Question 1

Most water pollution in the United States comes from manufacturing sites.

Accepted Answer

A) True 
 B)False

Question 2

If farmers decide individually whether or not to vaccinate their cattle against mad cow disease,which of the following is true?

Accepted Answer

A) The equilibrium quantity is too low for efficiency. 
B) The equilibrium price and quantity are too high for efficiency. 
C) The equilibrium price is efficient. 
D) The equilibrium quantity is too high for efficiency. 
E) The equilibrium price and quantity are efficient. 
A) The equilibrium quantity is too low for efficiency. 
B) The equilibrium price and quantity are too high for efficiency. 
C) The equilibrium price is efficient. 
D) The equilibrium quantity is too high for efficiency. 
E) The equilibrium price and quantity are efficient.

Question 3

Markets can allocate resources efficiently only as long as _____

Accepted Answer

A) property rights are well defined and can be easily enforced. 
B) property rights are well defined but not easily enforced. 
C) property rights are not defined but can be easily enforced. 
D) property rights are not defined and not easily enforced. 
E) a nonrenewable resource has been used in the production of the good. 
A) property rights are well defined and can be easily enforced. 
B) property rights are well defined but not easily enforced. 
C) property rights are not defined but can be easily enforced. 
D) property rights are not defined and not easily enforced. 
E) a nonrenewable resource has been used in the production of the good.

Question 4

Exhibit 17.5
  
-Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The marginal social cost is found at _____

Accepted Answer

A)  point c. 
B)  point a. 
C)  point b. 
D)  A 
E)  A' 
A)  point c. 
B)  point a. 
C)  point b. 
D)  A 
E)  A'

Question 5

At the market output and price for a good whose production causes pollution,_____

Accepted Answer

A) the marginal social cost of production is negative. 
B) the marginal social cost of production exceeds the marginal social benefit of production. 
C) the marginal private cost of production equals the marginal private benefit of production. 
D) the marginal social benefit of production equals the marginal social cost of production. 
E) the marginal social benefit of production exceeds the marginal private cost of production. 
A) the marginal social cost of production is negative. 
B) the marginal social cost of production exceeds the marginal social benefit of production. 
C) the marginal private cost of production equals the marginal private benefit of production. 
D) the marginal social benefit of production equals the marginal social cost of production. 
E) the marginal social benefit of production exceeds the marginal private cost of production.

Question 6

If consuming a good creates a positive externality,_____

Accepted Answer

A) the marginal private benefits from consuming the good exceed the marginal social benefits. 
B) the marginal social benefits from consuming the good exceed the marginal private benefits. 
C) the private demand for the good is equal to the marginal social benefit. 
D) the private demand for the good is greater than the marginal social benefit. 
E) the private demand curve for the good shifts to the right to coincide with the marginal social benefit curve. 
A) the marginal private benefits from consuming the good exceed the marginal social benefits. 
B) the marginal social benefits from consuming the good exceed the marginal private benefits. 
C) the private demand for the good is equal to the marginal social benefit. 
D) the private demand for the good is greater than the marginal social benefit. 
E) the private demand curve for the good shifts to the right to coincide with the marginal social benefit curve.

Question 7

Exhibit 17.5
  
-Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The optimal level of air quality for a given rate of electricity production is found at _____

Accepted Answer

A)  point c. 
B)  point a. 
C)  point b. 
D)  A 
E)  A' 
A)  point c. 
B)  point a. 
C)  point b. 
D)  A 
E)  A'

Question 8

The world's worst nation in annual fossil-fuel carbon dioxide emissions per capita is _____

Accepted Answer

A) the United States. 
B) Germany. 
C) Japan. 
D) Qatar. 
E) Canada. 
A) the United States. 
B) Germany. 
C) Japan. 
D) Qatar. 
E) Canada.

Question 9

A meditation class meets on the second floor of a building.The first floor is a nightclub.The loud music from the club disturbs the classes.The club could be soundproofed for a cost of $5,000 or moved at a cost of $8,000.The classroom cannot be soundproofed enough to overcome the music,but the class can be moved at a cost of $4,000.According to the Coase theorem,_____

Accepted Answer

A) the club should be soundproofed so both businesses can stay open. 
B) the club should be soundproofed because it is the one generating the externality. 
C) the club should move rather than be soundproofed because eliminating an externality is better than compensating for it. 
D) the class should move because it can eliminate the externality at a lower cost than can the nightclub. 
E) whichever business has been there longer has a property right and the other should adjust. 
A) the club should be soundproofed so both businesses can stay open. 
B) the club should be soundproofed because it is the one generating the externality. 
C) the club should move rather than be soundproofed because eliminating an externality is better than compensating for it. 
D) the class should move because it can eliminate the externality at a lower cost than can the nightclub. 
E) whichever business has been there longer has a property right and the other should adjust.

Question 10

In Japan,recycling is prevalent and landfill use is relatively smaller than the United States because _____

Accepted Answer

A) the technology for landfills is less developed in Japan. 
B) the problem of externality is not present in Japan. 
C) land is relatively more scarce in Japan. 
D) Japan is an agrarian economy. 
E) littering is illegal there. 
A) the technology for landfills is less developed in Japan. 
B) the problem of externality is not present in Japan. 
C) land is relatively more scarce in Japan. 
D) Japan is an agrarian economy. 
E) littering is illegal there.

Question 11

In the absence of government intervention,the marginal social cost of pollution abatement would equal its marginal social benefit.

Accepted Answer

A) True 
 B)False

Question 12

Fish in the ocean are _____

Accepted Answer

A) exhaustible and also open-access resources. 
B) renewable and also open-access resources. 
C) private goods. 
D) merit goods. 
E) renewable resources whenever property rights are well defined. 
A) exhaustible and also open-access resources. 
B) renewable and also open-access resources. 
C) private goods. 
D) merit goods. 
E) renewable resources whenever property rights are well defined.

Question 13

The Clean Air Act of 1970 has _____

Accepted Answer

A) been ineffective at reducing lead emissions in automobiles. 
B) actually caused an increase in auto emissions. 
C) been fairly successful in reducing auto emissions, especially lead. 
D) been unsuccessful in reducing auto emissions, especially sulfur oxides. 
E) been ineffective at reducing carbon monoxide emissions. 
A) been ineffective at reducing lead emissions in automobiles. 
B) actually caused an increase in auto emissions. 
C) been fairly successful in reducing auto emissions, especially lead. 
D) been unsuccessful in reducing auto emissions, especially sulfur oxides. 
E) been ineffective at reducing carbon monoxide emissions.

Question 14

Exhibit 17.2
  
-Refer to Exhibit 17.2,which shows market equilibrium in the presence of an externality in an economy.The socially efficient level of output is _____

Accepted Answer

A) 0 units. 
B) 100 units. 
C) between 0 and 100 units. 
D) 160 units. 
E) between 100 and 160 units. 
A) 0 units. 
B) 100 units. 
C) between 0 and 100 units. 
D) 160 units. 
E) between 100 and 160 units.

Question 15

If education creates positive externalities,then _____

Accepted Answer

A) private markets provide a quantity of education that is less than socially optimal. 
B) private markets provide a quantity of education that is more than socially optimal. 
C) the marginal private benefit curve is higher than the marginal social benefit curve. 
D) the marginal private cost curve is higher than the marginal social cost curve. 
E) the government should impose a depletion tax. 
A) private markets provide a quantity of education that is less than socially optimal. 
B) private markets provide a quantity of education that is more than socially optimal. 
C) the marginal private benefit curve is higher than the marginal social benefit curve. 
D) the marginal private cost curve is higher than the marginal social cost curve. 
E) the government should impose a depletion tax.

Question 16

The depletion of rainforests due to human activities like logging or cattle ranching is an example of _____

Accepted Answer

A) a negative externality. 
B) a positive externality. 
C) adverse selection. 
D) moral hazard. 
E) arbitrage. 
A) a negative externality. 
B) a positive externality. 
C) adverse selection. 
D) moral hazard. 
E) arbitrage.

Question 17

Exhibit 17.4
  
-Refer to Exhibit 17.4,which shows the market for pollution rights in an economy.The optimal level of air quality is ______

Accepted Answer

A) 0. 
B) 40. 
C) 50. 
D) 70. 
E) greater than 70. 
A) 0. 
B) 40. 
C) 50. 
D) 70. 
E) greater than 70.

Question 18

Private property rights are defined and enforced _____

Accepted Answer

A) only in a capitalist economy. 
B) only in a command economy. 
C) by the largest firm in an economy. 
D) by the market forces of demand and supply. 
E) by the government, by informal social actions, and by ethical norms. 
A) only in a capitalist economy. 
B) only in a command economy. 
C) by the largest firm in an economy. 
D) by the market forces of demand and supply. 
E) by the government, by informal social actions, and by ethical norms.

Question 19

Pollution occurs because property rights to some open-access resources are well defined.

Accepted Answer

A) True 
 B)False

Question 20

Exhibit 17.1
  
-Refer to Exhibit 17.1,which shows a market for electricity.The marginal private cost of production just equals the marginal benefit enjoyed by consumers of electricity at _____

Accepted Answer

A)  point a. 
B)  point b. 
C)  point c. 
D)  point d. 
E)  demand curve D. 
A)  point a. 
B)  point b. 
C)  point c. 
D)  point d. 
E)  demand curve D.

Most water pollution in the United States comes from manufacturing sites.

If farmers decide individually whether or not to vaccinate their cattle against mad cow disease,which of the following is true?

Markets can allocate resources efficiently only as long as _____

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The marginal social cost is found at _____

At the market output and price for a good whose production causes pollution,_____

If consuming a good creates a positive externality,_____

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The optimal level of air quality for a given rate of electricity production is found at _____

The world's worst nation in annual fossil-fuel carbon dioxide emissions per capita is _____

In Japan,recycling is prevalent and landfill use is relatively smaller than the United States because _____

In the absence of government intervention,the marginal social cost of pollution abatement would equal its marginal social benefit.

Fish in the ocean are _____

The Clean Air Act of 1970 has _____

Exhibit 17.2 -Refer to Exhibit 17.2,which shows market equilibrium in the presence of an externality in an economy.The socially efficient level of output is _____

If education creates positive externalities,then _____

The depletion of rainforests due to human activities like logging or cattle ranching is an example of _____

Exhibit 17.4 -Refer to Exhibit 17.4,which shows the market for pollution rights in an economy.The optimal level of air quality is ______

Private property rights are defined and enforced _____

Pollution occurs because property rights to some open-access resources are well defined.

Exhibit 17.1 -Refer to Exhibit 17.1,which shows a market for electricity.The marginal private cost of production just equals the marginal benefit enjoyed by consumers of electricity at _____

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

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Economic Development

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Exam 17: Externalities and the Environment

Most water pollution in the United States comes from manufacturing sites.

If farmers decide individually whether or not to vaccinate their cattle against mad cow disease,which of the following is true?

Markets can allocate resources efficiently only as long as _____

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The marginal social cost is found at _____

At the market output and price for a good whose production causes pollution,_____

If consuming a good creates a positive externality,_____

Exhibit 17.5 -Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.The optimal level of air quality for a given rate of electricity production is found at _____

The world's worst nation in annual fossil-fuel carbon dioxide emissions per capita is _____

In Japan,recycling is prevalent and landfill use is relatively smaller than the United States because _____

In the absence of government intervention,the marginal social cost of pollution abatement would equal its marginal social benefit.

Fish in the ocean are _____

The Clean Air Act of 1970 has _____

Exhibit 17.2 -Refer to Exhibit 17.2,which shows market equilibrium in the presence of an externality in an economy.The socially efficient level of output is _____

If education creates positive externalities,then _____

The depletion of rainforests due to human activities like logging or cattle ranching is an example of _____

Exhibit 17.4 -Refer to Exhibit 17.4,which shows the market for pollution rights in an economy.The optimal level of air quality is ______

Private property rights are defined and enforced _____

Pollution occurs because property rights to some open-access resources are well defined.

Exhibit 17.1 -Refer to Exhibit 17.1,which shows a market for electricity.The marginal private cost of production just equals the marginal benefit enjoyed by consumers of electricity at _____

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