Exam 18: Externalities and Public Goods

To enforce the optimum level of emissions, a government could set an emissions fee, which would be:

Which is NOT a weakness of the policy of mandatory separation of recyclables?

If households pay a fixed annual fee for trash disposal,

Figure 18.1.2 -Refer to Figure 18.1.2. The efficient level of output is:

Which of the following factors influence the appropriate value for the social rate of discount used in NPV analysis of stock externalities?

Smog Corporation and Grimy Corporation emit pollution in their production processes. The local government has established a standard for the pollution levels of Smog Corporation and Grimy Corporation of 25,000 units of pollution. To ensure this level of pollution, the government has allocated 15,000 pollution permits to Smog Corporation and 10,000 pollution permits to Grimy Corporation. Smog Corporation has the following demand function for pollution emission permits: Grimy Corporation's demand function for pollution emission permits is: Is the government's allocation of pollution permits efficient? If the government allowed the corporations to trade permits, would the firms be motivated to trade? If so, what would be the efficient level of trading?

The efficient level of recycling equates the:

Externalities:

Which of the following move the handling of a common property resource closest to efficiency?

Figure 18.1.1 -Refer to Figure 18.1.1. Which of the following statements is correct?

A consumer or producer who does not pay for use of a nonexclusive good but expects others to pay is known as a:

Scenario 18.1: It is the factory's choice whether to install a filter. It is the choice of the nearby fishermen whether to install a treatment plant. Dollar figures show profit. The factory and the fishermen can negotiate costlessly, and no one else is affected by the result. Factory Fishermen A: No filter or treatment plant $10,000 $2,000 B: Filter; no treatment plant $6,000 $10,000 C: No filter; treatment plant $10,000 $4,000 D: Filter; treatment plant $6,000 $6,000 -Refer to Scenario 18.1. If the fishermen are given the right to clean water,

Figure 18.2.2 -Refer to Figure 18.2.2 above. Which of the following areas represents the total abatement cost?

The marginal benefit and marginal private cost curves for aphrodisiacs are given as follows: MB = 200 - Q MPC = Q In addition to private costs, there is a marginal external cost of $10 per unit of output. What is the efficient level of output?

The marginal social cost and private cost curves for a particular common property resource are upward sloping. What happens to the gap between the actual quantity and the socially optimal quantity as the demand for the resource becomes more inelastic?

If X transferable emissions permits are issued and there are n potential polluters,

The city of Econoville has 100 residents who each have the identical demand function for lake area: The marginal cost of maintaining lake area is Lake area is a public good. That is, if the city of Econoville provides public access lake area, all of the residents can enjoy the area. If the city of Econoville does not offer public lake area, how much area of lakes will each individual resident maintain on their own? What is the optimal area of public lakes in Econoville? What flat lake tax should Econoville implement on residents for units of lake area the city provides? With this flat tax, what is the total contribution of each resident for the lake?

Figure 18.1.1 -Refer to Figure 18.1.1. The competitive level of output in the industry is:

Figure 18.2.1 -Refer to Figure 18.2.1 above. In which of the following instances is the cost of reducing emissions less the harm done from emissions?

Figure 18.2.4 -Refer to Figure 18.2.4 above. The amount of recycling of scrap that arises in a private market is: