18. a. b. C. d. Externalities can be enhanced // market internalized // market internalized // government externalized // government by collective (i.e.) action.
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- Externalities can be ________ by collective (i.e.) ________ action. a. enhanced // market b. internalized // market c. internalized // government d. externalized // governmentA negative externality means the quantity in the market is _____ the allocatively efficient quanitity and can be corrected by a _____. A positive externality means the quantity in the market is _____ the allocatively efficient quantity and can be corrected by a ______. Word Bank: Larger than, tax, smaller than, subsidy, smaller than, equal to, subsidy, larger than, equal to, tax.The marginal cost of educating a college student is $2,000 a year. The table shows the marginal benefit schedule of a college education. The marginal external benefit of a college education is a constant $1,000 per student per year. There are no public colleges. If the government subsidizes colleges and sets the subsidy so that the efficient number of students enroll, what is the subsidy per student, how many students enroll, and what is the cost to taxpayers? The subsidy is $ per student and million students enroll. Students (millions per year) 1 2 3 4 5 6 7 8 8 Marginal benefit (dollars per student per year) 5,000 3,000 2,000 1,500 1,200 1,000 800 500
- By imposing a tax on the production of electricity equal to the cost of acid rain, the government will cause electric utilities to internalize the externality. As a consequence, the cost of the acid rain will become a OA. social cost borne by the public, and the demand curve for electricity will shift down. OB. social cost borne by the public, and the demand curve for electricity will shift up. C. private cost borne by the utilities, and the supply curve for electricity will shift down. D. private cost borne by the utilities, and the supply curve for electricity will shift up. Question ViewerThe following question refers to the diagram below, which illustrates the marginal private cost, marginal social cost, and marginal social benefits for a goods whose production results in a negative externality. Which area represents the deadweight loss due to the externality? A j. Bh. C h+j. D There is no deadweight loss. $ g MSC MPC k m MSB Q2 Q1The graph depicts the market for a good that creates a negative externality. Move the triangle labeled "DWL" to illustrate the deadweight loss associated with the market equilibrium quantity. Supply (social) DWL Supply (internal) Demand Quantity Price
- in the case of negative externalities ......... exceeds......... which leads to ........ by the market - private cost, social cost, underproduction - social cost, private cost, underproduction - social cost, private cost, overproduction - private cost, social cost, overproduuctionWith this type of externality, in the absence of government intervention, the market equilibrium quantity produced will be than the socially optimal quantity. Which of the following generate the type of externality previously described? Check all that apply. Your roommate Crystal has bought a puppy that barks all day while you are trying to study economics. Tim has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season. A microbiology lab has published its breakthrough in swine flu research. The local airport has doubled the number of runways, causing additional noise pollution for the surrounding residents.What is the definition of an externality? Click or tap a choice to answer the question. a cost or benefit of market activity to an outside party influence on market activity by an outside party any cost associated with a market activity any benefit associated with a market activit
- The graph below depicts a market with a positive externality. Market Price P₁ Q₁ Q₂ O Q2 O Q1 OP1 OP2 Quantity D₁ S D₂ Which label shows the quantity that reflects both the external and private benefits of consumption (social demand)?Suppose the hot sauce firm cannot reduce the externality without reducing costs. What is a possible next step the government could take to reduce it? Select all that apply. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Tax the firm for each bottle of hot sauce produced. a b C d e Create a limit on the maximum number of bottles the firm can make. Subsidizing each bottle of hot sauce made. Not allowing consumers to buy hot sauce. Forcing the firm to install equipment to reduce the amount of pollution generated. Answered Incorrect 1 attempt left ResubmitJohn loves playing country music at high volume. Mike loves opera but hates country music. Unfortunately, they are next-door neighbors in an apartment building with paper-thin walls. a. What is the negative externality in this situation? b. What command-and-control policy might the landlord impose? c. Could a command-and-control policy cause an inefficient outcome?d. Suppose the landlord lets the tenants do whatever they want. Using the Coase theorem, how might John and Mike reach an efficient outcome on their own?
