Exam 10: Externalities

Figure 10-13.On the graph,Q represents the quantity of plastics and P represents the price of plastics. -Refer to Figure 10-13.Each unit of plastics that is produced results in an external

The Coase theorem suggests that private solutions to an externality problem

Figure 10-9 -Refer to Figure 10-9,Panel (b)and Panel (c).The overuse of antibiotics leads to the development of antibiotic-resistant diseases.Therefore,the external cost of antibiotic overuse is represented by

Dick owns a dog whose barking annoys Dick's neighbor Jane.Suppose that the benefit of owning the dog is worth $700 to Dick and that Jane bears a cost of $500 from the barking.Assuming Dick has the legal right to keep the dog,a possible private solution to this problem is that

Figure 10-11 -Refer to Figure 10-11.Which of the following magnitudes is constant over all units of output?

Figure 10-8 -Refer to Figure 10-8.If the government wanted to subsidize this market to achieve the socially-optimal level of output,how large would the subsidy need to be?

If a sawmill creates too much noise for local residents,

When the government uses a command-and-control policy to solve an externality,it

Altering incentives so that people take account of the external effects of their actions

The Coase theorem states that

Figure 10-12 -Refer to Figure 10-12.Which of the following is an appropriate label for Line 2?

Figure 10-3 -Refer to Figure 10-3.The difference between the social cost curve and the supply curve reflects the

Which of the following is an example of a positive externality?

Which of the following statements is correct?

According to the Coase theorem,if private parties can bargain without cost,then the private market will solve the problem of externalities.

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

The Coase theorem suggests that private markets may not be able to solve the problem of externalities

Figure 10-7 -Refer to Figure 10-7.To internalize the externality in this market,the government should

Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by the student in the form of higher wages.If the government offers subsidies for MBAs,then which of the following statements is correct?

At any given quantity,the willingness to pay in the market for gasoline is reflected in the