Exam 16: Externalities and Public Goods

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.If regulators limited production to 200 bushels,the deadweight loss relative to the option of setting the optimal tax would be would be

Common property

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.The tax that would have to exist to achieve the socially optimal level of production would be

The opportunity cost doctrine suggests that which of the following are not costs of government educational programs?

Which of the following "externalities" does not distort the allocation of resources? I.An individual's unwillingness to cut his or her own lawn in an otherwise immaculately kept neighborhood. II.Smoke produced by a new firm in an area that raises the costs of other firms. III.A new firm's bidding up skilled wages in an area,thus raising costs of other firms. IV.An individual's unwillingness to obtain job training,thereby lowering the total GNP.

Suppose residents of Toadhop live on the Quabache River,a river prone to flooding.Suppose there are 1000 (type A)people who value flood control more than the 1000 (type B)people. where Q measures the quality of flood control.If the price of a unit of flood control is $100,000 and the citizens of Toadhop gather for a town hall meeting to find the socially optimal level of flood control,and they are successful,how much will type B individuals contribute per unit of flood control?

A nonrival good is a good that

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.The "optimal" amount of environmental damage would be

Suppose residents of Toadhop live on the Quabache River,a river prone to flooding.Suppose there are 1000 (type A)people who value flood control more than the 1000 (type B)people. where Q measures the quality of flood control.If the price of a unit of flood control is $100000 and the citizens of Toadhop gather for a town hall meeting to find the socially optimal level of flood control,and they are successful,how much will each type A individual contribute in total?

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.The price that suppliers would receive after they paid the optimal tax would be

The "free-rider problem" of public goods refers to

In perfect competition,environmental externalities need not distort the allocation of resources providing

In drilling a new oil well in an existing oil field,the fact that output on existing wells is reduced means that

A perfectly competitive steel mill that produces large amounts of pollution (a negative externality)will,from a social point of view,

A nonexclusive good is a good that

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.The total dollar value damage to society is

To reach an economically efficient output level,the size of an excise tax imposed on a firm generating a negative externality should be

Efficient production of a public good requires

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.The market equilibrium quantity is

Consider four possible benefits of a water resources project: I.Provides employment to construction workers currently building houses. II.Provides electric power to the market. III.Provides reduced flood risk to individuals living along the river. IV.Raises the profits of MacDonald's stands in the area that serve construction workers. According to the opportunity cost notion of cost-benefit analysis,which of these are true benefits?