Exam 8: Externalities, the Environment, and Public Goods

Most economists suggest that pollution, a negative externality, be reduced to what level? Explain your answer.

Timber on property not owned by any individual is an example of a _____ good.

A _____ tax is an example of a corrective tax.

One person's consumption of _____ good diminishes the ability of others to consume the same good.

Over-the-air television service is generally a _____ good.

When municipalities enact noise restrictions that prevent aircraft from flying between 11 p.m. and 6

An example of a firm's marginal private cost is:

_____ may be applied to activities that generate a positive externality or a smaller negative externality on a comparable activity to encourage businesses to consider of the externality in decision making.

A government program where permits are issued for a maximum allowable amount of pollution and those permits can be bought and sold is called:

_____ energy subsidies help make electricity generated by wind and solar competitive with electricity generated by fossil fuels.

A situation in which free, unregulated markets do not maximize economic efficiency is called:

_____ suggests that private individuals are able to negotiate an efficient solution to the problem of external costs or benefits in the presence of clearly defined property rights and low transaction costs.

_____ is the tendency of society to overuse common resources.

Explain why the cost of limiting greenhouse gases is high.

Which of the following is an example of a common resource good?

(Figure: Common Resource Goods) This figure illustrates an _____ of a common resource.

_____ goods are rival in consumption and excludable.

When too much of a common resource good is consumed, the marginal social cost of the good is greater than the marginal:

_____ are a form of property rights.

Generally, firms that practice environmental sustainability initiatives: