BUSA exam 2 set 5

private costs of an action are less

For a negative externality, the ______________ than the costs imposed on society as a whole.

have less incentive to innovate to the extent that the whole of society desires.

If a firm's efforts to be technologically innovative will create a positive externality, then that firm will likely

nonrivalrous and nonexcludable

If the maintenance fees for a lighthouse are paid in full each year by charging port fees, then the lighthouse is

provides more social benefits than it derives in private benefits.

Raven Farms raises a substantial number of bees and uses the honey to produce its own skin healing cream. Raven Farms is situated next to the Oakcreek Apple Orchard. The bees from Raven Farms pollinate Oakcreek's apple trees. In this instance, Raven Farms

rivalrous and nonexcludable

There is a skating rink in your city that is open to anybody to use at any time. They even provide skates for people who don't own any. This is an example of a good that is

nonexcludable

When it is costly or impossible to exclude someone who hasn't paid to use a particular good from using it, then that good is classified as being

find ways to account for the social costs of the negative externality in economic decisions

Which of the following is the most appropriate response of public policy to a negative externality like pollution?