Question 1

The United States recycles only about 15 percent of _____

Accepted Answer

A) aluminum cans. 
B) office papers. 
C) corrugated boxes. 
D) newspapers. 
E) garbage. 
A) aluminum cans. 
B) office papers. 
C) corrugated boxes. 
D) newspapers. 
E) garbage. E

Question 2

The marginal social benefit curve is downward sloping under variable technology.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following is an exhaustible resource?

Accepted Answer

A) timber 
B) oil 
C) fish 
D) grasslands 
E) rivers 
A) timber 
B) oil 
C) fish 
D) grasslands 
E) rivers B

Question 4

When society receives more benefits from a good than the individuals who consume the good,_____

Accepted Answer

A) the marginal social benefit from the good is less than the marginal social cost. 
B) the average social benefit is less than the average social cost. 
C) the property rights on the good have been well defined. 
D) the production of the good generates a positive externality. 
E) the production of the good generates a negative externality. 
A) the marginal social benefit from the good is less than the marginal social cost. 
B) the average social benefit is less than the average social cost. 
C) the property rights on the good have been well defined. 
D) the production of the good generates a positive externality. 
E) the production of the good generates a negative externality.

Question 5

Exhibit 17.8
  
-Refer to Exhibit 17.8,which shows the demand,the supply,and the marginal social benefit curves.The graph shows market equilibrium in the presence of ______

Accepted Answer

A) positive externalities. 
B) positive and negative externalities. 
C) negative externalities. 
D) the Coase theorem. 
E) asymmetric information. 
A) positive externalities. 
B) positive and negative externalities. 
C) negative externalities. 
D) the Coase theorem. 
E) asymmetric information.

Question 6

Exhibit 17.5
  
-Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The social welfare loss that results at A' is shown by area _____

Accepted Answer

A) edcb. 
B) eade. 
C) abc. 
D) acd. 
E) abe. 
A) edcb. 
B) eade. 
C) abc. 
D) acd. 
E) abe.

Question 7

Exhibit 17.5
  
-Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.Point b shows _____

Accepted Answer

A) the social welfare loss. 
B) the optimal level of greenhouse gas emissions for a given rate of output. 
C) the total social gain from producing the socially efficient output. 
D) the marginal social cost. 
E) the marginal social benefit. 
A) the social welfare loss. 
B) the optimal level of greenhouse gas emissions for a given rate of output. 
C) the total social gain from producing the socially efficient output. 
D) the marginal social cost. 
E) the marginal social benefit.

Question 8

Marginal social cost is equal to _____

Accepted Answer

A) the total private cost of production. 
B) marginal private cost. 
C) marginal external cost. 
D) marginal private cost plus marginal external cost. 
E) marginal private cost divided by marginal external cost. 
A) the total private cost of production. 
B) marginal private cost. 
C) marginal external cost. 
D) marginal private cost plus marginal external cost. 
E) marginal private cost divided by marginal external cost.

Question 9

Which federal law governs solid waste disposal?

Accepted Answer

A) the Superfund Law of 1980 
B) the Coase theorem 
C) the Resource Conservation and Recovery Act of 1976 
D) the Clean Air Act of 1970 
E) the Clean Water Act of 1972 
A) the Superfund Law of 1980 
B) the Coase theorem 
C) the Resource Conservation and Recovery Act of 1976 
D) the Clean Air Act of 1970 
E) the Clean Water Act of 1972

Question 10

Nearly half of the Superfund has been spent on _____

Accepted Answer

A) the education of public on environmental issues. 
B) research. 
C) court costs and legal fees. 
D) cleaning rivers that have been polluted. 
E) the development and installation of antipollution devices. 
A) the education of public on environmental issues. 
B) research. 
C) court costs and legal fees. 
D) cleaning rivers that have been polluted. 
E) the development and installation of antipollution devices.

Question 11

To maximize social welfare in the presence of a negative externality,marginal _____ must equal marginal _____.

Accepted Answer

A) social cost; private benefit 
B) private cost; external cost 
C) social cost; social benefit 
D) private cost; social benefit 
E) social cost; external cost 
A) social cost; private benefit 
B) private cost; external cost 
C) social cost; social benefit 
D) private cost; social benefit 
E) social cost; external cost

Question 12

The byproducts of production or consumption that impose costs on other consumers or firms are known as _____

Accepted Answer

A) negative externalities. 
B) transaction costs. 
C) sunk costs. 
D) positive externalities. 
E) moral hazards. 
A) negative externalities. 
B) transaction costs. 
C) sunk costs. 
D) positive externalities. 
E) moral hazards.

Question 13

The optimal air quality is determined where the marginal social cost of improving air quality is equal to the marginal social benefit from cleaner air.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not used by the U.S.government to limit overfishing in U.S.waters?

Accepted Answer

A) laws to limit the total catch 
B) laws to limit the size of fish caught 
C) laws to impose the minimum price of fish 
D) limits to the length of the fishing season 
E) limits to the types of fishing equipment used 
A) laws to limit the total catch 
B) laws to limit the size of fish caught 
C) laws to impose the minimum price of fish 
D) limits to the length of the fishing season 
E) limits to the types of fishing equipment used

Question 15

Which of the following is an exhaustible resource?

Accepted Answer

A) geothermal power 
B) solar energy 
C) coal deposit 
D) biomass 
E) wind energy 
A) geothermal power 
B) solar energy 
C) coal deposit 
D) biomass 
E) wind energy

Question 16

Exhibit 17.7
  
-Refer to Exhibit 17.7,which shows the optimal allocation of pollution rights to firms polluting a river.If the government does not charge firms for polluting the river,the ______

Accepted Answer

A) firms will emit Q1 units of the pollutant at a price of P0 each. 
B) firms will emit Q2 units of the pollutant at a price of P0 each. 
C) firms will emit Q0 units of the pollutant at a price of P3 each. 
D) firms will emit Q1 units of the pollutant at a price of P1 each. 
E) firms will emit Q2 units of the pollutant at a price of P2 each. 
A) firms will emit Q1 units of the pollutant at a price of P0 each. 
B) firms will emit Q2 units of the pollutant at a price of P0 each. 
C) firms will emit Q0 units of the pollutant at a price of P3 each. 
D) firms will emit Q1 units of the pollutant at a price of P1 each. 
E) firms will emit Q2 units of the pollutant at a price of P2 each.

Question 17

When consuming a good creates positive externalities,_____

Accepted Answer

A) the private demand for the good increases. 
B) the private demand for the good decreases. 
C) the private demand curve overstates the marginal social benefit of the good. 
D) the private demand curve understates the marginal social benefit of the good. 
E) the equilibrium quantity traded of the good increases without government intervention. 
A) the private demand for the good increases. 
B) the private demand for the good decreases. 
C) the private demand curve overstates the marginal social benefit of the good. 
D) the private demand curve understates the marginal social benefit of the good. 
E) the equilibrium quantity traded of the good increases without government intervention.

Question 18

To enhance social welfare,the government should encourage the production of _____

Accepted Answer

A) private goods. 
B) goods that produce moral hazard. 
C) goods that produce positive externalities. 
D) goods that have close substitutes. 
E) goods that produce negative externalities. 
A) private goods. 
B) goods that produce moral hazard. 
C) goods that produce positive externalities. 
D) goods that have close substitutes. 
E) goods that produce negative externalities.

Question 19

A meditation class meets on the second floor of a building.The first floor is a dance academy.The loud music from the academy disturbs the meditation classes.The academy could be soundproofed for a cost of $6,000 or moved at a cost of $9,000.The classroom cannot be soundproofed enough to overcome the music,but the class can be moved at a cost $5,000.According to the Coase theorem,the socially optimal solution can be achieved if _____

Accepted Answer

A) the government purchases the building. 
B) the dance academy is relocated. 
C) property rights to be noisy are granted to the nightclub. 
D) property rights to a quiet environment at another location are granted to the meditation class. 
E) both the dance academy and the meditation class relocate. 
A) the government purchases the building. 
B) the dance academy is relocated. 
C) property rights to be noisy are granted to the nightclub. 
D) property rights to a quiet environment at another location are granted to the meditation class. 
E) both the dance academy and the meditation class relocate.

Question 20

Exhibit 17.6
  
-Refer to Exhibit 17.6,which shows the market for pollution rights.The supply curve represents the amount of ______

Accepted Answer

A) toxins the firms want to dump into the river. 
B) water that can be used as an input by firms. 
C) toxins that can be dumped into the river without reducing the water quality below a certain level. 
D) pollutants the firm is willing to clean up. 
E) the pollution-causing good supplied by the industry. 
A) toxins the firms want to dump into the river. 
B) water that can be used as an input by firms. 
C) toxins that can be dumped into the river without reducing the water quality below a certain level. 
D) pollutants the firm is willing to clean up. 
E) the pollution-causing good supplied by the industry.

The United States recycles only about 15 percent of _____

The marginal social benefit curve is downward sloping under variable technology.

Which of the following is an exhaustible resource?

When society receives more benefits from a good than the individuals who consume the good,_____

Exhibit 17.8 -Refer to Exhibit 17.8,which shows the demand,the supply,and the marginal social benefit curves.The graph shows market equilibrium in the presence of ______

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The social welfare loss that results at A' is shown by area _____

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.Point b shows _____

Marginal social cost is equal to _____

Which federal law governs solid waste disposal?

Nearly half of the Superfund has been spent on _____

To maximize social welfare in the presence of a negative externality,marginal _ must equal marginal _.

The byproducts of production or consumption that impose costs on other consumers or firms are known as _____

The optimal air quality is determined where the marginal social cost of improving air quality is equal to the marginal social benefit from cleaner air.

Which of the following is not used by the U.S.government to limit overfishing in U.S.waters?

Which of the following is an exhaustible resource?

Exhibit 17.7 -Refer to Exhibit 17.7,which shows the optimal allocation of pollution rights to firms polluting a river.If the government does not charge firms for polluting the river,the ______

When consuming a good creates positive externalities,_____

To enhance social welfare,the government should encourage the production of _____

Exhibit 17.6 -Refer to Exhibit 17.6,which shows the market for pollution rights.The supply curve represents the amount of ______

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Elasticity of Demand and Supply

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, interest, entrepreneurship, and Corporate Finance

Transaction Costs, asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Poverty and Redistribution

International Trade

International Finance

Economic Development

Filters

Exam 17: Externalities and the Environment

The United States recycles only about 15 percent of _____

The marginal social benefit curve is downward sloping under variable technology.

Which of the following is an exhaustible resource?

When society receives more benefits from a good than the individuals who consume the good,_____

Exhibit 17.8 -Refer to Exhibit 17.8,which shows the demand,the supply,and the marginal social benefit curves.The graph shows market equilibrium in the presence of ______

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The social welfare loss that results at A' is shown by area _____

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.Point b shows _____

Marginal social cost is equal to _____

Which federal law governs solid waste disposal?

Nearly half of the Superfund has been spent on _____

To maximize social welfare in the presence of a negative externality,marginal _____ must equal marginal _____.

The byproducts of production or consumption that impose costs on other consumers or firms are known as _____

The optimal air quality is determined where the marginal social cost of improving air quality is equal to the marginal social benefit from cleaner air.

Which of the following is not used by the U.S.government to limit overfishing in U.S.waters?

Which of the following is an exhaustible resource?

Exhibit 17.7 -Refer to Exhibit 17.7,which shows the optimal allocation of pollution rights to firms polluting a river.If the government does not charge firms for polluting the river,the ______

When consuming a good creates positive externalities,_____

To enhance social welfare,the government should encourage the production of _____

Exhibit 17.6 -Refer to Exhibit 17.6,which shows the market for pollution rights.The supply curve represents the amount of ______

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Elasticity of Demand and Supply

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, interest, entrepreneurship, and Corporate Finance

Transaction Costs, asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Poverty and Redistribution

International Trade

International Finance

Economic Development

Filters

To maximize social welfare in the presence of a negative externality,marginal _ must equal marginal _.