FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Externalities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 171

Multiple Choice

Review LaterAdd Note

Review Later

Suppose that a steel factory emits a certain amount of air pollution, which constitutes a negative externality. If the market does not internalize the externality,

A) the supply curve would adequately reflect the marginal social cost of production.
B) consumers will be required to pay a higher price for steel than they would have if the externality were internalized.
C) the market equilibrium quantity will not be the socially optimal quantity.
D) producers will produce less steel than they otherwise would if the externality were internalized.

E) None of the above
F) A) and D)

Correct Answer

verified

Show Answer

Question 172

Multiple Choice

Review LaterAdd Note

Review Later

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. Multiple Choice - Section 02: Public Policies toward Externalities -Refer to Figure 10-13. If 250 units of plastics are produced and consumed, then the

A) social optimum has been reached.
B) market equilibrium has been reached.
C) negative externality associated with plastics has been eliminated.
D) positive externality associated with plastics has been eliminated.

E) B) and C)
F) A) and D)

Correct Answer

verified

Show Answer

Question 173

Multiple Choice

Review LaterAdd Note

Figure 10-11 -Refer to Figure 10-11. Which of the following magnitudes is constant over all units of output?

Table 10-6 The following table shows the total costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $46, and for Firm A to eliminate two units of pollution, it would cost a total of $103. -Refer to Table 10-6. Suppose the government wanted to reduce pollution from 16 units to exactly 6 units. Which one of the following fees per unit of pollution would achieve that goal?

Government intervention in the economy with the goal of promoting technology-producing industries is known as patent policy.

Scenario 10-4 The demand curve for fire extinguishers slopes downward and the supply curve for fire extinguishers slopes upward. The production of the 500^th fire extinguisher entails the following: -a private cost of $10; -an external cost of $0; -a private value of $9; -an external benefit of $3. - -Refer to Scenario 10-4. Does the production of fire extinguishers convey a positive externality, a negative externality, or neither?

The concept of external cost is associated with a negative externality, but not with a positive externality.

Cameron lives in an apartment building and gets a $700 benefit from playing his stereo. Renee, who lives next door to Cameron and often loses sleep due to the music coming from Cameron's stereo, bears a $1,000 cost from the noise. At which of the following offers from Renee could both Renee and Cameron benefit from the silencing of Cameron's stereo?

A positive externality occurs when

The business activities of Firm A confer positive externalities on Firm B, and the business activities of Firm B confer positive externalities on Firm A. If the two firms merged, then

A local manufacturing plant that emitted sulfur dioxide was forced to stop production because it did not comply with local clean air standards. This decision provides an example of

Table 10-3 -Refer to Table 10-3. The table represents a market in which

Briefly explain how research into new technologies gives rise to a positive externality.

Which of the following is the most effective way to internalize a technology spillover?

Scenario 10-1 The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000^th gallon of gasoline entails the following: -a private cost of $3.10; -a social cost of $3.55; -a value to consumers of $3.70. -Refer to Scenario 10-1. From the given information, it is apparent that

What are the three externalities that are associated with driving cars and trucks?

When we identify public policies toward externalities, we contrast command-and-control policies with what other type of policies?

Suppose that candy producers create a positive externality equal to $1 per pound of candy. Further suppose that the government offers a $1-per-pound subsidy to the producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of candy?

Does research into new technologies create a positive externality or does it create a negative externality?

Since externalities tend to keep markets from reaching a socially optimal equilibrium, government action