Exam 17: Externalities and the Environment

Exhibit 17-1 -In Exhibit 17-1, the amount by which the total social cost of producing the private equilibrium level of output exceeds the total social benefit is

When competitive market equilibrium determines a level of output for which the marginal social cost exceeds the marginal social benefit, the private equilibrium results in

Some pollution occurs because property rights to some resources are well defined.

If farmers decide individually whether or not to vaccinate their cattle against mad cow disease, which of the following is true?

Firms that emit toxins into the air tend to

To solve the common pool problem in fishing, governments can __________, or __________.

Unpriced by-products of production or consumption that impose costs on other consumers or firms are known as

Oil is an example of a renewable resource.

Marginal external cost equals marginal private cost minus marginal social cost.

Exhibit 17-8 -Exhibit 17-8 represents the consumer market for higher education. If people base their education decisions only on the marginal private benefit of education, how many years of education will they get?

When a resource is an open-access resource,

Rainforests are often cut down because

Property rights can be defined and enforced

Exhibit 17-5 -In Exhibit 17-5, if the government does not charge firms for emitting pollutants into a river,

Marginal social cost includes both the marginal private cost and the marginal external cost that production imposes on society

Most of the EPA Superfund expenditures have gone for court costs and legal fees.

What kind of garbage tends to be recycled in the United States?

Unpriced by-products of production or consumption that provide benefits to other consumers or other firms are known as

In order to increase society's well-being, measles vaccinations might be

When a system of pollution rights is in effect, polluters have no economic incentive to reduce the amount of pollution they generate.