Microeconomics Final

Suppose that a pollution permit costs $1,000 per ton of pollution emitted and firms must have a permit for every ton of pollution that they emit domestically. A manufacturing firm is considering its pollution reduction strategy and deciding between the following three options: It can continue its current operations and emit 150 tons of emissions. It can submit a project proposal for pollution abatement equipment which will cost $75,000, but reduce the amount of pollution down to 50 tons. It can move production to a foreign country with no pollution regulations, which will cost $70,000 in moving expenses and an additional $50,000 to set up in the new country. What is the cost of the firm's best option?

$120,000

Four firms called Elm, Maple, Oak, and Cherry, produce wooden chairs. However, they also produce a great deal of garbage in mixture of glue, varnish, sandpaper, and wood scraps). The first row of the table below shows the total amount of garbage (in tons) that each firm currently produces. The other rows of the table show the cost of reducing garbage produced by the first five tons, the second five tons, and so on. GRAPH: 4:47pm Calculate the cost of requiring the Maple firm to reduce the weight of its garbage by one-fourth. Please format your answer as the numbers appear in the table (e.g. $7,000).

$13,500 ($6,300+$7,200)

Four firms called Elm, Maple, Oak, and Cherry, produce wooden chairs. However, they also produce a great deal of garbage (a mixture of glue, varnish, sandpaper, and wood scraps). The first row of the table below shows the total amount of garbage (in tons) that each firm currently produces. The other rows of the table show the cost of reducing garbage produced by the first five tons, the second five tons, and so on. Calculate the cost of requiring the Cherry firm to reduce the weight of its garbage by one-fourth. GRAPH PICTURE : 4:23PM

$18,000 Cherry's current production of garbage is 80 tons. If each firm is required to reduce its garbage output by one-fourth, then Cherry will reduce 20tons (1/4 of 80) at a cost of $18,000. The cost of Cherry reducing garbage by first five tons $3,000, the cost of Cherry reducing garbage by a second five tons is $4,000, the cost of Cherry reducing garbage by a third five tons is $5,000, and the cost of Cherry reducing garbage by a fourth five tons is $6,000. $3,000+$4,000+5,000+$6,000=$18,000

In the graph below, the solid blue line represents the marginal cost of reducing particle emissions (measured in pounds) for a firm. The dashed line represents a newly imposed pollution charge of $320 for every pound of pollution emitted. Suppose a firm refuses to reduce its quantity of pollution regardless of any tax imposed. What will be the total tax paid by the firm if the firm chooses to emit 60 pounds of particle emissions? graph photo @6:42

$19,200

Four firms called Elm, Maple, Oak, and Cherry, produce wooden chairs. However, they also produce a great deal of garbage (a mixture of glue, varnish, sandpaper, and wood scraps). The first row of the table below shows the total amount of garbage (in tons) that each firm currently produces. The other rows of the table show the cost of reducing garbage produced by the first five tons, the second five tons, and so on. Calculate the cost of requiring the Oak firm to reduce the weight of its garbage by one-fourth. Please format your answer as the numbers appear in the table (e.g. $7,000).

$22,500 Oak's current production of garbage is 60 tons. If each firm is required to reduce its garbage output by one-fourth, then Oak will reduce 15 tons (1/4of 60) at a cost of $22,500. The cost of Oak reducing garbage by first five tons $7,200, the cost of Oak reducing garbage by a second five tons is $7,500, and the cost of Oak reducing garbage by a third five tons is $7,800. $7,200+$7,500+$7,800=$22,500

A manufacturing firm has a marketable permit that currently allows for 175 tons of emissions. However, the marketable permit is shrinkable and the firm will only be allowed 150 tons of emissions next year. The manufacturing firm projects that its actual emissions next year will be 160 tons. It is the best interest of the manufacturing firm to purchase permits allowing for _______ tons of emissions for next year.

10 160-150= 10 Reason: Because the manufacturing firm is projecting 160 tons of emissions and their current permit will only allow for 150 tons of emissions, they will need to purchase permits for 10 tons of emissions.

In the graph below, the solid green line represents the marginal cost of reducing particle emissions (measured in pounds) for a firm. The dashed line represents a newly imposed pollution charge of $470 for every pound of pollution emitted. Suppose the firm is currently emitting more than 50 pounds of particle emissions and must decide how to respond to the pollution charge. (Assume that particle emissions can only be reduced in multiples of eight pounds.) By how many pounds will the firm choose to reduce its pollution? Graph photo taken @4:50pm

16 particle emissions

In the graph below, the solid green line represents the marginal cost of reducing particle emissions (measured in pounds) for a firm. The dashed line represents a newly imposed pollution charge of $480 for every pound of pollution emitted. Suppose the firm is currently emitting more than 50 pounds of particle emissions and must decide how to respond to the pollution charge. (Assume that particle emissions can only be reduced in multiples of eight pounds.) By how many pounds will the firm choose to reduce its total particle emissions?

16 particle emissions (pounds) photo of graph: 4:21pm

In the graph below, the solid red line represents the marginal cost of reducing particle emissions (measured in pounds) for a firm. The dashed line represents a newly imposed pollution charge of $720 for every pound of pollution emitted. Suppose the firm is currently emitting more than 30 pounds of particle emissions and must decide how to respond to the pollution charge. (Assume that particle emissions can only be reduced in multiples of five pounds.) By how many pounds will the firm choose to reduce its pollution? Graph picture: 4:35pm

25 particle emissions

A manufacturing firm has a marketable permit that currently allows for 300 tons of emissions. However, the marketable permit is shrinkable and the firm will only be allowed 200 tons of emissions next year. The manufacturing firm projects that it's actual emissions next year will be 230 tons. It is the best interest of the manufacturing firm to purchase permits allowing for _______ tons of emissions.

30

In the graph below, the solid blue line represents the marginal cost of reducing particle emissions (measured in pounds) for a firm. The dashed line represents a newly imposed pollution charge of $120 for every pound of pollution emitted. By how many pounds will the firm choose to reduce its pollution? Graph photo taken @4:57pm

30 particles

An approach to environmental regulation which specifies allowable quantities of pollution and/or details which pollution-control technologies must be used is called a ___________________. A. command-and-control regulation B. integration regulation C. market driven regulation D. private regulation

A

Below is a production possibility frontier (PPF) showing the tradeoff a nation faces between economic output and environmental protection. At what choice is a nation choosing the highest level of economic output with little environmental protection? GRAPH PHOTO taken: 5:26pm

A

Below is a production possibility frontier (PPF) showing the tradeoff a nation faces between economic output and environmental protection. At what point would a nation with low per capita gross domestic product (GDP) likely choose to produce? A. A B. E C. F D. G GRAPH Photo taken at 5:34pm

A

Consider a scenario where an endangered species is discovered on property you own and which you had been considering building houses on. While you are sensitive to endangered species, you have money invested in the land and you want to keep it. If an incentive-based approach to a solution is desired, what is the best way to solve this problem? A. The government should pay you, the landowner, to provide and maintain a suitable habitat for endangered species. B. The government should prohibit you, the landowner, from using your land for any purpose that might disturb the endangered species discovered there. C. You, the landowner, should deliberately cut trees to discourage endangered species from locating there so that you can continue using the land as you please. D. You, the landowner, should eliminate the endangered species found on your land and not inform the government of the discovery.

A

In which of the following situations would a patent not be appropriate? A. a new way of training employees B. a new pharmaceutical drug C. a new way to package cereal D. a new pen that scans as you write

A

Jennifer is a serious student who works on schoolwork each evening. She has a roommate who likes to party and frequently hosts noisy get-togethers in their shared apartment without warning. Which of the following might be a likely outcome of this living situation? A. Jennifer will experience negative externalities. B. Jennifer will experience positive externalities. C. Jennifer's roommate will experience positive externalities from living with Jennifer. D. This scenario has nothing to do with externalities.

A

On the chart below the environment case for the Jones company can be observed. The dotted line demonstrates a broad gap between investment (MC) in reducing pollution and the benefit gained (MB) by the investment. What scenario does this illustrate, as it relates to the marginal cost of reducing pollution? Graph @ 6:45pm A. A broad separation between marginal cost and marginal benefit curves indicates that there are cheap and easy ways to reduce pollution available. Meaning the marginal benefits of doing so is high. So, allocating resources to fight pollution is wise. B. Because the gap between marginal benefits and marginal costs in narrowing, at this point it may become more important to use market-oriented environmental tools to hold down the costs of reducing pollution. C. At this point, the marginal costs exceed the marginal benefits, which means society is not allocating resources efficiently because it is forfeiting too many resources to reduce pollution. D. Reducing pollution is always good for the earth, and should always be done.

A

Property rights are an important component of any system intended to minimize negative externalities because they establish ________________, obligating the responsible party to seek out and pay for the least costly method of reducing the risk or impact of negative effects. A. legal responsibility B. legal requirement C. moral obligation D. legal action

A

Which of the following best describes the Paris Climate Agreement passed in 2016? A. an international climate agreement where participating countries from around the world commit to significantly limiting CO2 emissions B. a climate agreement within the European Union only, that pledges to limit CO2 emissions C. an international externality D. climate agreement intended to promote biodiversity

A

Which of the following statements about government spending on research is true? A. Government spending can sometimes be directed more for political reasons than scientific reasons. B. Government spending on research and development doesn't tend to produce technology that becomes broadly available for firms to use. C. Over time, the U.S. economy has come to rely much more heavily on government-funded research and development rather than industry-driven research and development. D. Government-funded research and development is by far the largest source of spending on research and development in the U.S.

A

What was the Sarbanes-Oxley Act in 2002 designed to do? A. increase confidence in financial information provided by public corporations to protect investors from accounting fraud B. address oppressive business practices associated with cartels and oppressive monopolies C. provide further clarification to the Sherman Antitrust Act on topics such as price discrimination, price fixing, and unfair business practices D. create a commission to help regulate unfair methods of competition in commerce and define what types of competition were legally unfair

A. Reason: Brought on by a number of major accounting scandals, the Sarbanes-Oxley Act in 2002 was designed to increase confidence in financial information provided by public corporations to protect investors from accounting fraud.

The graph below shows the marginal costs and marginal benefits of environmental protection. Suppose that a society is choosing among the four levels of environmental protection indicated by the dashed vertical lines. Among these four options, is it true that Strategy 1 would be the society's most efficient allocation of resources? A. No, Strategy 1 would not be the society's most efficient allocation of resources. B. Yes, Strategy 1 would be the society's most efficient allocation of resources.

A. No, Strategy 1 would not be the society's most efficient allocation of resources.

A community's marginal costs and marginal benefits of environmental protection are depicted in the graph below. The community has been making an effort to recycle its garbage, and its current level of environmental protection is indicated by the dashed green line. Consider that you are a consultant who has been hired to analyze the community's recycling efforts. Based on the information provided, would you recommend they invest more in environmental protection? GRAPH PICTURE @5:10pm A. The community should invest more in environmental protection B. The community should invest less in environmental protection C. The community is investing the optimal amount of resources in environmental protection.

A. The community should invest more in environmental protection

It is illegal for the manufacturer to demand _________________________, which would require the dealers to sell for at least a certain minimum price. A. a minimum resale price agreement B. predatory pricing C. an exclusive deal D. the bundling of sales

A. a minimum resale price agreement

Which of the following is considered to be a negative externality? A. community health issues due to toxic waste disposal B. less garbage due to community recycling programs C. people losing weight due to choosing to walk instead of drive D. people saving more money due to eating at home more often

A. community health issues due to toxic waste disposal

Which of the following best defines international externalities? A. externalities that cross national borders and that a single nation acting alone cannot resolve B. externalities that cross national borders and that a single nation alone can resolve C. externalities that a nation experiences within its own borders while receiving aid from another nation D. command-and-control legislation that affects more than one nation

A. externalities that cross national borders and that a single nation acting alone cannot resolve

Which of the following best describes property rights? A. the legal rights of ownership on which others are not allowed to infringe without paying compensation B. a tax imposed on the quantity of pollution that a firm emits C. the legally guaranteed ownership of an idea, rather than a physical item D. a permit that allows a firm to emit a certain amount of pollution

A. the legal rights of ownership on which others are not allowed to infringe without paying compensation

Below is a graph that illustrates the social costs of producing refrigerators. As a by-product of the metals, plastics, chemicals, and energy that refrigerator manufacturers use, some pollution is created. These pollutants create costs of $100 per refrigerator produced. In order to achieve market equilibrium after taking the additional external costs of pollution into account, the new equilibrium would be at a price of _______ per refrigerator and a quantity of _________. A.$700; 40,000 B. $650; 45,000 C. $600; 40,000 D. $750; 45,000

A.$700; 40,000 photo taken: 4:03pm

As the wealth of economically advanced nations has increased, the phenomenon of ecotourism has emerged, where the beauty of unspoiled or particularly beautiful lands acquire a value because tourists will travel to them and pay large sums of money to appreciate them. All of the following statements about ecotourism are true, except: A. Ecotourism needs careful management. B. Ecotourism implies that it is more lucrative for low-income countries to cut down forests rather than preserve wildlife habitats. C. The definition of ecotourism is a little vague. D. Ecotourism is a big and growing business.

B

Despite being designed to protect innovators, patents are not perfect and tend to fall short of this aim. Which of the following statements offers a description of a way in which patents fail to protect innovators? A. Patents guarantee the innovator an exclusive right to a new product or process. B. Even with a patent system in place, inventors typically receive only a fraction of the total economic value of their inventions. C. Patents are not legally recognized, so they cannot be enforced.

B

When a market successfully understands a negative externality like pollution, and assigns costs in a way that they are reflected in the market price, the market is said to be ________________________. A. avoiding externalities B. allocating resources efficiently C. remaining outside the transaction D. incurring costs outside the production process

B

When the regulator sets a price that a firm cannot exceed over the next few years, the regulator is enforcing A. regulatory capture rules. B. price cap regulation. C. deregulation. D. cost-plus regulation.

B. Price cap regulation

Which of the following is considered to be one of the shortcomings of command-and-control regulations? A. They can specify what type of pollution-control technologies must be used. B. They often have politically motivated loopholes. C. They specify how much pollution can be emitted. D. They provide incentives for a firm to go beyond the pollution limits set by the government.

B. They often have politically motivated loopholes.

Market failure describes a situation in which the market itself ______________________ in a way that balances social costs and benefits. A. avoids externalities B. fails to allocate resources efficiently C. remains outside the transaction D. incurs the costs outside the production process

B. fails to allocate resources efficiently

Price cap regulation would likely be deemed successful in which of the following instances: A. if regulators set the price cap unrealistically low B. if the firm finds a way to reduce its costs more quickly than the price caps C. the market changes dramatically and the firm experiences loss D. the firm can't keep up with the price caps

B. if the firm finds a way to reduce its costs more quickly than the price caps Price cap regulation refers to government regulation of a firm where the government sets a price level several years in advance. If a firm is able to find a way to reduce its costs more quickly than the price caps, then price cap regulation will likely be successful.

Rather than arguing over whether the ultimate goal is zero pollution or a reasonable level of pollution, a society's immediate focus should be to tackle the environmental issues where the _____________________ and the __________________ . A. social costs are greatest; environmental benefits are least B. marginal benefits are greatest; marginal costs are least C. environmental benefits are greatest; social costs are least D. marginal benefits are least; marginal costs are greatest

B. marginal benefits are greatest; marginal costs are least

Suppose government regulators allow a public utility with a natural monopoly to go unregulated. Under such a scenario, the public utility will produce at a level where ________ is equal to ________ . A. marginal cost; demand B. marginal revenue; marginal cost C. demand; average cost D. marginal cost; average cost

B. marginal revenue; marginal cost

Ecotourism does all of the following, except: A. promote sustainable community development B. encourage sustainable travel C. encourage development of land over wildlife protection D. promote bio-cultural diversity

C

One way to increase new technology is to guarantee the ______________ an exclusive right to that new product or process. A. investor B. government C. innovator D. copyright

C

Historically, when an endangered species is discovered on private land, what has typically been the reaction of the government under a command-and-control approach to environmental law? A. The government purchases the land from the landowner. B. The government pays the landowner to provide for the endangered species. C. The government prohibits the property owner from using his or her land. D. The government allows the landowner to continue to use the land as the landowner sees fit.

C. The government prohibits the property owner from using his or her land.

When the quantity of environmental protection is low so that pollution is extensive, which of the following statements is most true? A. There are often a few inexpensive and easy ways to fight pollution and the average benefit is only slightly higher than the cost. B. There are often a lot of expensive and innovative methods to fight pollution and the marginal benefits of doing so are quite high. C. There are a lot of cheap and easy ways to fight pollution and the marginal benefits of doing so are quite high. D. all of the above

C. There are a lot of cheap and easy ways to fight pollution and the marginal benefits of doing so are quite high.

In the context of limiting pollution, command-and-control regulation _______. A. usually draws distinctions between firms that would find it easy and inexpensive to meet a pollution standard—or to reduce pollution even further—and firms that might find it difficult and costly to meet the standard B. offers incentives to improve the quality of the environment beyond the standard set by a particular law C. usually requires the same standard for all polluters, and often the same pollution-control technology as well D. usually does not require that firms increase their costs by installing anti-pollution equipment

C. usually requires the same standard for all polluters, and often the same pollution-control technology as well

Increasingly, societies are understanding the collective cost and the collective benefit of caring for the environment. There are many benefits to this way of understanding environmental protections. Which of the following is one of those benefits? A. Certain industries that rely on clean air and water may benefit. B. Property values may be higher. C. People may stay healthier and live longer. D. All of the above.

D

What do the positive externalities of education typically include? A. lower levels of crime B. a cleaner environment C. better health outcomes for the population D. all of the above

D

A study by the Environmental Protection Agency looked at the costs and benefits of the Clean Air Act from 1970 to 1990. This study found that a middle-range estimate of health and other benefits of cleaner air were valued at $22 trillion. This amount was about __________________ than the costs of reducing pollution, which was around $500 billion, in the same period. A. 10 times lower B. 10 times higher C. 44 times lower D. 44 times higher

D.

Regulatory capture occurs when firms being regulated end up _______________ setting the regulations they will follow. A. playing a small role in B. taking a hands-off approach in C. not following protocol while D. playing a large role in

D. Reason: Regulatory capture occurs when firms that are supposedly regulated end up playing a large role in setting the regulations that they will follow.

Which of the following is likely to result from a cleaner environment? A. Industries that rely on clean air and water will benefit. B. Property values will be higher. C. People will stay healthier and live longer. D. All of the above.

D. All of the above

Which of the following is an example of a positive externality? A. Khalid buys a BMW and the driving experience is even better than he expected. B. Gunter practices on his drum set in his apartment and his neighbors are kept awake by the music. C. Marissa enjoys her trail hike and decides to take dozens of photos along the way. D. Bob paints a nature scene on a large canvas at the park and people passing by stop to watch him paint.

D. Bob paints a nature scene on a large canvas at the park and people passing by stop to watch him paint.

A manufacturing firm has a marketable permit that currently allows for 400 tons of emissions. However, the marketable permit is shrinkable and the firm will only be allowed 200 tons of emissions next year. The manufacturing firm projects that it's actual emissions next year will be 200 tons. Which of the following actions would be in the best interest of the manufacturing firm? A. buy a marketable permit allowing for 50 tons of emissions B. sell a marketable permit allowing for 100 tons of emissions C. sell a marketable permit allowing for 200 tons of emissions D. not to buy or sell a marketable permit

D. Not to buy or sell a marketable permit Reason: Because the manufacturing firm is projecting 200 tons of emissions next year and current marketable permit will allows for 200 tons of emissions, it is in their best interest not to buy or sell a marketable permit.

In the situation of a firm releasing pollutants during the production process, which negatively impacts the surrounding community, the firm is considered to be contributing to market failure. Why? A. The government fines and taxes imposed for polluting will likely bankrupt the firm. B. The social benefits to consumers exceed the social costs of production. C. There are no externalities present, which means all costs are represented in the supply curve. D. The costs associated with the pollution are not taken into account. Therefore, the market fails to achieve efficient output.

D. The costs associated with the pollution are not taken into account. Therefore, the market fails to achieve efficient output.

All of the following statements about ecotourism are true, except: A. Ecotourism needs careful management. B. Ecotourism is a big and growing business. C. Ecotourism may lead to residents of low-income countries opting to preserve wildlife habitats rather than destroy them. D. There is no threat that ecotourism could have negative effects on wildlife habitats.

D. There is no threat that ecotourism could have negative effects on wildlife habitats.

In recent years, ecotourism __________________ A. is decreasing in popularity B. is only popular in low-income countries C. is only popular in high-income countries D. is increasing in popularity

D. is increasing in popularity

Below is a production possibility frontier (PPF) showing the tradeoff a nation faces between economic output and environmental protection. At what point is a nation choosing the highest level of environmental protection with little economic output? A. A B. B C. E D. F graph photo @6:44pm

E

Below is a production possibility frontier (PPF) showing the tradeoff a nation faces between economic output and environmental protection. At what point is a nation choosing the highest level of environmental protection with little economic output? GRAPH PICTURE: 5:07pm

E

Below is a production possibility frontier (PPF) showing the tradeoff a nation faces between economic output and environmental protection. At what point would a nation with high per capita gross domestic product (GDP) likely choose to produce? GRAPH PHOTO TAKEN @5:22pm

E Reason: Choice E is at one extreme on the PPF. At point E, a nation would be selecting a high level of environmental protection but with very little economic output. According to the graph, an increase in environmental protection involves a tradeoff of economic output. Countries with higher income levels, where a greater share of people have access to the basic necessities of life, may be willing to place a relatively greater emphasis on environmental protection.

It is often the case with individual firms that environmental protection (pollution reduction) is at different stages. Review the graphs below, which illustrate various marginal cost and marginal benefit situations, for individual firm's environmental protection strategies . The blue lines represent the strength of environmental protections these firms have deployed. Which of the graphs show a firm that should allocate the most resources to fight pollution? Graph Photo Taken: 5:23pm

Firm A

Below is the the market demand curve for reusable water bottles when only the marginal private benefits (MPB) that the owners of reusable water bottles receive are taken into account. If the government provides a subsidy to buyers of reusable water bottles, equal to the marginal social benefit minus the marginal private benefit, in this case $20 per bottle, the demand curve will shift and become the same as the marginal social benefit curve (MSB). Move the demand curve to illustrate that.

Graph @8:59pm

Black & White Computing is putting together its R&D budget for the coming year. The firm has compiled a list of potential research and development projects and estimated the interest rate and amount of financial capital required for various levels of R&D spending. The data collected is shown in the table below. Graph Black & White Computing's demand curve for financial capital when the firm receives only the private benefit of investing in R&D.

Graph photo : @8:52

The figure below shows the market for higher education. The market demand curve for higher education reflects only the marginal private benefit (MPB) that individuals receive. Since this is a market with positive externalities, suppose the government provides a subsidy to consumers of higher education (students) that is equal to the marginal social benefit (MSB) minus the marginal private benefit (MPB), in this case, $6,000 per student. With the subsidy, the demand curve will shift and become the same as the marginal social benefit (MSB) curve. Move the demand curve below to illustrate this shift. Be sure to take the exact size of the subsidy into account. Precise answers are required.

Graph photo taken @ 9:15pm Reason: With this shift, the new social equilibrium point occurs where marginal social benefit equals marginal social cost, which is at a price of $9,000 and a quantity of 900,000. When the government uses a subsidy in this way, it encourages the market to provide the socially optimal level of higher education.

The graph represents the supply and demand conditions for a chemical production plant. When this firm is required to account for the social cost of pollution, they discover that they need to charge additional fees in order to achieve market equilibrium. Move the supply curve so it accurately represents the new equilibrium when the firm is required to account for the social cost of pollution.

Graph picture @6:40pm

Honey bees kept by beekeepers pollinate flowers and plants nearby (not just those owned by the beekeeper) which promote growth of plants, grasses, and trees. The graph below shows the market for honey bees. In the graph below, reposition the moveable point "Social P & Q" to indicate the socially optimal price and quantity of honey bees.

Graph: @8:56pm

Real World Medical Technology is putting together its R&D budget for the coming year. The firm has compiled a list of potential research and development projects and estimated the interest rate and amount of financial capital required for various levels of R&D spending. The data collected is shown in the table below. Graph the demand curve for Real World Medical Technology that includes the spillover benefits society enjoys from the company's investment in R&D.

Graphs @9:04pm Reason: If Real World Medical Technology's investment in research and development creates a spillover benefit to other firms and households, we add the spillover benefit that society enjoys to the firm's private demand for financial capital. This represents the social demand for R&D funding and can be found in the column labeled Dsocial . In this case, Real World Medical Technology will invest $3 million in R&D when the interest rate for borrowing the financial capital is 11%, $4 million when the interest rate is 9%, and so forth

Knowlton Power is putting together its R&D budget for the coming year. The firm has compiled a list of potential research and development projects and estimated the interest rate and amount of financial capital required for various levels of R&D spending. The data collected is shown in the table below. Graph Knowlton Power's demand curve for financial capital when the firm receives only the private benefit of investing in R&D.

Graphs: @8:54pm & 8:55pm

The graph below represents the supply and demand conditions for a manufacturing firm when the firm takes into account the social cost of pollution. The firm produced a higher quantity in order to achieve market equilibrium prior to taking into account the social cost of pollution. Move the supply curve so it accurately represents the previous equilibrium when the firm was not required to account for the social cost of pollution.

Photo taken 4:07pm

The graph below represents the supply and demand conditions for a manufacturing firm. When the firm is required to account for the social cost of pollution, they discover that they need to charge a higher price in order to achieve market equilibrium. Move the supply curve so it accurately represents the new equilibrium when the firm is required to account for the social cost of pollution in this situation.

Photo taken @2:10

The graph below represents the supply and demand conditions for a manufacturing firm. When the firm is required to account for the social cost of pollution, they discover that they need to produce a lower quantity in order to achieve market equilibrium. Move the supply curve so it accurately represents the new equilibrium when the firm is required to account for the social cost of pollution.

Photo taken @2:17pm

The below graph represents the supply and demand conditions for a manufacturing firm. When the firm is required to account for the social cost of pollution, they discover that they need to charge an additional fee in order to achieve market equilibrium. Move the supply curve so it accurately represents the new equilibrium when the firm is required to account for the social cost of pollution in this situation.

Photo taken: 4:05pm

The graphs below show the marginal costs and marginal benefits of environmental protection for a given society. The dashed line in each graph shows the society's current allocation of resources to environmental protection. Which society has the most to gain by devoting more resources to environmental protection? ANSWER CHOICES are pictured: 5:15pm

Society A Graph pictures on Screenshots

All of the following graphs illustrate the marginal costs and marginal benefits of environmental protection. The dotted lines represent the various quantities of environmental protection a society can experience. Of the following graphs, which societies are forfeiting too many resources to reduce pollution? GRAPH PHOTOS TAKEN @5:30pm

Society B and Society C

Consider a country which has a threatened animal as its national symbol. It has been attempting to use low cost approaches to help the threatened animal, and at one point had a balanced plan, but a crisis has caused the country to invest in the animals protection far beyond the marginal benefit of doing so. Using the chart provided which strategy, A, B or C defines the approach the country has taken to protect the threatened national symbol? Graph photo taken: 5:25pm

Strategy C

Education has both positive private rates of return and positive social rates of return. True False

True

True or False? Prior to the Great Deregulation Experiment, the government body of the airline industry essentially prevented the entry of new airlines on the main routes in the United States.

True Reason: In 1938, the U.S. government created the Civil Aeronautics Board (CAB) to regulate airfares and routes instead. For 40 years, from 1938 to 1978, the CAB approved all fares, controlled all entry and exit, and specified which airlines could fly which routes. There was zero entry of new airlines on the main routes across the country for 40 years, because the CAB did not think it was necessary.

True or false? Bob owns a piece of land that the Green Stream flows through. An industrial polluter dirties the Green Stream and Bob attempts to sue the polluter and get an injunction to stop the practice. This is an example of how property rights can affect individual incentives.

True Reason: Property rights are considered the legal rights of ownership on which others are not allowed to infringe without paying compensation. In this case, Bob has legal ownership of the land and will try to use his property rights to stop the industrial polluter from polluting Green Stream.

When the government attempts to set the price at marginal cost through the force of regulation, a natural monopoly firm will likely lose money and go out of business unless ______________.

the government offers the firm an ongoing public subsidy Reason: When the government attempts to set prices at marginal costs and quantities produced through the force of regulation, many issues can arise. Unless the regulators or the government offer the firm an ongoing public subsidy (and there are numerous political problems with that option), the firm will lose money and go out of business