Exam 17: Externalities and Public Goods

Special interest groups often:

Bargaining costs are generally high in cases involving environmental externalities because:

A negative externality is present on a market,leading social marginal cost, ,to exceed marginal cost As perceived by producers,which is also the supply curve in this competitive market.Inverse demand in the market is The optimal corrective tax should be set to the difference between:

A nonexclusive good is a good which:

Condorcet's Paradox occurs when:

Externalities between two firms can be "internalized" if: I.The two firms merge. II.Bargaining costs are zero. III.The externalities affect each firm equally. IV.Marginal costs for both firms are constant. Which statement(s)correctly complete the sentence?

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

Median voter decisions may not yield efficient allocations of resources because:

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

Which of the following purported externalities in fact 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 which raises the costs of other firms. III.A new firm's bidding up skilled wages in an area,thereby raising costs of other firms. IV.An individual's unwillingness to obtain job training,thereby lowering the total GNP. Possible choices:

Society's demand curve for a public good:

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 which serves construction workers. Which of these are true social benefits of the project?

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

A non-rival good is a good which:

If preferences are one-dimensional and preferences are single peaked,majority rule will result in selection of the project most favored by:

Perfectly competitive markets will tend to under-allocate resources to nonexclusive public goods because:

In the case of a negative externality,the social marginal cost will:

Some economists have hypothesized that government bureaucracies seek to maximize:

Left to their own,private markets tend to:

If bargaining is costless,the assignment of property rights for an externality: