Chapter 13
Which of the following statements describes an observed long-term trend?
Economic growth is accompanied by more efficient use of scarce resources
Which economist proposed that resources can be managed by users rather than governments?
Elinor Ostrom
______ are examples of market failure caused by "spillovers" or unintended by-products of a market transaction.
Externalities
Other things equal, an increase in the marginal benefits from abatement should:
cause a reduction in pollution.
Government requirements that automobile companies improve gasoline mileage every year is an example of:
command and control policies.
The tragedy of the commons is MOST associated with:
common property resources.
Inoculations for children against infectious diseases:
create an external benefit.
One criticism regarding actions to combat climate change is that _____ countries desire that more efforts be taken, while _____ countries focus more on economic growth.
developed; developing
One of the difficulties of creating an economic analysis of greenhouse gases is that:
global warming is a cumulative process
A _____ discount rate means the value today of a future payoff will be _____.
higher; less
In general, air pollution is ____, and greenhouse gases are _____.
localized; unlocalized
Combating emissions that lead to global warming differs from other types of pollution abatement because the process of combating global warming is:
long run and cumulative
If an entrepreneur opens an adult day care center that produces positive externalities, the equilibrium quantity of day care that is produced will be:
lower than socially optimal.
Global warming is an example of:
market failure
One of the major difficulties in determining the costs and benefits of big public projects is:
measuring the nonmarket aspects of the projects
The live band nearby makes it difficult for patrons of a restaurant to hold a conversation. This is an example of:
negative externality
Carbon dioxide emissions are considered to be a negative public good because:
nobody can have less of them because somebody else has more; and nobody can be excluded from their destructive consequences
An over-the-air radio station that plays music for free is a(n) ____ good, while a streaming radio service that charges a subscription fee is a(n) _____ good.
nonexcludable; excludable
A news website that can be accessed by many paid subscribers simultaneously is MOST likely:
nonrival and excludable.
Externalities are the impacts:
on third parties.
An advantage of tradable permits over command and control policies is that:
policy makers do not need to know abatement costs to produce an optimal outcome
______ would be MOST likely to have a free rider problem.
public tv
When positive externalities are present, the social demand curve lies to the _______ of the private demand curve and the private market _________________ the good.
right; underproduces
A physical DVD disc is a(n) ____ good, while a streaming video that can be used by multiple paying users is _____
rival; nonrival
Sales are down this month at Dusty's Smoke House. It is a competitive firm with fixed costs of $3,000, variable costs of $500, and sales revenue is equal to $5,000. A new government regulation requires that it install a new dust collector. This requires a monthly cost of $2,000 to maintain. Dusty should
shut down
If marginal abatement costs are lower than the marginal damage caused by pollution:
society would be better off if emissions were reduced.
Which of the following is both finite and nonrenewable?
soil
All of the following are considered private goods, EXCEPT:
street lights.
Government will likely have to bear the financial burden of climate change because:
technology is the solution to global warming and technology is a public good
The Patagonian toothfish is an example of:
the tragedy of the commons.
When negative externalities exist, an unregulated market will produce ______ of the good and the price will be ______ when compared to the socially optimal production.
too much; too low
Which of the following is NOT a market-based environmental policy approach?
vehicle fuel economy standards
The socially optimal pollution is:
where the marginal benefits of pollution abatement equal its marginal costs
Market demand for public goods is sometimes better referred to as the:
willingness to pay curve.