Exam 13: The Environment, Health, and Safety

This graph illustrates the marginal cost,marginal private benefit,and marginal social benefit of immunization against a contagious childhood disease. If school districts imposed a rule that all children must be immunized to enroll,and 300 children are school-aged

Two firms can use five different technologies to produce the same quantity of output: 1,2,3,4 and 5.The first technology is the cheapest,but also the dirtiest.The fifth technology is the most expensive,but results in the lowest levels of pollution.The amount of pollution emitted by each firm and the cost of the technologies are shown in the table. Technology 1 2 3 4 5 Emissions 10 tons 8 tons 6 tons 4 tons 2 tons Acme's Costs \ 750 \ 800 \ 1000 \ 1400 \ 2000 FirmCo's Costs \ 500 \ 700 \ 1200 \ 2200 \ 4000 Suppose the firms are both currently using technology 1,and that the government adopts rules requiring each firm to reduce pollution by 20%.To comply,the firms will adopt technology ___ for a total cost of __________.

Suppose a treacherous stretch of road winds through Deadman's Canyon for 5 miles.A highway department study estimates that better lighting would reduce the traffic fatality rates as follows: Number of lights Estimated deaths per year Total installation cost (in millions) 0 3 \ 0 1 2 \ 3 2 1.5 \ 7 3 1.2 \ 12 4 1 \ 18 5 0.9 \ 25 Suppose that experts have estimated the statistical value of a life saved to be $8m.The highway department should install ___ lights in Deadman's Canyon.

Which argument in favor of enacting workplace safety regulations can be justified using economic tools or observation?

The three firms shown below can choose among three workplace safety alternatives: continue with the status quo,provide safety training or purchase new safety equipment.The injury rates for the firms under the three alternatives as well as the costs of the alternatives are shown in the table.The cost of treating an injury is $200. Status Quo Safety Training New Safety Equipment 0 \ 100 \ 700 0 \ 50 \ 600 0 \ 200 \ 500 Suppose the government requires all three firms to install the new safety equipment.Relative to the status quo,the marginal cost would be _______ and the marginal benefit would be ______.

Suppose that the marginal benefit of having a security guard at the airport is MB₁,at the bank is MB₂,and at the mall is MB₃.The marginal cost of assigning security guard is the same for all three places,and it is represented by MC₂. The marginal cost curves are upward-sloping because the first guards assigned are the guards with the lowest opportunity costs for performing this task.This is referred to as the

A great deal of medical expenditure inflation,from 4% in 1940 to 14% today,has to do with

Suppose that a government agency is trying to decide between two pollution reduction policy options.Under the permit option,100 pollution permits would be sold,each allowing emission of one unit of pollution.Firms would be forced to shut down if they produced any units of pollution for which they did not hold a permit.Under the pollution tax option,firms would be taxed $250 for each unit of pollution produced.The regulated firms all currently pollute and face varying costs of pollution reduction,though all face increasing marginal costs of pollution reduction. The two policies being considered will result in the same amount of pollution reduction

When Cody went to the physician with a sore elbow,after hearing Cody's symptoms and examining the elbow manually,Cody's physician had two options: (1)prescribe an anti-inflammatory drug and advise Cody to abstain from vigorous physical activity for a period;or (2)advise Cody to undergo a magnetic resonance imaging (MRI)exam,a costly diagnostic procedure. Which of the following physicians is more likely to go with option (1)?

According to the textbook,public concern with under treatment by HMO's has led to proposals that would

Direct regulation of workplace safety by the Occupational Safety and Health Administration (OSHA)will result in

Workers' compensation is

Suppose that the marginal benefit of having a security guard at the airport is MB₁,at the bank is MB₂,and at the mall is MB₃.The marginal cost of assigning security guard is the same for all three places,and it is represented by MC₂. The optimal number of security guards at the airport is ____,the optimal number of security guards at the bank is _______,and the optimal number of security guards at the mall is ______.

According to the textbook,the Manning study suggests that a large share of the inflation in medical expenditures is caused by

The __________ the elasticity of demand for medical care,the __________ the extent of over consumption of medical treatment due to insurance.

Two firms can use five different technologies to produce the same quantity of output: 1,2,3,4 and 5.The first technology is the cheapest,but also the dirtiest.The fifth technology is the most expensive,but results in the lowest levels of pollution.The amount of pollution emitted by each firm and the cost of the technologies are shown in the table. Technology 1 2 3 4 5 Emissions 10 tons 8 tons 6 tons 4 tons 2 tons Acme's Costs \ 750 \ 800 \ 1000 \ 1400 \ 2000 FirmCo's Costs \ 500 \ 700 \ 1200 \ 2200 \ 4000 Suppose that the government imposes a tax of $150 per ton of pollution.As a result,pollution emissions are __________ tons for a total cost of ____.

In contrast to first-dollar insurance coverage,the efficiency concern for HMO's is that

Suppose that the marginal benefit of having a security camera in the library is given by MB,at the supermarket is given by MB₁ and at the museum is given by MB₂.All values are per week. An increase in crime would ______ expenditures on security cameras and _____ the number of cameras.

Your state is considering enacting a law requiring that all motorcycle operators and their passengers wear a helmet.Motorcyclists vary in the degree to which they value being able to ride helmet-less and in the extent to which they value the safety provided by a helmet. Without the regulation,who would wear a helmet?

According to the text,the only sensible criterion for allocating scarce health care resources is