Exam 15: Externalities, Environmental Policy and Public Goods

Figure 15-6 Figure 15-6 shows the market for measles vaccinations,a product whose use generates positive externalities. -Refer to Figure 15-6.What does D₁ represent?

A public good is

Figure 15-2 Figure 15-2 shows a market with a negative externality. -Refer to Figure 15-2.The size of marginal external costs can be determined by

The demand curve for a public good is also called the

How does a negative externality in production reduce economic efficiency?

In England during the Middle Ages each village had an area of pasture on which any family in the village was allowed to graze its cows and sheep without charge.Eventually,the grass in the pasture would be depleted and no family's cow or sheep would get enough to eat.The reason the grass was depleted was

The basic cause of deadweight losses from the existence of common resources and externalities is

When there is a negative externality,the private cost of production ________ the social cost of production.

Because producers do not bear the external cost of pollution,

Which of the following displays these two characteristics: non-rivalry and excludability?

A negative externality is an example of market failure.The root of the problem lies in the definition and enforcement of property rights.Explain.

If the marginal benefit of reducing emissions of some air pollutant is greater than the marginal cost,

If the social benefit of consuming a good or a service exceeds the private benefit,

When a tax on output is imposed to internalise the external costs of pollution,the supply curve shifts down by the amount of the tax.

Ronald Coase was awarded the 1991 Nobel Prize in Economics primarily for addressing problems related to externalities.Which of the following describes Coase's work?

Classifying a good as rival means

Figure 15-6 Figure 15-6 shows the market for measles vaccinations,a product whose use generates positive externalities. -Refer to Figure 15-6.Why is there a deadweight loss?

Mandatory motorcycle helmet laws are designed to reduce the severity of injuries resulting from motorcycle involvement in traffic accidents.In this sense,these mandatory helmet laws are reducing ________ of risky behaviour.

A product is considered to be non-excludable if

Explain how the decision by parents to not immunise their children,hoping that their children will not get sick because other parents have had their children immunised,is an example of free riding.How is this behaviour dangerous to the public?