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- What is the expected economic impact of implementing strict environmental regulations on heavily polluting industries? A. It leads to increased short-term profitability for these industries. B. It generally causes operational costs to rise, potentially leading to higher prices for consumers. C. It significantly boosts employment in all sectors of the economy. D. It has no impact on the market behavior of affected industries.-0. Which of the following are examples of activities that yield external benefits? a. Your neighbor paints his house bright orange, pink, purple, black, red, and green. b. The person next to you in class is sick with the flu and keeps coughing toward you. c. Your neighbor blasts his stereo super loud from 3:00 a.m. to 5:00 am while he gets ready for work. d. All of the above are examples of activities that yield external benefits. e.. None of the above are examples of activities that yield external benefits. 1. Which of the following are examples of activities that yield external costs? a. Your neighbor paints his house bright orange, pink, purple, black, red, and green. b. The person next to you in class is sick with the flu and keeps coughing toward you. c. Your neighbor blasts his stereo super loud from 3:00 a.m. to 5:00 am while he gets ready for work. All of the above are examples of activities that yield external costs. d. e. None of the above are examples of activities that…Consider the decision to adopt a dog. Describe aprivate cost, a private benefit, an external cost, andan external benefit that result from your decisionto adopt a dog.
- A market with positive externalities will tend to _____ compared to a market producing the socially optimal output. Select one: a. produce the optimal quantity. b. produce too few c. produce too many d. randomly produce some quantity1) Which type of market failure does the following represent. a) Construction of a bowling alley in the center of a busy town. Choose one answer from list below. o Asymmetric information o Public good o Tragedy of commons o Positive externality o Adverse selection o Negative externalityPrice and cost (dollars per unit) Curve I Curve 2 Quantity (units per day) Which of the following statements is true? When producing D cans of paint, the distance CD represents the marginal cost. O When producing D cans of paint, the distance CD represents the marginal social cost. When producing L cans of paint, the distance AB represents the marginal external cost. Which of the following statements is true? When producing D cans of paint, the distance CD represents the marginal When producing D cans of paint, the distance CD represents the marginal cost. When producing D ca s of paint, the distance AB represents the margina external cost. Curve 2 represents the marginal external cost. None of the above.
- The following graph shows the externalities in the market of papers. Apparently, there are negative externalities in the production of paper. The Marginal External Cost is estimated to be a constant $10 for all quantities. MSC S- MPC 110 A 105 C 100 95 D E D= MSB 4.5 5 Tons of Paper per Year (Millions) LExplain how we can get the MSC. AWhich area is the efficiency loss it the market is not regulated! How imuch corrective tax should the government levy to restore etficiency in the market? w. Which area is the total revenue the government receives from the poilution tax? Price, Benefit, and Cost (Dollars)Figure 5-1 S2 Price P2 Demand Q2 Q Quantity Figure 5-1 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2. DEC tv 80 F3 DOO F4 F5 F6 F7 FB 2$ & 4. 7 6. * C0 5Which statement about a product with external costs must be correct? A. The consumption of the product has positive effects on third parties B. The private costs of its production exceed the social costs of its production. C. The production of the product has negative effects on third parties. D. The social costs of its production exceed the social benefits of its production.
- Consider the market for fire extinguishers. d. If the external benefit is $10 per extinguisher,describe a government policy that would yield theefficient outcome.Graphically, the effects of an external benefit can be shown as A. a leftward shift of the market demand curve. B. a leftward shift of the market supply curve. C. a downward movement along the market demand curve. D. a rightward shift of the market demand curve.When externalities cause markets to be inefficient (x) government action is sometimes needed to solve the problem. (y) private solutions can be developed to solve the problem. (z) there is a way to eliminate the problem of externalities in the market if producers are provided with the appropriate incentives to internalize the externality. Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (z) only
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