question 15

Marginal social benefit equals

Accepted Answer

A) marginal external benefit. 
B) marginal private benefit. 
C) marginal private benefit minus marginal external benefit. 
D) marginal private benefit plus marginal external benefit. 
E) marginal external benefit minus marginal private benefit. 
A) marginal external benefit. 
B) marginal private benefit. 
C) marginal private benefit minus marginal external benefit. 
D) marginal private benefit plus marginal external benefit. 
E) marginal external benefit minus marginal private benefit.

Question 16

If a good has an external cost,the

Accepted Answer

A) unregulated competitive market outcome is efficient. 
B) marginal private cost reflects the external cost. 
C) unregulated competitive market outcome is inefficient. 
D) marginal social benefit is equal to the marginal social cost when the market is in equilibrium. 
E) external benefit must equal the external cost. 
A) unregulated competitive market outcome is efficient. 
B) marginal private cost reflects the external cost. 
C) unregulated competitive market outcome is inefficient. 
D) marginal social benefit is equal to the marginal social cost when the market is in equilibrium. 
E) external benefit must equal the external cost.

Question 17

The cost of producing an additional unit of a good or service that falls on people other than the producer is

Accepted Answer

A) the marginal cost. 
B) represented by the demand curve. 
C) represented by the supply curve. 
D) the marginal external cost. 
E) the marginal social cost. 
A) the marginal cost. 
B) represented by the demand curve. 
C) represented by the supply curve. 
D) the marginal external cost. 
E) the marginal social cost.

Question 18

When a person receives a flu vaccination,the ________ is the additional benefit the person receives from getting the shot.

Accepted Answer

A) marginal private benefit 
B) marginal external benefit 
C) marginal social benefit 
D) marginal social cost 
E) marginal external cost 
A) marginal private benefit 
B) marginal external benefit 
C) marginal social benefit 
D) marginal social cost 
E) marginal external cost

Question 19

-The figure above shows the market for a good with an external benefit.When 6 units are produced,marginal social benefit equals ________ and marginal external benefit equals ________.

Accepted Answer

A) $200;$150 
B) $350;$200 
C) $200;$50 
D) $350;$150 
E) $150;$250 
A) $200;$150 
B) $350;$200 
C) $200;$50 
D) $350;$150 
E) $150;$250

Question 20

-The figure above shows the market for annual influenza immunizations the United States.The marginal external benefit associated with immunizing 14 million people is ________ per person per year.

Accepted Answer

A) $40 
B) $20 
C) $90 
D) $30 
E) $60 
A) $40 
B) $20 
C) $90 
D) $30 
E) $60

The Coase theorem is the proposition that if property rights exist and are enforced,private transactions are

In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution,the pollution tax must be set equal to the

-The figure above shows the market for annual influenza immunizations the United States.Area A is the

If a polluting producer is forced to pay a pollution charge,what is the effect on the supply and demand curves for the product?

-The figure above shows the market for education,a good possessing an external benefit.In order to attain the efficient number of students,a government subsidy must equal ________ per student.

-The figure above shows the market for annual influenza immunizations the United States.The efficient quantity of immunizations is

If transactions costs are low,then assigning property rights in a market with external costs I.increases the deadweight loss. Ii.means private transactions are efficient. Iii.means that only consumers must pay the external costs.

Use the idea of external costs to explain why some cities have laws against late-night rock concerts.

An example of someone bearing the burden of a negative production externality would be

Using the figure above,suppose a subsidy of $15,000 per student is provided to private colleges.Then,the market equilibrium occurs at a tuition of a year and million students.

If the marginal private cost of producing one kilowatt of power in California is ten cents and the marginal social cost of each kilowatt is fourteen cents,then the marginal external cost equals ________ per kilowatt.

Marginal social benefit equals

If a good has an external cost,the

The cost of producing an additional unit of a good or service that falls on people other than the producer is

When a person receives a flu vaccination,the ________ is the additional benefit the person receives from getting the shot.

-The figure above shows the market for a good with an external benefit.When 6 units are produced,marginal social benefit equals and marginal external benefit equals .

-The figure above shows the market for annual influenza immunizations the United States.The marginal external benefit associated with immunizing 14 million people is ________ per person per year.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 9: Externalities: Pollution, education, and Health Care

The Coase theorem is the proposition that if property rights exist and are enforced,private transactions are

In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution,the pollution tax must be set equal to the

-The figure above shows the market for annual influenza immunizations the United States.Area A is the

If a polluting producer is forced to pay a pollution charge,what is the effect on the supply and demand curves for the product?

-The figure above shows the market for education,a good possessing an external benefit.In order to attain the efficient number of students,a government subsidy must equal ________ per student.

-The figure above shows the market for annual influenza immunizations the United States.The efficient quantity of immunizations is

If transactions costs are low,then assigning property rights in a market with external costs I.increases the deadweight loss. Ii.means private transactions are efficient. Iii.means that only consumers must pay the external costs.

Use the idea of external costs to explain why some cities have laws against late-night rock concerts.

An example of someone bearing the burden of a negative production externality would be

Using the figure above,suppose a subsidy of $15,000 per student is provided to private colleges.Then,the market equilibrium occurs at a tuition of ________ a year and ________ million students.

If the marginal private cost of producing one kilowatt of power in California is ten cents and the marginal social cost of each kilowatt is fourteen cents,then the marginal external cost equals ________ per kilowatt.

Marginal social benefit equals

If a good has an external cost,the

The cost of producing an additional unit of a good or service that falls on people other than the producer is

When a person receives a flu vaccination,the ________ is the additional benefit the person receives from getting the shot.

-The figure above shows the market for a good with an external benefit.When 6 units are produced,marginal social benefit equals ________ and marginal external benefit equals ________.

-The figure above shows the market for annual influenza immunizations the United States.The marginal external benefit associated with immunizing 14 million people is ________ per person per year.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Using the figure above,suppose a subsidy of $15,000 per student is provided to private colleges.Then,the market equilibrium occurs at a tuition of a year and million students.

-The figure above shows the market for a good with an external benefit.When 6 units are produced,marginal social benefit equals and marginal external benefit equals .