Question 1

For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced,what must be done?

Accepted Answer

A) The size of marginal external benefit must be accurately determined. 
B) The government must produce the product. 
C) Private production and private consumption must both be directly subsidized. 
D) The quantity demanded must be decreased to the efficient amount. 
E) Private production without the subsidy must be prohibited. 
A) The size of marginal external benefit must be accurately determined. 
B) The government must produce the product. 
C) Private production and private consumption must both be directly subsidized. 
D) The quantity demanded must be decreased to the efficient amount. 
E) Private production without the subsidy must be prohibited.

Question 2

"The marginal social cost of burning garbage in Houston is the sum of the marginal private cost and the marginal external cost." Is this assertion correct or incorrect?

Accepted Answer

The statement is correct.The m

Question 3

Private subsidies granted to producers affect

Accepted Answer

A) the supply side of the market by shifting the supply curve. 
B) the demand side of the market by shifting the demand curve. 
C) property rights. 
D) transaction costs. 
E) both the supply side of the market and the demand side because they shift both the supply curve and the demand curve. 
A) the supply side of the market by shifting the supply curve. 
B) the demand side of the market by shifting the demand curve. 
C) property rights. 
D) transaction costs. 
E) both the supply side of the market and the demand side because they shift both the supply curve and the demand curve.

Question 4

Joanne rents a TV production studio to produce an extra hour of a TV show.The rent is

Accepted Answer

A) a private cost and not an external cost. 
B) an external cost and not a private cost. 
C) both a private cost and an external cost. 
D) neither a private cost nor an external cost. 
E) a private benefit because viewers will benefit from watching the extra hour of the show. 
A) a private cost and not an external cost. 
B) an external cost and not a private cost. 
C) both a private cost and an external cost. 
D) neither a private cost nor an external cost. 
E) a private benefit because viewers will benefit from watching the extra hour of the show.

Question 5

Why does government provide educational opportunities in the form of vouchers,private subsidies,and public provision?

Accepted Answer

Education generates external benefits.Wi

Question 6

A tax on a polluting industry

Accepted Answer

A) is not desirable because it reduces efficiency. 
B) leads to less output in this industry. 
C) causes more resources to be used in the polluting industry. 
D) shifts the marginal social benefit curve leftward. 
E) shifts the marginal social benefit curve rightward. 
A) is not desirable because it reduces efficiency. 
B) leads to less output in this industry. 
C) causes more resources to be used in the polluting industry. 
D) shifts the marginal social benefit curve leftward. 
E) shifts the marginal social benefit curve rightward.

Question 7

The marginal cost incurred by the entire society to produce a good or service is the

Accepted Answer

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

Question 8

When Ronald takes another economics class,other people in society benefit.The benefit to these other people is called the marginal ________ benefit of the class.

Accepted Answer

A) social 
B) private 
C) external 
D) Coasian 
E) extra 
A) social 
B) private 
C) external 
D) Coasian 
E) extra

Question 9

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,the deadweight loss is ________ thousand per month.

Accepted Answer

A) $250 
B) $125 
C) $150 
D) $50 
E) zero 
A) $250 
B) $125 
C) $150 
D) $50 
E) zero

Question 10

If the government taxes producers that create pollution,the government's policy

Accepted Answer

A) allows the producers to pollute more by increasing their costs. 
B) results in less production because the producers' costs have risen. 
C) eliminates pollution entirely by shifting the supply curve leftward. 
D) allows the firms to pass along higher costs but doesn't cut pollution. 
E) forbids the firms from passing along higher costs. 
A) allows the producers to pollute more by increasing their costs. 
B) results in less production because the producers' costs have risen. 
C) eliminates pollution entirely by shifting the supply curve leftward. 
D) allows the firms to pass along higher costs but doesn't cut pollution. 
E) forbids the firms from passing along higher costs.

Question 11

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 12

Public provision

Accepted Answer

A) is the production of a good by the government by giving funds to private producers. 
B) lowers the marginal cost of producing the good. 
C) means the good is produced by a public authority that receives the most of its revenue from the government. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct. 
A) is the production of a good by the government by giving funds to private producers. 
B) lowers the marginal cost of producing the good. 
C) means the good is produced by a public authority that receives the most of its revenue from the government. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct.

Question 13

If an external benefit is present,then the

Accepted Answer

A) marginal private benefit curve lies above the marginal private cost curve. 
B) marginal social benefit curve lies above the marginal private benefit curve. 
C) marginal social cost curve lies above the marginal private benefit curve. 
D) marginal social benefit is equal to the marginal social cost. 
E) marginal social benefit curve is the same as the marginal private benefit curve. 
A) marginal private benefit curve lies above the marginal private cost curve. 
B) marginal social benefit curve lies above the marginal private benefit curve. 
C) marginal social cost curve lies above the marginal private benefit curve. 
D) marginal social benefit is equal to the marginal social cost. 
E) marginal social benefit curve is the same as the marginal private benefit curve.

Question 14

If a producer must pay the cost of his or her pollution because property rights have been assigned,then

Accepted Answer

A) pollution will be completely eliminated. 
B) the supply curve will shift rightward as the new costs are added. 
C) the supply curve will shift leftward as the new costs are added. 
D) consumers will now consume more of the good because the external costs are reduced. 
E) there is no longer any marginal benefit from the good or service being produced. 
A) pollution will be completely eliminated. 
B) the supply curve will shift rightward as the new costs are added. 
C) the supply curve will shift leftward as the new costs are added. 
D) consumers will now consume more of the good because the external costs are reduced. 
E) there is no longer any marginal benefit from the good or service being produced.

Question 15

If there is no external cost,then marginal social cost

Accepted Answer

A) increases as output increases. 
B) decreases as output increases. 
C) is constant regardless of the level of output. 
D) is unrelated to output levels. 
E) first increases and then decreases as output increases. 
A) increases as output increases. 
B) decreases as output increases. 
C) is constant regardless of the level of output. 
D) is unrelated to output levels. 
E) first increases and then decreases as output increases.

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 government imposes a pollution tax to achieve the efficient level of production,the tax equals ________ per kilowatt hour.

Accepted Answer

A) 0¢ 
B) 7.5¢ 
C) 10¢ 
D) 15¢ 
E) 2.5¢ 
A) 0¢ 
B) 7.5¢ 
C) 10¢ 
D) 15¢ 
E) 2.5¢

Question 17

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

Accepted Answer

External benefits to education include t

Question 18

In the figure above,suppose the government provides vouchers worth $15,000 per student per year.When the market is in equilibrium,marginal social benefit ________ marginal cost,and the number of students enrolled 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 19

When production of a good results in an external cost,the unregulated competitive market equilibrium quantity is

Accepted Answer

A) the efficient level of output. 
B) greater than the efficient level of output. 
C) not zero but is less than the efficient level of output. 
D) unattainable. 
E) zero. 
A) the efficient level of output. 
B) greater than the efficient level of output. 
C) not zero but is less than the efficient level of output. 
D) unattainable. 
E) zero.

Question 20

Explain the difference between marginal social benefit and marginal external benefit.

Accepted Answer

Marginal social benefit equals the margi

For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced,what must be done?

"The marginal social cost of burning garbage in Houston is the sum of the marginal private cost and the marginal external cost." Is this assertion correct or incorrect?

Private subsidies granted to producers affect

Joanne rents a TV production studio to produce an extra hour of a TV show.The rent is

Why does government provide educational opportunities in the form of vouchers,private subsidies,and public provision?

A tax on a polluting industry

The marginal cost incurred by the entire society to produce a good or service is the

When Ronald takes another economics class,other people in society benefit.The benefit to these other people is called the marginal ________ benefit of the class.

If the government taxes producers that create pollution,the government's policy

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.

Public provision

If an external benefit is present,then the

If a producer must pay the cost of his or her pollution because property rights have been assigned,then

If there is no external cost,then marginal social cost

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the government imposes a pollution tax to achieve the efficient level of production,the tax equals ________ per kilowatt hour.

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

In the figure above,suppose the government provides vouchers worth $15,000 per student per year.When the market is in equilibrium,marginal social benefit marginal cost,and the number of students enrolled is .

When production of a good results in an external cost,the unregulated competitive market equilibrium quantity is

Explain the difference between marginal social benefit and marginal external benefit.

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

For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced,what must be done?

"The marginal social cost of burning garbage in Houston is the sum of the marginal private cost and the marginal external cost." Is this assertion correct or incorrect?

Private subsidies granted to producers affect

Joanne rents a TV production studio to produce an extra hour of a TV show.The rent is

Why does government provide educational opportunities in the form of vouchers,private subsidies,and public provision?

A tax on a polluting industry

The marginal cost incurred by the entire society to produce a good or service is the

When Ronald takes another economics class,other people in society benefit.The benefit to these other people is called the marginal ________ benefit of the class.

If the government taxes producers that create pollution,the government's policy

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.

Public provision

If an external benefit is present,then the

If a producer must pay the cost of his or her pollution because property rights have been assigned,then

If there is no external cost,then marginal social cost

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the government imposes a pollution tax to achieve the efficient level of production,the tax equals ________ per kilowatt hour.

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

In the figure above,suppose the government provides vouchers worth $15,000 per student per year.When the market is in equilibrium,marginal social benefit ________ marginal cost,and the number of students enrolled is ________.

When production of a good results in an external cost,the unregulated competitive market equilibrium quantity is

Explain the difference between marginal social benefit and marginal external benefit.

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

In the figure above,suppose the government provides vouchers worth $15,000 per student per year.When the market is in equilibrium,marginal social benefit marginal cost,and the number of students enrolled is .