Question 1

Polluting firms charge prices below what would exist without pollution.

Accepted Answer

A) True 
 B)False

Question 2

The "marginal social benefit" of an economic activity is the benefit that is just above the margin of being zero.

Accepted Answer

A) True 
 B)False

Question 3

If the MPC of production is less than the MSC,the market will produce too much of the product.

Accepted Answer

A) True 
 B)False

Question 4

The optimum level of pollution is zero.

Accepted Answer

A) True 
 B)False

Question 5

Enjoying the smell of bread baking from your neighbor's house is an example of a negative externality.

Accepted Answer

A) True 
 B)False

Question 6

A pollution rights market can be an efficient method of pollution control.

Accepted Answer

A) True 
 B)False

Question 7

When firms make decisions about output and about the amount of pollution that they produce,without government regulation

Accepted Answer

A) Firms only consider their private benefits and costs when making their choices 
B) Firms choose not to pollute because it's bad for their public image 
C) Social costs are always 
A) Firms only consider their private benefits and costs when making their choices 
B) Firms choose not to pollute because it's bad for their public image 
C) Social costs are always

Question 8

When a firm has to clean environmental resources prior to using them,the consumers of that firm's products are charged higher prices than would exist in the absence of pollution.

Accepted Answer

A) True 
 B)False

Question 9

A major advantage of using taxes to control pollution is that they provide an incentive to the polluter to seek improved ways to clean up dischargE.

Accepted Answer

A) True 
 B)False

Question 10

The socially optimal level of production for any good or service is found where MPB=MPC.

Accepted Answer

A) True 
 B)False

Question 11

Implicit costs are also known as accounting costs.

Accepted Answer

A) True 
 B)False

Question 12

If your snoring keeps your roommate from sleeping,you roommate is experiencing a negative externality.

Accepted Answer

A) True 
 B)False

Question 13

When a firm pollutes,its product will be under-priced and over-produceD.

Accepted Answer

A) True 
 B)False

Question 14

The optimum level of pollution control is where marginal social benefit equals marginal social cost.

Accepted Answer

A) True 
 B)False

Question 15

The Following Questions Refer to the graph below.  
-A tax of more than T1 per unit on polluted discharge will induce the firm to clean up

Accepted Answer

A) Q1 
B) More than q1 
C) Q 
D) More than q but less than q1 
E) Zero 
A) Q1 
B) More than q1 
C) Q 
D) More than q but less than q1 
E) Zero

Question 16

The Following Questions Refer to the graph below.  
-Assume that the current market demand and supply curves for Z are D1 and S1 and there are positive social spillovers associated with the production of Z.Which curve could represent the MSC curve for Z?

Accepted Answer

A) D1 
B) D2 
C) S1 
D) S2 
E) None of the above 
A) D1 
B) D2 
C) S1 
D) S2 
E) None of the above

Question 17

People have an incentive to pollute when

Accepted Answer

A) There is collective consumption of an environmental service 
B) No one has property rights to the environment 
C) It is less expensive to pollute than to clean up 
D) The MPC of polluting < MPC of cleanup 
E) All of the above 
A) There is collective consumption of an environmental service 
B) No one has property rights to the environment 
C) It is less expensive to pollute than to clean up 
D) The MPC of polluting < MPC of cleanup 
E) All of the above

Question 18

It is efficient for regulatory bodies to induce reduction in pollution when the marginal social cost is lowest,regardless of which firms are the worst polluters.

Accepted Answer

A) True 
 B)False

Question 19

Following Questions are based on the following information.
In a small city located on a lake,the raw sewage of the city is dumped directly into the lakE.This has been a source of distress for citizens who like to swim,fish,and water ski.A study has been instituted to determine what value the citizens place on pollution control,and the results are listed in the following tablE.Costs of pollution control are also listed.
  
-The marginal social benefit of the sixth unit of pollution control is

Accepted Answer

A) $495,000 
B) $180,000 
C) $80,000 
D) $60,000 
E) $40,000 
A) $495,000 
B) $180,000 
C) $80,000 
D) $60,000 
E) $40,000

Question 20

To date,there has been no formal use of pollution rights markets.

Accepted Answer

A) True 
 B)False

Polluting firms charge prices below what would exist without pollution.

The "marginal social benefit" of an economic activity is the benefit that is just above the margin of being zero.

If the MPC of production is less than the MSC,the market will produce too much of the product.

The optimum level of pollution is zero.

Enjoying the smell of bread baking from your neighbor's house is an example of a negative externality.

A pollution rights market can be an efficient method of pollution control.

When firms make decisions about output and about the amount of pollution that they produce,without government regulation

When a firm has to clean environmental resources prior to using them,the consumers of that firm's products are charged higher prices than would exist in the absence of pollution.

A major advantage of using taxes to control pollution is that they provide an incentive to the polluter to seek improved ways to clean up dischargE.

The socially optimal level of production for any good or service is found where MPB=MPC.

Implicit costs are also known as accounting costs.

If your snoring keeps your roommate from sleeping,you roommate is experiencing a negative externality.

When a firm pollutes,its product will be under-priced and over-produceD.

The optimum level of pollution control is where marginal social benefit equals marginal social cost.

The Following Questions Refer to the graph below. -A tax of more than T₁ per unit on polluted discharge will induce the firm to clean up

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D₁ and S₁ and there are positive social spillovers associated with the production of Z.Which curve could represent the MSC curve for Z?

People have an incentive to pollute when

It is efficient for regulatory bodies to induce reduction in pollution when the marginal social cost is lowest,regardless of which firms are the worst polluters.

To date,there has been no formal use of pollution rights markets.

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Monopoly Power: Can Markets Be Controlled

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters

Exam 4: Pollution Problems: Must We Foul Our Own Nests

Polluting firms charge prices below what would exist without pollution.

The "marginal social benefit" of an economic activity is the benefit that is just above the margin of being zero.

If the MPC of production is less than the MSC,the market will produce too much of the product.

The optimum level of pollution is zero.

Enjoying the smell of bread baking from your neighbor's house is an example of a negative externality.

A pollution rights market can be an efficient method of pollution control.

When firms make decisions about output and about the amount of pollution that they produce,without government regulation

When a firm has to clean environmental resources prior to using them,the consumers of that firm's products are charged higher prices than would exist in the absence of pollution.

A major advantage of using taxes to control pollution is that they provide an incentive to the polluter to seek improved ways to clean up dischargE.

The socially optimal level of production for any good or service is found where MPB=MPC.

Implicit costs are also known as accounting costs.

If your snoring keeps your roommate from sleeping,you roommate is experiencing a negative externality.

When a firm pollutes,its product will be under-priced and over-produceD.

The optimum level of pollution control is where marginal social benefit equals marginal social cost.

The Following Questions Refer to the graph below. -A tax of more than T1 per unit on polluted discharge will induce the firm to clean up

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D1 and S1 and there are positive social spillovers associated with the production of Z.Which curve could represent the MSC curve for Z?

People have an incentive to pollute when

It is efficient for regulatory bodies to induce reduction in pollution when the marginal social cost is lowest,regardless of which firms are the worst polluters.

To date,there has been no formal use of pollution rights markets.

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Monopoly Power: Can Markets Be Controlled

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters

The Following Questions Refer to the graph below. -A tax of more than T₁ per unit on polluted discharge will induce the firm to clean up

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D₁ and S₁ and there are positive social spillovers associated with the production of Z.Which curve could represent the MSC curve for Z?