Exam 17: Externalities and Public Goods

An environmental economic consulting firm is hired to measure the negative externalities associated with the pollution from an industry.The consultants calculate the marginal social cost of production to be MSC = 2Q+30 and the marginal private cost of production to be +30.The market demand curve can be expressed as If the consultants have accurately measured the impact of the pollution externality,the deadweight loss from producing at the market equilibrium is

The free rider problem occurs

To move closer to the social optimum when a negative externality exists, the cost to society of the externality should be

Efficient provision of a public good occurs when

Which of the following is not a good example of common property?

Which of the following is a real-world example of a negative externality?

When the market for product Y includes a positive externality,

In markets with externalities or public goods,

Which one of the following statements is false?

When the market for product X includes a negative externality,

The efficient amount of pollution in society

In the diagram below,the external cost savings from producing at the socially optimal quantity rather than at the private equilibrium can be represented as:

An example of a good that is nonexclusive but rival is

Suppose that an industry emits a chemical that pollutes the ground water.Without considering the effects of the pollution,the industry has a marginal private cost curve of MPC = Q+30.The market demand curve is ,while the marginal social cost curve is MSC = 2Q + 30.How can the optimal level of emissions fee best be depicted on a graph in this problem?

An environmental economic consulting firm is hired to measure the negative externalities associated with the pollution from an industry.The consultants calculate the marginal social cost of production to be MSC = 2Q+30 and the marginal private cost of production to be +30.The market demand curve for the industry can be expressed as P = 60-Q.What is the socially optimal level of output?