Question 1

When a negative externality exists, the private market produces

Accepted Answer

A)   more than the economically efficient output level.
B)   less than the economically efficient output level.
C)   products at a low opportunity cost.
D)   products at a high opportunity cost.

Question 2

The Coase theorem asserts that government intervention is a prerequisite for addressing externality problems.

Accepted Answer

A) True 
 B)False

Question 3

How does a public good differ from a quasi-public good? In your answer give an example of each type of good.

Accepted Answer

non-excludable-anyone can consume the go...

Question 4

d. B)  Qb. C)  Qa. D)  Qb - Qd." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 15-2. The efficient output level is

Accepted Answer

A)   Qd.
B)   Qb.
C)   Qa.
D)   Qb - Qd.

Question 5

Negative externalities and the tragedy of the commons are problems that have a common source. What is this common source?

Accepted Answer

A)   self-interest motives of producers and consumers
B)   a lack of concern for human rights
C)   a lack of competition
D)   a lack of clearly defined and enforced property rights

Question 6

If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set

Accepted Answer

A)   equal to the marginal external cost at the economically efficient level of pollution.
B)   equal to the marginal private cost of production at the economically efficient level of pollution.
C)   equal to the amount of the deadweight loss created in the absence of a pollution tax.
D)   at a level low enough so that producers can pass along a portion of the additional cost onto consumers without significantly reducing demand for the product.

Question 7

What is a private benefit from consumption? What is a social benefit from consumption? When is the private benefit from consumption equal to the social benefit from consumption?

Accepted Answer

Private benefit from consumption is the ...

Question 8

Classifying a good as excludable means

Accepted Answer

A)   that someone can be barred from consuming the good based on race, creed or some other irrelevant characteristic.
B)   that anyone who does not pay for the good cannot consume it.
C)   that consumption of the good causes no externalities.
D)   that a producer with patent or copyright protection can exclude any other producer from selling his product.

Question 9

Explain how mandatory seat belt laws may reduce the negative externalities of risky behaviour.

Accepted Answer

Mandatory seat belt laws are designed to...

Question 10

Policies that mandate the installation of specific pollution control devices are called

Accepted Answer

A)   command and control policies.
B)   benefit policies.
C)   welfare policies.
D)   incentive policies.

Question 11

Which of the following represents the true economic cost of production when firms produce goods that cause negative externalities?

Accepted Answer

A)   the private cost of production
B)   the social cost of production
C)   the external cost of production
D)   the explicit cost of production

Question 12

Economists argue that the level of pollution should be

Accepted Answer

A)   reduced completely to zero because by definition, it is a negative external effect.
B)   ignored because it has always been present since the beginning of history.
C)   reduced to the point where the marginal benefit of pollution reduction is equal to the marginal cost of pollution reduction to society.
D)   best determined by elected officials who can speak on behalf of the public.

Exam 15: Externalities , Environmental Policy and Public Goods

What is a private benefit from consumption? What is a social benefit from consumption? When is the private benefit from consumption equal to the social benefit from consumption?

Correct Answer
verified
Private benefit from consumption is the ...
View Answer

Policies that mandate the installation of specific pollution control devices are called

Correct Answer
verified

The Coase theorem asserts that government intervention is a prerequisite for addressing externality problems.

Correct Answer
verified

Classifying a good as excludable means

Correct Answer
verified

How does a public good differ from a quasi-public good? In your answer give an example of each type of good.

Correct Answer
verified
non-excludable-anyone can consume the go...
View Answer

Economists argue that the level of pollution should be

Correct Answer
verified

If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set

Correct Answer
verified

Negative externalities and the tragedy of the commons are problems that have a common source. What is this common source?

Correct Answer
verified

When a negative externality exists, the private market produces

Correct Answer
verified

Explain how mandatory seat belt laws may reduce the negative externalities of risky behaviour.

Correct Answer
verified
Mandatory seat belt laws are designed to...
View Answer

Which of the following represents the true economic cost of production when firms produce goods that cause negative externalities?

Correct Answer
verified

-Refer to Figure 15-2. The efficient output level is

Correct Answer
verified

Exam 15: Externalities , Environmental Policy and Public Goods

What is a private benefit from consumption? What is a social benefit from consumption? When is the private benefit from consumption equal to the social benefit from consumption?

Correct AnswerverifiedPrivate benefit from consumption is the ...View AnswerShow Answer

Policies that mandate the installation of specific pollution control devices are called

Correct AnswerverifiedShow Answer

The Coase theorem asserts that government intervention is a prerequisite for addressing externality problems.

Correct AnswerverifiedShow Answer

Classifying a good as excludable means

Correct AnswerverifiedShow Answer

How does a public good differ from a quasi-public good? In your answer give an example of each type of good.

Correct Answerverifiednon-excludable-anyone can consume the go...View AnswerShow Answer

Economists argue that the level of pollution should be

Correct AnswerverifiedShow Answer

If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set

Correct AnswerverifiedShow Answer

Negative externalities and the tragedy of the commons are problems that have a common source. What is this common source?

Correct AnswerverifiedShow Answer

When a negative externality exists, the private market produces

Correct AnswerverifiedShow Answer

Explain how mandatory seat belt laws may reduce the negative externalities of risky behaviour.

Correct AnswerverifiedMandatory seat belt laws are designed to...View AnswerShow Answer

Which of the following represents the true economic cost of production when firms produce goods that cause negative externalities?

Correct AnswerverifiedShow Answer

-Refer to Figure 15-2. The efficient output level is

Correct AnswerverifiedShow Answer

Correct Answer
verified
Private benefit from consumption is the ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
non-excludable-anyone can consume the go...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Mandatory seat belt laws are designed to...
View Answer

Correct Answer
verified

Correct Answer
verified