Exam 10: Externalities and Property Rights

The following data show the relationship between the number of drivers who leave for work at 8:00 a.m. ,their average commute times,and their marginal benefit associated with the commute times. -Refer to the data above.Assuming that a 260-minute commute results in citizens complaining to the local traffic control authorities,the most cost-beneficial solution to reduce commute time would be to

Private incentives in markets with external benefits lead to _____;private incentives in markets with external costs lead to _____.

The socially optimal number of vaccines is _______.

The three firms below have five choices for pollution control: no controls or four different technologies,W,X,Y and Z.The amount of pollution emitted and the cost of the technologies are shown in the table. -Refer to the information above.Comparing a 25% pollution reduction for all firms to a $1400-per-ton tax,total pollution is __________ and the private cost is__________ for the $1400-per-ton tax.

Assume that large firms can reduce pollution emissions more cheaply than small firms.A fixed-percentage reduction in pollution emissions would therefore

Ben and Sam are competing for the remaining spot on the national swim team.If one of these two swimmers hires a personal trainer,that swimmer will win the spot.If both swimmers hire a personal trainer,they have a 50% chance of winning the place on the team;if neither swimmer hires a personal trainer,they still have a 50% chance of winning the place.The table below shows the payoff matrix facing the swimmers.Whoever makes the team will earn $100,000 next year from product endorsements. -Refer to the information above.If only Sam can afford to hire a personal trainer,then

-Refer to the diagram above.Generally speaking,most remedies for external costs due to pollution in Canada have not been through taxation but regulations requiring firms to use a specific type of pollution-reduction technology.For the regulation to lead to the socially optimal level of output,one must assume that

The two firms listed below have five different technologies for pollution control to choose from: 1,2,3,4 and 5.The amount of pollution emitted and the cost of the technologies are shown in the table.In the absence of government oversight,the firms will pick technology 1 and emit 4 tons each.The government is considering two plans to reduce pollution: a 50% reduction by both firms or selling pollution permits.One permit entitles the owner to emit one ton of pollution.Without a permit,no pollution can be emitted. -Refer to the information above.Suppose that the government decides to sell four permits and an environmental group is determined to only allow three tons of pollution to be emitted.To accomplish its goal,the environmental group should bid __________ for the permit.

Ben and Sam are competing for the remaining spot on the national swim team.If one of these two swimmers hires a personal trainer,that swimmer will win the spot.If both swimmers hire a personal trainer,they have a 50% chance of winning the place on the team;if neither swimmer hires a personal trainer,they still have a 50% chance of winning the place.The table below shows the payoff matrix facing the swimmers.Whoever makes the team will earn $100,000 next year from product endorsements. -Refer to the information above.If only Ben can afford to hire a personal trainer,then

-Refer to the diagram above,which shows the true marginal cost and marginal benefit of air quality.A rightward shift of the marginal cost curve of air quality would

Paul owns a home on the top of a hill and enjoys an unobstructed view of a large wooded area.The view was a large factor in his decision to buy the house and Paul values his view at $5000 per month.Sid purchases the undeveloped wooded area with plans to build a retail shopping centre.Sid expects to earn $10,000 a month from the shopping centre,which is $3000 more than his next best alternative. -Refer to the information above.Suppose that Paul rejects the idea of either buying the undeveloped land or paying Sid not to develop the land,and successfully blocks Sid from developing the land by getting the zoning law changed.As a result,

The three firms below have five choices for pollution control: no controls or four different technologies,W,X,Y and Z.The amount of pollution emitted and the cost of the technologies are shown in the table. -Refer to the information above.Suppose that the government requires the three firms to reduce pollution by 25% from the no-control level.Pollution reduction process __________ will be chosen and will result in a total cost of __________.

Which of the following is NOT an example of an activity with an external cost?

Ben and Sam are competing for the remaining spot on the national swim team.If one of these two swimmers hires a personal trainer,that swimmer will win the spot.If both swimmers hire a personal trainer,they have a 50% chance of winning the place on the team;if neither swimmer hires a personal trainer,they still have a 50% chance of winning the place.The table below shows the payoff matrix facing the swimmers.Whoever makes the team will earn $100,000 next year from product endorsements. -Refer to the information above.The dominant strategy for Ben is ______,and the dominant strategy for Sam is _______.

The following data show the relationship between the number of drivers who leave for work at 8:00 a.m. ,their average commute times,and their marginal benefit associated with the commute times. -Refer to the data above.Imposing a toll of $5 if one leaves between 8:00 a.m.and 9:00 a.m.__________ because __________.

-Refer to the diagram above.The vertical distance between the private MC and the social MC represents

If public school education was not free in Canada,we would expect

Which of the following statements about private and common property rights is FALSE?

When there are no externalities,

Glen is considering whether to paint his house and if so,what colour to choose.He settles on three options: leave it "as is",paint it brown,or paint it purple.Glen's neighbours are able to easily see his house.The following table shows the monetary values of utility for Glen and his neighbours under the three possibilities. -Refer to the information above.The ranking of choices from highest to lowest for Glen is