Exam 30: Market Failure Externalities Public Goods and Asymmetric Information

Suppose the production of a good results in positive externalities. If output occurs at the intersection of the marginal social benefits curve and the supply curve, then

In the case of a negative externality, the entire marginal social cost curve lies

There is no market failure if

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

A negative externality can be internalized by

Exhibit 30-3 -Refer to Exhibit 30-3. What is the cost to Firm A of eliminating 2 tons of pollution?

Market failure is a situation in which

A negative externality exists and government wants to impose a per-unit tax in order to bring about the socially optimal output. To accomplish its objective, government must set the tax equal to marginal

An insurance company requires homeowners it insures to have smoke detectors in their homes. The insurance company is trying to combat the

Exhibit 30-2 ​ -Refer to Exhibit 30-2. If the exhibit represents a positive externality situation, the net social benefit of expanding output from Q₁ to Q₂ is the area of

Ronald Coase stressed the necessity of using taxes to internalize negative externalities.

Suppose the production of a good results in negative externalities. If output is at the intersection of the demand curve and the marginal social cost curve, then

Which of the following goods is least likely to be rivalrous in consumption?

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

In which of the following situations would a positive externality most likely be involved?

According to the Coase theorem, under certain conditions the market can internalize externalities.

A negative externality is

When a negative externality exists, the market is said to underproduce the good connected with the negative externality.

A nonexcludable public good is

When positive externalities are involved, the market is said to