Exam 10: Externalities and Property Rights

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 imposes a tax of $1400 per ton of pollution.As a result,Axxon picks __________,Immobil picks __________,and Cexaco picks __________.

If all major league baseball pitchers were to learn a new,highly effective pitch called the "slipper," this would

Bob lives in a residential neighbourhood that takes pride on well-groomed lawns.Bob's neighbours find that the marginal benefit of someone else's well-groomed lawn is $10.Bob,however,receives the same net benefit from an unkempt lawn as a well-groomed lawn: zero (an unkempt lawn looks bad but costs nothing;a well groomed lawn looks nice but is costly). -Refer to the information above.If Bob acts independently,he will have a(n)__________ and total economic surplus to the neighbourhood will be __________.

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

-Refer to the diagram above.Private MC represents the

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

Steve and Don are neighbours who work at the same firm and hold the same title.Steve finds that when Don's consumption rises,he feels worse off.Don feels the same way towards Steve's consumption. -Refer to the information above.For both Steve and Don,

Steve and Don are neighbours who work at the same firm and hold the same title.Steve finds that when Don's consumption rises,he feels worse off.Don feels the same way towards Steve's consumption. -Refer to the information above.Suppose that after offering a first hour of overtime,the firm that employs Steve and Don begins to offer a second hour of overtime.One can predict that

Refer to the graph below.Assume that curve II represents marginal private cost and curve IV represents marginal private benefit. If there are no externalities,the competitive equilibrium price will be __________ per unit and the competitive equilibrium quantity will be ________ units.

-Refer to the diagram above.One of the reasons that a per-unit tax will result in the socially efficient level of production is that

There are only two users of a stream,a chemical plant that uses the stream to dump wastes and a fish farm.If the fish farm is granted the right to a pollution-free stream but is free to give up that right in exchange for a payment from the chemical plant,

Investments in a child's education by his parents are

When government officials have very little information about costs and benefits of the production of diesel fuel,a very high tax imposed on producers

Suppose that four land owners,A,B,C,and D,own adjacent lots.Recently,a pool of oil was discovered that is under all four lots but does not extend beyond the four lots.Below is information on the relationship between number of oil wells,output per well and revenue per well. -Refer to the information above.The entire pool of oil is

If all linemen in the NFL took anabolic steroids,the rank ordering of linemen (1st,2nd,3rd,etc)would be unchanged.Then this assumes that

Compared to an across-the-board reduction,taxing pollution emissions has the advantage of

If a corrective tax on gasoline results in the efficient output of gasoline by internalizing the negative externalities associated with pollution,then

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,i.e. ,four tons of total pollution,and starts the bidding with an opening price of $30.The ultimate equilibrium price of permits is __________ with Dewpoint buying __________ and Disunion Carbonated buying __________.

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 $5,000 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 $3,000 more than his next best alternative. -Refer to the information above.Assuming development of the land reduces the value of Paul's view to zero,then

Steve and Don are neighbours who work at the same firm and hold the same title.Steve finds that when Don's consumption rises,he feels worse off.Don feels the same way towards Steve's consumption. -Refer to the information above.Suppose that Don buys a new Lexus and shortly thereafter Steve buys a new Audi.Steve and Don seem to be