Exam 10: Externalities

Scenario 10-2 The demand curve for restored historic buildings slopes downward and the supply curve for restored historic buildings slopes upward.The production of the 50^th restored historic building entails the following: • a private cost of $800,000; • a private value of $650,000; • a social value of $800,000. -Refer to Scenario 10-2.Is there an external cost associated with the restoration of the 50^th historic building,or is there an external benefit? What is the amount of that external cost or external benefit?

Reaching an efficient bargain is difficult when the

Figure 10-11 -Refer to Figure 10-11."The social value of the last unit produced exceeds the private cost of the last unit produced by $9." This statement is correct at which quantity of output?

Figure 10-5 -Refer to Figure 10-5.Which price and quantity combination represents the social optimum?

Which of the following illustrates the concept of a negative externality?

Figure 10-12 -Refer to Figure 10-12.Which of the following is an appropriate label for Line 1?

Which of the following statements is not correct?

Which of the following is NOT a way of internalizing technology spillovers?

Although regulation and corrective taxes are both capable of reducing pollution,regulation accomplishes this goal more efficiently.

Figure 10-19 -Refer to Figure 10-19.The socially optimal quantity of output is

Figure 10-9 -Refer to Figure 10-9.Which graph represents a market with a negative externality?

Suppose that flu shots create a positive externality equal to $12 per shot.Further suppose that the government offers a $5 per-shot subsidy to producers.What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?

If the production of computer chips yields greater technology spillovers than the production of potato chips,the government should

If the government wanted to ensure that the market reaches the socially optimal equilibrium in the presence of a technology spillover,it should

Which of the following is an advantage of tradable pollution permits?

Why are Pigovian taxes preferred to regulatory policies as methods to remedy negative externalities?

Markets are often inefficient when negative externalities are present because

Externalities can be corrected by each of the following except

Which of the following is not an effective method to reduce negative externalities?

Technology spillover occurs when