ECON CH. 10, 11, 12

The overuse of antibiotics leads to the development of antibiotic-resistant diseases. Therefore, the market for antibiotics is shown in

Graph (b) only

An externality is the uncompensated impact of

One person's actions on the well-being of a bystander

If this market is currently producing at Q4, then total economic well-being would be maximized if output...

decreased to Q2

Negative externalities lead markets to produce

greater then efficient output levels and positive externalities lead markets to produce smaller than efficient output levels

Dioxin emission that results from the production of paper is a good example of a negative externality because...

self-interested paper producers will no consider the full cost of the dioxin pollution they create

In some cases, tradable pollution permits may be better than a corrective tax because

the government can set a maximum level of pollution using permits

What is the socially optimal quantity output in this market?

12 units

This market is characterized by...

A negative externality

Which of the following statements about a well-maintains yard best conveys the general nature of the externality?

A well-maintained yard conveys a positive externality because it increases the value of adjacent properties in the neighborhood

Flu shots provide a positive externality. Suppose that the market for vaccinations is perfectly competitive. Without government intervention in the vaccination market, which of the following statements is correct?

At the current output level, the marginal social benefit exceeds the marginal private benefit