Exam 31: Market Failure: Externalities, Public Goods, and Asymmetric Information

Exhibit 31-4 -Refer to Exhibit 31-4.If a negative externality exists,then curve __________ represents the marginal social cost curve and the area __________ represents the market failure.

When a positive externality exists,

If Jamal successfully and completely internalizes a negative externality,it follows that

A __________ good is one that once produced and provided to one person,provides benefits to other persons.

Which of the following statements is false?

If an asymmetry of information is removed and laborers' preferences change against employment in a labor market,it would __________ employment and __________ the wage at the equilibrium in the market.

Which of the following is not a method to internalize or adjust for externalities?

Which of the following is an example of an externality that has been internalized?

Under a tradable pollution permits system (cap and trade),government _____________ the amount of pollution,___________________ what the price to pollute will be.

Which of the following is false?

Exhibit 31-1 -Refer to Exhibit 31-1.If the exhibit represents a negative externality situation,the social cost of expanding output from Q₁ to Q₂ is the area of

Exhibit 31-4 -Refer to Exhibit 31-4. If a negative externality exists,then the external costs associated with the negative externality equal

Which of the following statements is false?

An externality is internalized if

If fewer cigarettes are consumed with symmetric information than asymmetric information,it follows that

The buyer of a good has less information than the seller of the good.This is a case of

Sometimes,when goods are produced and consumed,side effects are felt by people who are not directly involved in the market exchanges.In general,these side effects are called

Which of the following statements is consistent with the Coase theorem?

Which of the following statements is not an example of the use of persuasion to correct (or adjust for)an externality?

If a negative externality exists,then there is a __________ when society produces the market output instead of the socially optimal output.This exists because the __________ to sellers and third parties are __________ the __________ derived by buyers.