Question 1

If coal mining produces a negative externality because it leads to environmental damage, then, at the market equilibrium, the:

Accepted Answer

A) price of coal will be higher than the socially optimal price. 
B) quantity of coal produced will be less than the socially optimal quantity. 
C) quantity of coal produced will be greater than the socially optimal quantity. 
D) supply curve will lie to the left of the regulated supply curve. 
A) price of coal will be higher than the socially optimal price. 
B) quantity of coal produced will be less than the socially optimal quantity. 
C) quantity of coal produced will be greater than the socially optimal quantity. 
D) supply curve will lie to the left of the regulated supply curve.

Question 2

This graph shows the marginal cost and marginal benefit associated with roadside litter clean up.  Assume that the marginal benefit curve and marginal cost curve each have their usual slope.   A state initiative requiring towns to spend at least $20 per day on litter removal would be ________ because ________.

Accepted Answer

A) efficient; reducing litter is socially optimal 
B) inefficient; the marginal cost of litter removal would exceed the marginal benefit 
C) inefficient; $20 is insufficient to remove all of the litter 
D) efficient; it solves the inefficiency created by the negative externality 
A) efficient; reducing litter is socially optimal 
B) inefficient; the marginal cost of litter removal would exceed the marginal benefit 
C) inefficient; $20 is insufficient to remove all of the litter 
D) efficient; it solves the inefficiency created by the negative externality

Question 3

Refer to the figure below. At the market equilibrium quantity, the social marginal cost of the last ton of paper produced is ________ the marginal benefit of the last ton of paper produced.

Accepted Answer

A) less than or equal to 
B) equal to 
C) less than 
D) greater than 
A) less than or equal to 
B) equal to 
C) less than 
D) greater than

Question 4

The most efficient distribution of pollution abatement is such that the:

Accepted Answer

A) extent of pollution abatement is the same across all geographic regions. 
B) extent of pollution abatement is the same across all polluters. 
C) largest reductions in pollution are made by the largest polluters. 
D) marginal cost of abatement is the same across all polluters. 
A) extent of pollution abatement is the same across all geographic regions. 
B) extent of pollution abatement is the same across all polluters. 
C) largest reductions in pollution are made by the largest polluters. 
D) marginal cost of abatement is the same across all polluters.

If coal mining produces a negative externality because it leads to environmental damage, then, at the market equilibrium, the:

This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope. A state initiative requiring towns to spend at least $20 per day on litter removal would be because .

Refer to the figure below. At the market equilibrium quantity, the social marginal cost of the last ton of paper produced is ________ the marginal benefit of the last ton of paper produced.

The most efficient distribution of pollution abatement is such that the:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

Exam 11: Externalities, Property Rights, and the Environment

If coal mining produces a negative externality because it leads to environmental damage, then, at the market equilibrium, the:

Refer to the figure below. At the market equilibrium quantity, the social marginal cost of the last ton of paper produced is ________ the marginal benefit of the last ton of paper produced.

The most efficient distribution of pollution abatement is such that the:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters