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

Which of the following is true?

Which of the following is true regarding pollution charges? I.They force a polluter to pay a price for its pollution. Ii.They are based on the marginal external cost of pollution. Iii.The fee that produces the efficient amount of pollution is easily determined.

If an external benefit is present in the consumption of a good or service,then

To eliminate the inefficiency resulting from pollution that creates an external cost,the government can impose a pollution tax on producers that is equal to the

Which of the following is a common method used by government to cope with the situation in which production of a good creates an external cost?

Legally established titles to the ownership,use,and disposal of factors of production are referred to as

If the production of a good creates an external cost,is the supply curve the same as the marginal social cost or the same as the marginal private cost curve or both?

For a product with external benefits that is produced in a competitive,unregulated market,how can the resulting market output be described?

-The figure above shows the market for steel,the production of which creates pollution. a.What point represents the equilibrium price and what point represents the equilibrium quantity in an unregulated,competitive market? b.What area represents the deadweight loss of the unregulated,competitive market outcome? c.What point represents the efficient quantity? d.If the output level in part (c)was achieved through the use of a government imposed tax,what price would consumers pay? What price would the producers receive? What distance represents the amount of the tax? e.If government successfully uses marketable permits to eliminate the external cost,what point represents how much output would be produced?

Using the figure above,suppose a subsidy of $15,000 per student is provided to private colleges.When the market is in equilibrium,marginal social benefit ________ marginal cost,and the number of students enrolled is ________.

Food stamps provided by the government to households are an example of

If the marginal private cost of running a car is $0.30 a mile and the marginal external cost is $0.10,what is the marginal social cost?

A voucher is

For a good whose production creates an external cost,the efficient quantity of output is

Suppose unregulated production of pesticides results in an equilibrium price and quantity of $400 and 1,000 tons per day,respectively,and a marginal external cost of $10 a ton. a.If the government were to eliminate the external cost by using pollution charges,what should the pollution charge be set at? b.If the government were to eliminate the external cost by using taxes,what should the tax equal? c.Would the government actions described above affect the quantity of pesticides produced? If yes,how? If no,why not?

A government subsidy paid to a firm I.increases the demand for the good. Ii.has no effect on the supply of the good. Iii.leads to an increase in the equilibrium quantity.

Marginal social cost is the

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

-The figure shows the market for college education.If the market for education is competitive and with no government intervention,the equilibrium quantity of college students is ________ million and the efficient quantity of college students is ________ million.

When logging in the Pacific Northwest destroys forests that hikers would have used for eco-tourism,the destruction of the trails is an example of