Exam 16: Externalities

Consider a competitive market with a MPB = 22 - q and a MPC = 10 +q.There is a negative production externality of e = q, where q is the level of output in the market.Which statement is true?

Consider a competitive market in which the MPB = 180 - 2q and the MSC = q.In this market, however, there is a positive consumption externality of $60 per unit consumed.What is the efficient level of output in this market?

A negative production externality results in:

The Coase theorem states that:

Consider a competitive market in which the MPB = 180 - 2q and the MSC = q.In this market, however, there is a positive consumption externality of $60 per unit consumed.What government intervention will result in the efficient outcome?

Consider a competitive market with a MPB = 22 - q and a MPC = 10 +q.There is a negative production externality of e = q, where q is the level of output in the market.Which statement is true?

The government issues tradable permits to tackle with the issue of sulphur dioxide emissions.Which statement is true?

Consider a competitive market in which the MPB = 180 - 2q and the MSC = q.In this market, however, there is a positive consumption externality of $60 per unit consumed.What is the DWL that results in the market equilibrium?

Consider a competitive market with a MPB = 22 - q and a MPC = 10 +q.There is a negative production externality of e = q, where q is the level of output in the market, the government can achieve the efficient level of output by:

A positive consumption externality results in: