Question 1

A competitive,unregulated market would

Accepted Answer

A) produce too much pollution because pollution is an external cost. 
B) produce too little education because education has an external benefit. 
C) fail to achieve equilibrium if there are externalities present. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct. 
A) produce too much pollution because pollution is an external cost. 
B) produce too little education because education has an external benefit. 
C) fail to achieve equilibrium if there are externalities present. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct.

Question 2

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The difference between the marginal cost curve and the marginal social cost curve equals

Accepted Answer

A) marginal private cost. 
B) private cost. 
C) external cost. 
D) marginal external cost. 
E) Coasian cost. 
A) marginal private cost. 
B) private cost. 
C) external cost. 
D) marginal external cost. 
E) Coasian cost.

Question 3

-The figure above shows the market for a good with an external benefit.The efficient level of production is ________ units because ________.

Accepted Answer

A) 8;marginal benefit equals marginal cost 
B) 8;marginal cost is less than marginal social benefit 
C) 10;marginal cost equals marginal social benefit 
D) 10;marginal social benefit exceeds marginal benefit 
E) 8;marginal benefit equals the marginal external benefit 
A) 8;marginal benefit equals marginal cost 
B) 8;marginal cost is less than marginal social benefit 
C) 10;marginal cost equals marginal social benefit 
D) 10;marginal social benefit exceeds marginal benefit 
E) 8;marginal benefit equals the marginal external benefit

Question 4

If the marginal social cost of a good is $70 and the marginal external cost is $20,what does the marginal private cost equal?

Accepted Answer

The marginal social cost equals the marg

Question 5

-The figure above shows the market for college education in the United States.If there is no external benefit from a college education and the government does not intervene in the market,then the equilibrium tuition of college education is

Accepted Answer

A) $13,000. 
B) $16,000. 
C) $20,000. 
D) $7,000. 
E) None of the above answers is correct. 
A) $13,000. 
B) $16,000. 
C) $20,000. 
D) $7,000. 
E) None of the above answers is correct.

Question 6

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the market is competitive and unregulated,the equilibrium price is ________ per kilowatt hour and the equilibrium quantity is ________ billion kilowatt hours per day.

Accepted Answer

A) 10¢;200 
B) 15¢;150 
C) 20¢;200 
D) 20¢;100 
E) 7.5¢;150 
A) 10¢;200 
B) 15¢;150 
C) 20¢;200 
D) 20¢;100 
E) 7.5¢;150

Question 7

-The figure shows the market for college education.In order for the efficient amount of education to occur,the government could provide a voucher of ________ per student.

Accepted Answer

A) $4,000 
B) $8,000 
C) $12,000 
D) $20,000 
E) $16,000 
A) $4,000 
B) $8,000 
C) $12,000 
D) $20,000 
E) $16,000

Question 8

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.If 5 concerts are put on,then the

Accepted Answer

A) marginal external cost will be greater than the marginal social cost. 
B) marginal external cost will be greater than the marginal private cost. 
C) marginal external cost will equal the marginal private cost. 
D) marginal social cost will equal the marginal external cost. 
E) marginal external cost will equal zero. 
A) marginal external cost will be greater than the marginal social cost. 
B) marginal external cost will be greater than the marginal private cost. 
C) marginal external cost will equal the marginal private cost. 
D) marginal social cost will equal the marginal external cost. 
E) marginal external cost will equal zero.

Question 9

Based on the figure above,if the factory owned the river then at the equilibrium,marginal social cost would ________ marginal benefit,and the quantity of chemical produced would be ________.

Accepted Answer

A) exceed;above the efficient quantity 
B) exceed;below the efficient quantity 
C) be below;above the efficient quantity 
D) be below;below the efficient quantity 
E) equal;efficient 
A) exceed;above the efficient quantity 
B) exceed;below the efficient quantity 
C) be below;above the efficient quantity 
D) be below;below the efficient quantity 
E) equal;efficient

Question 10

The marginal social cost of producing a good or service is the

Accepted Answer

A) cost of producing an additional unit borne by the producer. 
B) cost of producing an additional unit borne by people other than the producer. 
C) sum of the marginal private cost and the marginal external cost. 
D) same as marginal external cost. 
E) sum of the marginal private cost and the marginal external cost minus the marginal social benefit. 
A) cost of producing an additional unit borne by the producer. 
B) cost of producing an additional unit borne by people other than the producer. 
C) sum of the marginal private cost and the marginal external cost. 
D) same as marginal external cost. 
E) sum of the marginal private cost and the marginal external cost minus the marginal social benefit.

Question 11

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 100 billion kilowatt hours are produced is

Accepted Answer

A) 0¢ per kilowatt. 
B) 5¢ per kilowatt. 
C) 10¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 20¢ per kilowatt. 
A) 0¢ per kilowatt. 
B) 5¢ per kilowatt. 
C) 10¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 20¢ per kilowatt.

Question 12

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 200 billion kilowatt hours are produced is

Accepted Answer

A) 0¢ per kilowatt. 
B) 10¢ per kilowatt. 
C) 20¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 5¢ per kilowatt. 
A) 0¢ per kilowatt. 
B) 10¢ per kilowatt. 
C) 20¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 5¢ per kilowatt.

Question 13

Using the figure above,suppose education is provided by public colleges.At what level should tuition be set to ensure the efficient number of students?

Accepted Answer

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

Question 14

For a firm,its labor costs are

Accepted Answer

A) a marginal benefit. 
B) a private cost. 
C) an external cost. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct. 
A) a marginal benefit. 
B) a private cost. 
C) an external cost. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct.

Question 15

Externalities

Accepted Answer

A) can be either benefits or costs. 
B) always create extra social costs. 
C) always make society better off. 
D) cannot be expressed in dollar amounts. 
E) are always part of private costs or private benefits. 
A) can be either benefits or costs. 
B) always create extra social costs. 
C) always make society better off. 
D) cannot be expressed in dollar amounts. 
E) are always part of private costs or private benefits.

Question 16

A payment made by the government to private producers of roads and libraries would be an example of

Accepted Answer

A) a subsidy. 
B) a copyright. 
C) a voucher. 
D) public provision. 
E) a Coase payment. 
A) a subsidy. 
B) a copyright. 
C) a voucher. 
D) public provision. 
E) a Coase payment.

Question 17

-The figure above shows the market for the chemical hydrogen sulfide,the production of which creates an external cost.The government imposes the pollution tax shown in the above figure.What quantity is produced after the pollution tax is imposed?

Accepted Answer

A) zero pounds 
B) 80 million pounds 
C) 160 million pounds 
D) more than 160 million pounds 
E) more than 80 million pounds and less than 160 million pounds 
A) zero pounds 
B) 80 million pounds 
C) 160 million pounds 
D) more than 160 million pounds 
E) more than 80 million pounds and less than 160 million pounds

Question 18

When property rights are assigned and transactions costs are low,

Accepted Answer

A) all costs and benefits are taken into account by the transacting parties so the transaction is efficient. 
B) externalities will result in market failure. 
C) the marginal social benefit curve shifts leftward and the marginal social cost curve does not shift. 
D) the marginal social cost curve shifts rightward and the marginal social benefit curve does not shift. 
E) the marginal social cost curve shifts rightward and the marginal social benefit curve also shifts rightward. 
A) all costs and benefits are taken into account by the transacting parties so the transaction is efficient. 
B) externalities will result in market failure. 
C) the marginal social benefit curve shifts leftward and the marginal social cost curve does not shift. 
D) the marginal social cost curve shifts rightward and the marginal social benefit curve does not shift. 
E) the marginal social cost curve shifts rightward and the marginal social benefit curve also shifts rightward.

Question 19

Some policymakers have proposed giving parents of children in poorly performing schools tax dollars to help send their children to private schools.This proposal is an example of

Accepted Answer

A) vouchers. 
B) public provision. 
C) external costs. 
D) taxes. 
E) correcting an externality using a government good. 
A) vouchers. 
B) public provision. 
C) external costs. 
D) taxes. 
E) correcting an externality using a government good.

Question 20

A firm dumps dioxin in a river,thereby severely polluting the river.The cost of the water pollution is
I.zero for the firm.
Ii.an external cost.
Iii.part of the marginal social cost.

Accepted Answer

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

A competitive,unregulated market would

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The difference between the marginal cost curve and the marginal social cost curve equals

-The figure above shows the market for a good with an external benefit.The efficient level of production is units because .

If the marginal social cost of a good is $70 and the marginal external cost is $20,what does the marginal private cost equal?

-The figure above shows the market for college education in the United States.If there is no external benefit from a college education and the government does not intervene in the market,then the equilibrium tuition of college education is

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the market is competitive and unregulated,the equilibrium price is per kilowatt hour and the equilibrium quantity is billion kilowatt hours per day.

-The figure shows the market for college education.In order for the efficient amount of education to occur,the government could provide a voucher of ________ per student.

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.If 5 concerts are put on,then the

Based on the figure above,if the factory owned the river then at the equilibrium,marginal social cost would marginal benefit,and the quantity of chemical produced would be .

The marginal social cost of producing a good or service is the

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 100 billion kilowatt hours are produced is

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 200 billion kilowatt hours are produced is

Using the figure above,suppose education is provided by public colleges.At what level should tuition be set to ensure the efficient number of students?

For a firm,its labor costs are

Externalities

A payment made by the government to private producers of roads and libraries would be an example of

-The figure above shows the market for the chemical hydrogen sulfide,the production of which creates an external cost.The government imposes the pollution tax shown in the above figure.What quantity is produced after the pollution tax is imposed?

When property rights are assigned and transactions costs are low,

Some policymakers have proposed giving parents of children in poorly performing schools tax dollars to help send their children to private schools.This proposal is an example of

A firm dumps dioxin in a river,thereby severely polluting the river.The cost of the water pollution is I.zero for the firm. Ii.an external cost. Iii.part of the marginal social cost.

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

A competitive,unregulated market would

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The difference between the marginal cost curve and the marginal social cost curve equals

-The figure above shows the market for a good with an external benefit.The efficient level of production is ________ units because ________.

If the marginal social cost of a good is $70 and the marginal external cost is $20,what does the marginal private cost equal?

-The figure above shows the market for college education in the United States.If there is no external benefit from a college education and the government does not intervene in the market,then the equilibrium tuition of college education is

-The figure shows the market for college education.In order for the efficient amount of education to occur,the government could provide a voucher of ________ per student.

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.If 5 concerts are put on,then the

Based on the figure above,if the factory owned the river then at the equilibrium,marginal social cost would ________ marginal benefit,and the quantity of chemical produced would be ________.

The marginal social cost of producing a good or service is the

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 100 billion kilowatt hours are produced is

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 200 billion kilowatt hours are produced is

Using the figure above,suppose education is provided by public colleges.At what level should tuition be set to ensure the efficient number of students?

For a firm,its labor costs are

Externalities

A payment made by the government to private producers of roads and libraries would be an example of

-The figure above shows the market for the chemical hydrogen sulfide,the production of which creates an external cost.The government imposes the pollution tax shown in the above figure.What quantity is produced after the pollution tax is imposed?

When property rights are assigned and transactions costs are low,

Some policymakers have proposed giving parents of children in poorly performing schools tax dollars to help send their children to private schools.This proposal is an example of

A firm dumps dioxin in a river,thereby severely polluting the river.The cost of the water pollution is I.zero for the firm. Ii.an external cost. Iii.part of the marginal social cost.

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 a good with an external benefit.The efficient level of production is units because .

Based on the figure above,if the factory owned the river then at the equilibrium,marginal social cost would marginal benefit,and the quantity of chemical produced would be .