Question 1

Does government funding for medical innovations have significant social value? Why or why not?

Accepted Answer

Yes, governme nt funding for medical inn

Question 2

Suppose each firm in an industry is allocated 120 emission permits by the government. Each permit enables the firms to emit 120 tons of pollution. The diagram below shows the cost of pollution abatement curve for a firm in this industry.
   How many permits is this firm likely to buy and why?

Accepted Answer

The firm will continue to reduce polluti

Question 3

In which of the following cases will the marginal social cost exceed the marginal private cost?

Accepted Answer

A)  Smoking in a public place 
B)  Reading a book in a library 
C)  Listening to music on an iPod 
D)  Playing basketball in the gym 
A)  Smoking in a public place 
B)  Reading a book in a library 
C)  Listening to music on an iPod 
D)  Playing basketball in the gym

Question 4

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc.
  
-Refer to the figure above. Which of the following will happen if the government allocates 200 pollution permits to each company and the price of each permit is $300?

Accepted Answer

A)  Alpha Electric will want to sell 100 permits to Beta Inc. 
B)  Alpha Electric will want to sell all the permits to Beta Inc. 
C)  Alpha Electric will want to buy all the permits from Beta Inc. 
D)  Alpha Electric will want to buy 100 permits from Beta Inc. 
A)  Alpha Electric will want to sell 100 permits to Beta Inc. 
B)  Alpha Electric will want to sell all the permits to Beta Inc. 
C)  Alpha Electric will want to buy all the permits from Beta Inc. 
D)  Alpha Electric will want to buy 100 permits from Beta Inc.

Question 5

The production of a good generates a foul-smelling gas which is released into air by factories producing the good.
-Refer to the scenario above. Which of the following will help in internalizing the cost to society from pollution?

Accepted Answer

A)  A Pigouvian tax 
B)  A Pigouvian subsidy 
C)  A price ceiling 
D)  A price floor 
A)  A Pigouvian tax 
B)  A Pigouvian subsidy 
C)  A price ceiling 
D)  A price floor

Question 6

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y.
  
-Refer to the figure above. The marginal cost of reducing 20 tons of emission for Company X is ________.

Accepted Answer

A)  $1,000 
B)  $2,000 
C)  $2,500 
D)  $3,000 
A)  $1,000 
B)  $2,000 
C)  $2,500 
D)  $3,000

Question 7

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc.
  
-Refer to the figure above. Suppose the government allocates 250 pollution permits to each company and the price of each permit is $200. ________will earn ________by selling permits.

Accepted Answer

A)  Alpha Electric; $1,000 
B)  Alpha Electric; $10,000 
C)  Alpha Electric; $1,000. 
D)  Alpha Electric; $15,000 
A)  Alpha Electric; $1,000 
B)  Alpha Electric; $10,000 
C)  Alpha Electric; $1,000. 
D)  Alpha Electric; $15,000

Question 8

A tax used to internalize the social cost of pollution is called a(n) ________tax.

Accepted Answer

A)  value-added 
B)  Pigouvian 
C)  excise 
D)  personal 
A)  value-added 
B)  Pigouvian 
C)  excise 
D)  personal

Question 9

According to hedonic analysis, a person's willingness to pay for a house is most likely to depend on:

Accepted Answer

A)  the number of rooms in the house. 
B)  the rate of interest for bank loans. 
C)  the inflation level in the economy. 
D)  the elasticity of supply of houses. 
A)  the number of rooms in the house. 
B)  the rate of interest for bank loans. 
C)  the inflation level in the economy. 
D)  the elasticity of supply of houses.

Question 10

Three students share an apartment. They are planning to buy a common television set and have decided to choose one among three different models through voting. Model A is the most expensive, Model B is neither too expensive nor too cheap, and Model C is the least expensive. The table below shows their respective preferences for each model.
   
-________analysis refers to the study of the prices of goods, services or jobs in terms of the prices of the characteristics that they embed.

Accepted Answer

A)  Hedonic 
B)  Cost-benefit 
C)  Cardinal 
D)  Ordinal 
A)  Hedonic 
B)  Cost-benefit 
C)  Cardinal 
D)  Ordinal

Question 11

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc.
  
-Refer to the figure above. The marginal cost of reducing emission by 100 tons for Alpha Electric is ________.

Accepted Answer

A)  $100 
B)  $200 
C)  $350 
D)  $400 
A)  $100 
B)  $200 
C)  $350 
D)  $400

Question 12

What were the findings of the study conducted by economists Amy Finkelstein and Robin McKnight on Medicare?

Accepted Answer

Economists Amy Finkelstein and Robin McK

Question 13

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit.
  
-Refer to the scenario above. In order to ensure that the manufacturing unit produces the socially optimal level of output, the government should________.

Accepted Answer

A)  impose a per unit tax of $1 
B)  impose a per unit tax of $2 
C)  provide a subsidy of $1 per unit 
D)  provide a subsidy of $2 per unit 
A)  impose a per unit tax of $1 
B)  impose a per unit tax of $2 
C)  provide a subsidy of $1 per unit 
D)  provide a subsidy of $2 per unit

Question 14

The production of a good generates a foul-smelling gas which is released into air by factories producing the good.
-Refer to the scenario above. This implies that the production of the good gives rise to ________.

Accepted Answer

A)  a positive externality 
B)  a negative externality 
C)  economies of scale 
D)  diseconomies of scale 
A)  a positive externality 
B)  a negative externality 
C)  economies of scale 
D)  diseconomies of scale

Question 15

The tool that is used for the analysis of consumers' willingness to pay and companies'willingness to supply the various characteristics embedded in a good is called _______.

Accepted Answer

A)  hedonic analysis 
B)  cardinal analysis 
C)  ordinal analysis 
D)  cost-benefit analysis 
A)  hedonic analysis 
B)  cardinal analysis 
C)  ordinal analysis 
D)  cost-benefit analysis

Question 16

Which of the following is likely to be an impact of an increase in life expectancy in a country when economic growth stagnates?

Accepted Answer

A)  An increase in national income 
B)  A decrease in income inequality 
C)  A decrease in per capita income 
D)  An increase in the cost of medical care 
A)  An increase in national income 
B)  A decrease in income inequality 
C)  A decrease in per capita income 
D)  An increase in the cost of medical care

Question 17

Environmental disaster in Easter Island is an example of _____.

Accepted Answer

A)  diseconomies of scale 
B)  the tragedy of the commons 
C)  the paradox of thrift 
D)  a pecuniary externality 
A)  diseconomies of scale 
B)  the tragedy of the commons 
C)  the paradox of thrift 
D)  a pecuniary externality

Question 18

Briefly explain one potential problem with Pigouvian taxes.

Accepted Answer

One potential problem with taxes is that

Question 19

List two ways in which we can use technology to reduce carbon emissions.

Accepted Answer

First, we can develop technologies and i

Question 20

The workhorse approach in valuing medical innovations is a(n)________ analysis.

Accepted Answer

A)  hedonic 
B)  cardinal 
C)  ordinal 
D)  cost-benefit 
A)  hedonic 
B)  cardinal 
C)  ordinal 
D)  cost-benefit

Does government funding for medical innovations have significant social value? Why or why not?

Suppose each firm in an industry is allocated 120 emission permits by the government. Each permit enables the firms to emit 120 tons of pollution. The diagram below shows the cost of pollution abatement curve for a firm in this industry. How many permits is this firm likely to buy and why?

In which of the following cases will the marginal social cost exceed the marginal private cost?

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. Which of the following will happen if the government allocates 200 pollution permits to each company and the price of each permit is $300?

The production of a good generates a foul-smelling gas which is released into air by factories producing the good. -Refer to the scenario above. Which of the following will help in internalizing the cost to society from pollution?

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y. -Refer to the figure above. The marginal cost of reducing 20 tons of emission for Company X is ________.

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. Suppose the government allocates 250 pollution permits to each company and the price of each permit is $200. will earn by selling permits.

A tax used to internalize the social cost of pollution is called a(n) ________tax.

According to hedonic analysis, a person's willingness to pay for a house is most likely to depend on:

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. The marginal cost of reducing emission by 100 tons for Alpha Electric is ________.

What were the findings of the study conducted by economists Amy Finkelstein and Robin McKnight on Medicare?

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit. -Refer to the scenario above. In order to ensure that the manufacturing unit produces the socially optimal level of output, the government should________.

The production of a good generates a foul-smelling gas which is released into air by factories producing the good. -Refer to the scenario above. This implies that the production of the good gives rise to ________.

The tool that is used for the analysis of consumers' willingness to pay and companies'willingness to supply the various characteristics embedded in a good is called _______.

Which of the following is likely to be an impact of an increase in life expectancy in a country when economic growth stagnates?

Environmental disaster in Easter Island is an example of _____.

Briefly explain one potential problem with Pigouvian taxes.

List two ways in which we can use technology to reduce carbon emissions.

The workhorse approach in valuing medical innovations is a(n)________ analysis.

Economic Methods and Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Consumers and Incentives,the Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Sellers and Incentives,aggregate Incomes

Perfect Competition and the Invisible Hand, Economic Growth

Trade and Why Isnt the Whole World Developed

Externalities and Public Goods, Employment and Unemployment

The Government in the Economy: Taxation and Regulation, Credit Markets

Markets for Factors of Production and the Monetary System

Monopoly and Short-Run Fluctuations

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk and Open Economy Macroeconomics

Social Economics and Auctions and Bargaining

Web: Financial Decision Making

Web: Political Economy

Filters

Exam 16: Web: Economics of Life, Health, and the Environment

Does government funding for medical innovations have significant social value? Why or why not?

Suppose each firm in an industry is allocated 120 emission permits by the government. Each permit enables the firms to emit 120 tons of pollution. The diagram below shows the cost of pollution abatement curve for a firm in this industry. How many permits is this firm likely to buy and why?

In which of the following cases will the marginal social cost exceed the marginal private cost?

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. Which of the following will happen if the government allocates 200 pollution permits to each company and the price of each permit is $300?

The production of a good generates a foul-smelling gas which is released into air by factories producing the good. -Refer to the scenario above. Which of the following will help in internalizing the cost to society from pollution?

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y. -Refer to the figure above. The marginal cost of reducing 20 tons of emission for Company X is ________.

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. Suppose the government allocates 250 pollution permits to each company and the price of each permit is $200. ________will earn ________by selling permits.

A tax used to internalize the social cost of pollution is called a(n) ________tax.

According to hedonic analysis, a person's willingness to pay for a house is most likely to depend on:

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. The marginal cost of reducing emission by 100 tons for Alpha Electric is ________.

What were the findings of the study conducted by economists Amy Finkelstein and Robin McKnight on Medicare?

The diagram below shows the demand curve, supply curve, and the marginal social cost curve for a manufacturing unit. -Refer to the scenario above. In order to ensure that the manufacturing unit produces the socially optimal level of output, the government should________.

The production of a good generates a foul-smelling gas which is released into air by factories producing the good. -Refer to the scenario above. This implies that the production of the good gives rise to ________.

The tool that is used for the analysis of consumers' willingness to pay and companies'willingness to supply the various characteristics embedded in a good is called _______.

Which of the following is likely to be an impact of an increase in life expectancy in a country when economic growth stagnates?

Environmental disaster in Easter Island is an example of _____.

Briefly explain one potential problem with Pigouvian taxes.

List two ways in which we can use technology to reduce carbon emissions.

The workhorse approach in valuing medical innovations is a(n)________ analysis.

Economic Methods and Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Consumers and Incentives,the Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Sellers and Incentives,aggregate Incomes

Perfect Competition and the Invisible Hand, Economic Growth

Trade and Why Isnt the Whole World Developed

Externalities and Public Goods, Employment and Unemployment

The Government in the Economy: Taxation and Regulation, Credit Markets

Markets for Factors of Production and the Monetary System

Monopoly and Short-Run Fluctuations

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk and Open Economy Macroeconomics

Social Economics and Auctions and Bargaining

Web: Financial Decision Making

Web: Political Economy

Filters

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc. -Refer to the figure above. Suppose the government allocates 250 pollution permits to each company and the price of each permit is $200. will earn by selling permits.