A) tax the profits of polluting firms. B) are designed to reduce external costs. C) are essentially the same as emissions standards. D) are tradable emissions permits. A) tax the profits of polluting firms. B) are designed to reduce external costs. C) are essentially the same as emissions standards. D) are tradable emissions permits.

Exam 16: Externalities

Figure: City with Two Polluters (Figure: City with Two Polluters) Look at the figure City with Two Polluters.If the government does not intervene in the pollution market, equilibrium will occur where firm A produces ________ tons of pollution and firm B produces tons of Pollution for a total of tons of pollution.

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(Multiple Choice)

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Question 1

Correct Answer:

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Economists say that when an activity provides a positive externality to the community, the market does not produce enough of that activity.Why?

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(Essay)

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Question 2

Correct Answer:

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Consumption of a good provides benefit to the individuals who are actually consuming the good.This benefit received by the consumers is measured by the market price paid for the good and is represented by the market demand curve.But if consuming that good provides additional benefit to people who are not paying the market price to consume it, we say that there is an external benefit above and beyond the market price.This marginal social benefit lies above the market demand curve, and since the market does not account for this external benefit, the market does not produce enough of that good.In other words, the market does not produce enough of a good that provides a positive externality.

Automobile emissions generate pollution and cause higher costs and discomfort to residents of a city.In this case:

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(Multiple Choice)

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Question 3

Correct Answer:

Verified

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.If the government imposed an environmental standard that did not allow the quantity of pollution to exceed 30 tons, there would be:

(Multiple Choice)

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Question 4

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.If this market produced tons of Pollution, then _.

(Multiple Choice)

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Question 5

Pigouvian taxes:

(Multiple Choice)

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Question 6

Figure: Negative Externalities and Raising Pigs for Pork (Figure: Negative Externalities and Raising Pigs for Pork) Refer to the figure Negative Externalities and Raising Pigs for Pork.If the marginal external cost of raising a pig for pork is $400, then the socially optimal quantity of pigs to raise is and The socially optimal price is _.

(Multiple Choice)

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Question 7

When the government attempts to reduce the noise from airplanes by restricting the noise level from a jet engine to less than 50 decibels, it is using a(n):

(Multiple Choice)

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Question 8

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.The socially optimal quantity of pollution is:

(Multiple Choice)

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Question 9

If the marginal benefit received from pollution is less than its marginal cost, then:

(Multiple Choice)

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Question 10

The marginal social benefit of pollution is always zero.True

(True/False)

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Question 11

The marginal benefit from pollution ________ as the quantity of pollution emissions _.

(Multiple Choice)

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Question 12

An emissions tax will:

(Multiple Choice)

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Question 13

When tradable emissions permits are used, if the demand for goods that produce emissions shifts to the right, the equilibrium price of permits ________, and the equilibrium quantity _.

(Multiple Choice)

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Question 14

Network externalities are often:

(Multiple Choice)

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Question 15

According to the Coase theorem, a market will when negative externalities are present.

(Multiple Choice)

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Question 16

If externalities are fully internalized, an outcome is efficient even without government intervention.False

(True/False)

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Question 17

All of the following are examples of an external cost except:

(Multiple Choice)

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Question 18

If at the current amount of pollution, the marginal social benefit of pollution is greater than its marginal social cost, then:

(Multiple Choice)

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Question 19

If a good produces a positive externality and the government does not correct it, the equilibrium market quantity is ________ than the socially optimal quantity and the equilibrium market price is than the socially optimal price.

(Multiple Choice)

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Question 20

Showing 1 - 20 of 234

Economists say that when an activity provides a positive externality to the community, the market does not produce enough of that activity.Why?

Automobile emissions generate pollution and cause higher costs and discomfort to residents of a city.In this case:

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.If the government imposed an environmental standard that did not allow the quantity of pollution to exceed 30 tons, there would be:

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.If this market produced tons of Pollution, then _.

Pigouvian taxes:

When the government attempts to reduce the noise from airplanes by restricting the noise level from a jet engine to less than 50 decibels, it is using a(n):

Figure: Efficiency and Pollution (Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution.The socially optimal quantity of pollution is:

If the marginal benefit received from pollution is less than its marginal cost, then:

The marginal social benefit of pollution is always zero.True

The marginal benefit from pollution ________ as the quantity of pollution emissions _.

An emissions tax will:

When tradable emissions permits are used, if the demand for goods that produce emissions shifts to the right, the equilibrium price of permits ________, and the equilibrium quantity _.

Network externalities are often:

According to the Coase theorem, a market will when negative externalities are present.

If externalities are fully internalized, an outcome is efficient even without government intervention.False

All of the following are examples of an external cost except:

If at the current amount of pollution, the marginal social benefit of pollution is greater than its marginal social cost, then:

If a good produces a positive externality and the government does not correct it, the equilibrium market quantity is ________ than the socially optimal quantity and the equilibrium market price is than the socially optimal price.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

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