Exam 17: Externalities and the Environment

All of the following are sources of negative externalities except one.Whichis the exception?

)Renewable resources are those for which

All of the following are examples of negative externalities except one.Which is the exception?

Which of the following is an example of an open­access resource?

When an activity results in the imposition of external costs, markets willproduce more than the socially optimal level of that activity.

Unpriced by­products of production or consumption that impose costs onother consumers or firms are known as

When consumption of a good or service produces benefits or costs that arenot reflected in the market price for the good, this is known as a(n)

Fish are

To solve the common pool problem in fishing, governments can __________,or __________.

Smokers and loud talkers who ignore the external effects of their actionsare being rational in the economic sense.

Government restrictions on the use of an open­access resource

Pollution and other negative externalities arise because

The common pool problem

Which of the following can be a renewable resource?

Suppose that the city builds a new park that is advertised as being "open tothe public," and within two months the grass in the park is ruined byoveruse.This would be an example of

Pollution arises because

An individual who drives a car without a muffler in an attempt to increasefuel economy is creating

Private property rights are easily assigned to open­access resources.

Marginal external cost equals marginal private cost minus marginal socialcost.

The equilibrium price and quantity in a free market usually reflect privatemarginal costs and benefits, not social ones.