Question 1

Which of the following actions would most likely have an external benefit?

Accepted Answer

A) eating a peanut butter sandwich 
B) throwing trash out your car window as you drive to class 
C) sleeping 
D) attending college 
E) developing a better marketing strategy for Honda 
A) eating a peanut butter sandwich 
B) throwing trash out your car window as you drive to class 
C) sleeping 
D) attending college 
E) developing a better marketing strategy for Honda

Question 2

-The figure above shows the costs and benefits associated with producing paper.What is the marginal external cost when output is 6 tons?

Accepted Answer

A) $1,600 
B) $1,200 
C) $1,000 
D) $600 
E) $400 
A) $1,600 
B) $1,200 
C) $1,000 
D) $600 
E) $400

Question 3

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,the unregulated market equilibrium occurs at a price of ________ a ton and quantity of ________ tons.

Accepted Answer

A) $100;4,000 
B) $150;2,000 
C) $150;4,000 
D) $225;4,000 
E) $100;2,000 
A) $100;4,000 
B) $150;2,000 
C) $150;4,000 
D) $225;4,000 
E) $100;2,000

Question 4

Three methods the government can use to cope with the external cost from pollution are

Accepted Answer

A) pollution taxes,subsidies,and outright bans. 
B) pollution taxes,regulations,and subsidies. 
C) marketable permits,pollution subsidies,and pollution taxes. 
D) pollution charges,marketable permits,and pollution limits. 
E) vouchers,pollution subsidies,and pollution taxes. 
A) pollution taxes,subsidies,and outright bans. 
B) pollution taxes,regulations,and subsidies. 
C) marketable permits,pollution subsidies,and pollution taxes. 
D) pollution charges,marketable permits,and pollution limits. 
E) vouchers,pollution subsidies,and pollution taxes.

Question 5

Issuing marketable permits to firms that produce a product with external costs will give the firms the incentive to

Accepted Answer

A) declare bankruptcy. 
B) buy and sell the permits amongst themselves. 
C) escape the problem completely. 
D) quit producing the output. 
E) increase the external cost because they no longer need to deal with the externality. 
A) declare bankruptcy. 
B) buy and sell the permits amongst themselves. 
C) escape the problem completely. 
D) quit producing the output. 
E) increase the external cost because they no longer need to deal with the externality.

Question 6

-The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city.If the marginal external cost is $10 per ton at every quantity of steel produced,the equilibrium quantity when the steel industry is unregulated is ________ tons per week.

Accepted Answer

A) 5 
B) 15 
C) 20 
D) 25 
E) 10 
A) 5 
B) 15 
C) 20 
D) 25 
E) 10

Question 7

The production of a good or service by an authority that receives the most of its revenue from the government is referred to as

Accepted Answer

A) public provision. 
B) private subsidies. 
C) vouchers. 
D) copyrights. 
E) Coasian production. 
A) public provision. 
B) private subsidies. 
C) vouchers. 
D) copyrights. 
E) Coasian production.

Question 8

When government provides a good with an external benefit,to attain efficiency the price paid by consumers is set equal to the

Accepted Answer

A) marginal private benefit at the efficient level of output. 
B) marginal private cost at the efficient level of output. 
C) amount paid by taxpayers. 
D) market-determined price. 
E) marginal external benefit at the efficient level of output. 
A) marginal private benefit at the efficient level of output. 
B) marginal private cost at the efficient level of output. 
C) amount paid by taxpayers. 
D) market-determined price. 
E) marginal external benefit at the efficient level of output.

Question 9

What is the Coase theorem? What conditions need to be present for this theorem to work?

Accepted Answer

The Coase theorem states that if propert

Question 10

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market,the number of immunizations per year is ________ and the efficient number of immunizations per year is ________.

Accepted Answer

A) 14 million;20 million 
B) 20 million;22 million 
C) 14 million;22 million 
D) 14 million;10 million 
E) 10 million;14 million 
A) 14 million;20 million 
B) 20 million;22 million 
C) 14 million;22 million 
D) 14 million;10 million 
E) 10 million;14 million

Question 11

In the figure above,suppose a subsidy is provided to private colleges.What amount of subsidy will ensure the efficient number of students?

Accepted Answer

A) $10,000 
B) $25,000 
C) $15,000 
D) $5,000 
E) $20,000 
A) $10,000 
B) $25,000 
C) $15,000 
D) $5,000 
E) $20,000

Question 12

When government levies pollution taxes on sellers to eliminate the inefficiency from the cost of pollution,the result is

Accepted Answer

A) a lower price. 
B) a smaller quantity produced. 
C) a smaller cost of production. 
D) a rightward shift of the supply curve. 
E) leftward shifts of the supply and demand curves. 
A) a lower price. 
B) a smaller quantity produced. 
C) a smaller cost of production. 
D) a rightward shift of the supply curve. 
E) leftward shifts of the supply and demand curves.

Question 13

The additional benefit that Marvin gets from being vaccinated against the flu is known as the

Accepted Answer

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

Question 14

The existence of marginal external benefits for a product like higher education creates a deadweight loss for society because,without government intervention,________ would be consumed and ________ would be produced.

Accepted Answer

A) more than the efficient amount;more than the efficient amount 
B) more than the efficient amount;less than the efficient amount 
C) less than the efficient amount;more than the efficient amount 
D) less than the efficient amount;less than the efficient amount 
E) the efficient amount;the efficient amount 
A) more than the efficient amount;more than the efficient amount 
B) more than the efficient amount;less than the efficient amount 
C) less than the efficient amount;more than the efficient amount 
D) less than the efficient amount;less than the efficient amount 
E) the efficient amount;the efficient amount

Question 15

-The table above gives the private costs and external costs of producing paper.
a.Complete the table by finding the marginal social cost at each level of production.
b.If the market is competitive and is left unregulated and 400 tons of paper are produced,what is the price of a ton of paper?
c.If the government imposes a tax equal to the external cost at each level of production,what price would be charged if 400 tons are produced?

Accepted Answer

@#IMG-DLM& a.The table above completes the margina

Question 16

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the Coase theorem can be used in this market,output equals ________ kilowatt hours per day.

Accepted Answer

A) 0 
B) 150 billion 
C) 200 billion 
D) 100 billion 
E) more than 200 billion 
A) 0 
B) 150 billion 
C) 200 billion 
D) 100 billion 
E) more than 200 billion

Question 17

-The figure above shows a tax imposed on a good with an external cost.The area of the rectangle abcd equals

Accepted Answer

A) the MSB. 
B) the total tax revenue collected by the government. 
C) the amount of pollution tax per ton. 
D) the MC. 
E) the deadweight loss. 
A) the MSB. 
B) the total tax revenue collected by the government. 
C) the amount of pollution tax per ton. 
D) the MC. 
E) the deadweight loss.

Which of the following actions would most likely have an external benefit?

-The figure above shows the costs and benefits associated with producing paper.What is the marginal external cost when output is 6 tons?

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,the unregulated market equilibrium occurs at a price of a ton and quantity of tons.

Three methods the government can use to cope with the external cost from pollution are

Issuing marketable permits to firms that produce a product with external costs will give the firms the incentive to

-The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city.If the marginal external cost is $10 per ton at every quantity of steel produced,the equilibrium quantity when the steel industry is unregulated is ________ tons per week.

The production of a good or service by an authority that receives the most of its revenue from the government is referred to as

When government provides a good with an external benefit,to attain efficiency the price paid by consumers is set equal to the

What is the Coase theorem? What conditions need to be present for this theorem to work?

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market,the number of immunizations per year is and the efficient number of immunizations per year is .

In the figure above,suppose a subsidy is provided to private colleges.What amount of subsidy will ensure the efficient number of students?

When government levies pollution taxes on sellers to eliminate the inefficiency from the cost of pollution,the result is

The additional benefit that Marvin gets from being vaccinated against the flu is known as the

The existence of marginal external benefits for a product like higher education creates a deadweight loss for society because,without government intervention, would be consumed and would be produced.

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the Coase theorem can be used in this market,output equals ________ kilowatt hours per day.

-The figure above shows a tax imposed on a good with an external cost.The area of the rectangle abcd equals

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

Which of the following actions would most likely have an external benefit?

-The figure above shows the costs and benefits associated with producing paper.What is the marginal external cost when output is 6 tons?

Three methods the government can use to cope with the external cost from pollution are

Issuing marketable permits to firms that produce a product with external costs will give the firms the incentive to

-The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city.If the marginal external cost is $10 per ton at every quantity of steel produced,the equilibrium quantity when the steel industry is unregulated is ________ tons per week.

The production of a good or service by an authority that receives the most of its revenue from the government is referred to as

When government provides a good with an external benefit,to attain efficiency the price paid by consumers is set equal to the

What is the Coase theorem? What conditions need to be present for this theorem to work?

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market,the number of immunizations per year is ________ and the efficient number of immunizations per year is ________.

In the figure above,suppose a subsidy is provided to private colleges.What amount of subsidy will ensure the efficient number of students?

When government levies pollution taxes on sellers to eliminate the inefficiency from the cost of pollution,the result is

The additional benefit that Marvin gets from being vaccinated against the flu is known as the

The existence of marginal external benefits for a product like higher education creates a deadweight loss for society because,without government intervention,________ would be consumed and ________ would be produced.

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the Coase theorem can be used in this market,output equals ________ kilowatt hours per day.

-The figure above shows a tax imposed on a good with an external cost.The area of the rectangle abcd equals

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

-The figure above shows the market for annual influenza immunizations the United States.If the government does not intervene in this market,the number of immunizations per year is and the efficient number of immunizations per year is .

The existence of marginal external benefits for a product like higher education creates a deadweight loss for society because,without government intervention, would be consumed and would be produced.