Question 1

The Coase theorem deals with the problem of pollution by

Accepted Answer

A) giving the government regulatory power over polluters. 
B) making all polluters stop polluting. 
C) establishing and enforcing private property rights. 
D) having the government take over ownership of all polluting processes. 
E) allowing the government to set the proper emission charge. 
A) giving the government regulatory power over polluters. 
B) making all polluters stop polluting. 
C) establishing and enforcing private property rights. 
D) having the government take over ownership of all polluting processes. 
E) allowing the government to set the proper emission charge. C

Question 2

How has air quality changed in the United States since 1980?

Accepted Answer

Generally air quality in the United States has improved.Most sources of pollution have decreased substantially and even ozone, which has changed the least, has decreased.

Question 3

External benefits are the extra

Accepted Answer

A) benefits a consumer gets from consuming a good. 
B) costs a producer creates in producing a good. 
C) benefits that accrue to people other than the consumers. 
D) costs a producer bears for producing a polluting good. 
E) benefits a producer obtains for reducing production of a polluting good. 
A) benefits a consumer gets from consuming a good. 
B) costs a producer creates in producing a good. 
C) benefits that accrue to people other than the consumers. 
D) costs a producer bears for producing a polluting good. 
E) benefits a producer obtains for reducing production of a polluting good. C

Question 4

-The figure above shows an education market in which the government is providing households with vouchers.In total, how much do the schools receive for a student?

Accepted Answer

A) $4,000 
B) $8,000 
C) $12,000 
D) $16,000 
E) $20,000 
A) $4,000 
B) $8,000 
C) $12,000 
D) $16,000 
E) $20,000

Question 5

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve.If the market is competitive and unregulated, the equilibrium price is ________ per kilowatt hour and the equilibrium quantity is ________ billions of kilowatt hours per day.

Accepted Answer

A) 10¢; 200 
B) 15¢; 150 
C) 20¢; 200 
D) 20¢; 100 
E) 7.5¢; 150 
A) 10¢; 200 
B) 15¢; 150 
C) 20¢; 200 
D) 20¢; 100 
E) 7.5¢; 150

Question 6

-The figure above shows the market for annual influenza immunizations the United States.The efficient quantity of immunizations is

Accepted Answer

A) 14 million per year. 
B) 10 million per year. 
C) Between 14 and 21 million per year. 
D) Less than 10 million per year. 
E) 22 million per year. 
A) 14 million per year. 
B) 10 million per year. 
C) Between 14 and 21 million per year. 
D) Less than 10 million per year. 
E) 22 million per year.

Question 7

-The figure above shows the market for education.Education has an external benefit.
a∙If the market is competitive and left unregulated, how many students will be enrolled per year?
b∙What is the efficient number of students?
c∙In the figure, show the effect of a government subsidy that moves the market to the efficient number of students.What is the amount of the subsidy and what tuition must the students pay?

Accepted Answer

a∙If the market is competitive and left

Question 8

A landfill site produces an obnoxious odor.Homes downwind of the site rent for $1000 per month while homes upwind of the site rent for $1500 per month.If the odor is the only detectable difference between two neighborhoods, the difference in the rent is the ________ of the odor.

Accepted Answer

A) social cost 
B) external cost 
C) private cost 
D) marginal cost-benefit 
E) private benefit 
A) social cost 
B) external cost 
C) private cost 
D) marginal cost-benefit 
E) private benefit

Question 9

The cost of producing an additional unit of a good or service that falls on people other than the producer is the marginal

Accepted Answer

A) external cost. 
B) private cost. 
C) social cost. 
D) social benefit. 
E) None of the above answers is correct. 
A) external cost. 
B) private cost. 
C) social cost. 
D) social benefit. 
E) None of the above answers is correct.

Question 10

Discuss the difference between a private cost and a social cost.

Accepted Answer

A private cost is the cost of producing

Question 11

When the production of a good has a marginal external cost, which of the following occurs in an unregulated market?
I∙Overproduction relative to the efficient level will occur.
Ii∙The market price is less than the marginal social cost at the equilibrium quantity.
Iii∙A deadweight loss occurs.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) i, ii, and iii 
A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) i, ii, and iii

Question 12

The sum of the marginal private benefit and the marginal external benefit derived from eco-tourism in British Columbia is called the

Accepted Answer

A) total private benefit. 
B) net gain. 
C) total external benefit. 
D) marginal social benefit. 
E) total Coase benefit. 
A) total private benefit. 
B) net gain. 
C) total external benefit. 
D) marginal social benefit. 
E) total Coase benefit.

Question 13

The figure above shows the demand for college education (D), the marginal social benefit of college education (MSB), and the marginal cost of the private schools (MC).
-Using the figure above, suppose education is provided by public colleges, where tuition is set at $10,000 a year.When the market is in equilibrium, the marginal social benefit is ________, the marginal cost is ________, and the number of students enrolled is ________.

Accepted Answer

A) $25,000; $25,000; efficient 
B) $25,000; $10,000; inefficient 
C) $15,000; $25,000; inefficient 
D) $15,000; $15,000; efficient 
E) $25,000; $15,000; inefficient 
A) $25,000; $25,000; efficient 
B) $25,000; $10,000; inefficient 
C) $15,000; $25,000; inefficient 
D) $15,000; $15,000; efficient 
E) $25,000; $15,000; inefficient

Question 14

-The table above gives the private costs and external costs of producing paper.
a∙Complete the table by finding the marginal social cost at each level of production.
b∙If the market is competitive and is left unregulated and 400 tons of paper are produced, what is the price of a ton of paper?
c∙If the government imposes a tax equal to the external cost at each level of production, what price would be charged if 400 tons are produced?

Accepted Answer

@#IMG-DLM& 
a∙The table above completes the margin

Question 15

Which of the following is an example of an activity that creates an external cost?
I∙a smoker emitting second-hand smoke
Ii∙sulfur emitting from a smoke stack
Iii∙throwing garbage on the roadside

Accepted Answer

A) i only 
B) i and ii 
C) iii only 
D) ii and iii 
E) i, ii, and iii 
A) i only 
B) i and ii 
C) iii only 
D) ii and iii 
E) i, ii, and iii

Question 16

Individuals making decisions about how much to purchase of a product with an external benefit base their decisions on which of the following?

Accepted Answer

A) the price and marginal private benefit 
B) the economically efficient output 
C) the price and the marginal social benefit 
D) the size of the deadweight loss 
E) the size of the external benefit and the price 
A) the price and marginal private benefit 
B) the economically efficient output 
C) the price and the marginal social benefit 
D) the size of the deadweight loss 
E) the size of the external benefit and the price

Question 17

-The above figure shows the market for college education in the United States.With no government intervention, the unregulated market equilibrium is ________ because education generates ________.

Accepted Answer

A) efficient; positive external benefits 
B) inefficient; positive external benefits 
C) inefficient; positive external costs 
D) efficient; positive external costs 
E) inefficient; public goods 
A) efficient; positive external benefits 
B) inefficient; positive external benefits 
C) inefficient; positive external costs 
D) efficient; positive external costs 
E) inefficient; public goods

Question 18

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.At 10 concerts, the

Accepted Answer

A) marginal private cost equals the marginal external cost. 
B) marginal social cost equals $60,000. 
C) marginal private cost is more than $40,000. 
D) marginal external cost equals $60,000. 
E) marginal external cost equals $80,000. 
A) marginal private cost equals the marginal external cost. 
B) marginal social cost equals $60,000. 
C) marginal private cost is more than $40,000. 
D) marginal external cost equals $60,000. 
E) marginal external cost equals $80,000.

Question 19

Which of the following are devices that the government uses to achieve a more efficient allocation of resources in the presence of external benefits?

Accepted Answer

A) taxes, private subsidies, and regulation 
B) public provision, taxes, and private subsidies 
C) regulations, public provision, and vouchers 
D) vouchers, public provision, and private subsidies 
E) public provision, taxes, and vouchers 
A) taxes, private subsidies, and regulation 
B) public provision, taxes, and private subsidies 
C) regulations, public provision, and vouchers 
D) vouchers, public provision, and private subsidies 
E) public provision, taxes, and vouchers

Question 20

-The figure above shows the market for private elementary school education in Chicago.There is no external cost of private elementary education.If the government does not intervene in this market, the deadweight loss equals

Accepted Answer

A) 0. 
B) $800,000. 
C) $1,600,000. 
D) more than $1,600,000. 
E) more than $800,000 and less than $1,600,000. 
A) 0. 
B) $800,000. 
C) $1,600,000. 
D) more than $1,600,000. 
E) more than $800,000 and less than $1,600,000.

The Coase theorem deals with the problem of pollution by

How has air quality changed in the United States since 1980?

External benefits are the extra

-The figure above shows an education market in which the government is providing households with vouchers.In total, how much do the schools receive for a student?

-The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve.If the market is competitive and unregulated, the equilibrium price is per kilowatt hour and the equilibrium quantity is billions of kilowatt hours per day.

-The figure above shows the market for annual influenza immunizations the United States.The efficient quantity of immunizations is

A landfill site produces an obnoxious odor.Homes downwind of the site rent for $1000 per month while homes upwind of the site rent for $1500 per month.If the odor is the only detectable difference between two neighborhoods, the difference in the rent is the ________ of the odor.

The cost of producing an additional unit of a good or service that falls on people other than the producer is the marginal

Discuss the difference between a private cost and a social cost.

When the production of a good has a marginal external cost, which of the following occurs in an unregulated market? I∙Overproduction relative to the efficient level will occur. Ii∙The market price is less than the marginal social cost at the equilibrium quantity. Iii∙A deadweight loss occurs.

The sum of the marginal private benefit and the marginal external benefit derived from eco-tourism in British Columbia is called the

Which of the following is an example of an activity that creates an external cost? I∙a smoker emitting second-hand smoke Ii∙sulfur emitting from a smoke stack Iii∙throwing garbage on the roadside

Individuals making decisions about how much to purchase of a product with an external benefit base their decisions on which of the following?

-The above figure shows the market for college education in the United States.With no government intervention, the unregulated market equilibrium is because education generates .

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.At 10 concerts, the

Which of the following are devices that the government uses to achieve a more efficient allocation of resources in the presence of external benefits?

-The figure above shows the market for private elementary school education in Chicago.There is no external cost of private elementary education.If the government does not intervene in this market, the deadweight loss equals

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 10: Externalities

The Coase theorem deals with the problem of pollution by

How has air quality changed in the United States since 1980?

External benefits are the extra

-The figure above shows an education market in which the government is providing households with vouchers.In total, how much do the schools receive for a student?

-The figure above shows the market for annual influenza immunizations the United States.The efficient quantity of immunizations is

A landfill site produces an obnoxious odor.Homes downwind of the site rent for $1000 per month while homes upwind of the site rent for $1500 per month.If the odor is the only detectable difference between two neighborhoods, the difference in the rent is the ________ of the odor.

The cost of producing an additional unit of a good or service that falls on people other than the producer is the marginal

Discuss the difference between a private cost and a social cost.

When the production of a good has a marginal external cost, which of the following occurs in an unregulated market? I∙Overproduction relative to the efficient level will occur. Ii∙The market price is less than the marginal social cost at the equilibrium quantity. Iii∙A deadweight loss occurs.

The sum of the marginal private benefit and the marginal external benefit derived from eco-tourism in British Columbia is called the

Which of the following is an example of an activity that creates an external cost? I∙a smoker emitting second-hand smoke Ii∙sulfur emitting from a smoke stack Iii∙throwing garbage on the roadside

Individuals making decisions about how much to purchase of a product with an external benefit base their decisions on which of the following?

-The above figure shows the market for college education in the United States.With no government intervention, the unregulated market equilibrium is ________ because education generates ________.

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.At 10 concerts, the

Which of the following are devices that the government uses to achieve a more efficient allocation of resources in the presence of external benefits?

-The figure above shows the market for private elementary school education in Chicago.There is no external cost of private elementary education.If the government does not intervene in this market, the deadweight loss equals

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-The above figure shows the market for college education in the United States.With no government intervention, the unregulated market equilibrium is because education generates .