ECON Chapter 9

The Coase Theorem will will breakdown when​ ____________.

A. transaction costs become high. Your answer is correct.B. there are a large number of agents. Your answer is correct.C. when property rights are not clearly defined

Based on these government​ regulations, if the families have a right to less​ noise, then the ______ would predict that with private negotiations the _________

Coase Theorem wind farm will offer to pay families to bear the noise

Which of the following is not an​ externality?

Jordan has lung cancer from smoking cigarettes

What is the intent of a Pigouvian​ tax?

To induce producers of a negative externality to reduce production to the socially optimal level.

One possible economic solution to the overhunting of rhinos is to​ __________.

allow private conservation

In this​ case, rhinos are best categorized as​ ____________.

common pool

The noise from the wind farm is a

negative externality

Public goods are _______ while common pool are __________

non-rival rival

Suppose that you put an invisible tracking device on your computer that will instantly lead police to it if your computer is ever stolen. Your purchase of the tracking device provides a ____________ for other computer owners.

positive externatity

The Coase Theorem states that​ ____________.

private bargaining will result in an efficient allocation of resources.

Health insurance is a ________ Radio spectrum is a _______ A video on YouTube is a ________ A mosquito control program is a ___________ A library's collection of e-books is a __________

private good common pool public good public good club good

From an efficiency​ perspective, Jones _________ allowed to play his opera music.

should be

Jojo's initial shirking is an example of

the free rider problem

overhunting rhinos is an example of

the tragedy of the commons

___________ will vote in favor of the display

One person

Why is the market demand curve for public goods calculated as a vertical summation of individual demand​ curves?

because the public good is​ non-rival, so you and others can consume every unit of the good at the same time.

Suppose the production of a particular good causes a negative externality. Based on market forces​ only, how will this impact the production levels for a factory if negative externalities are​ present?

It will produce the good above the socially efficient level.

Jones and Smith live in the same apartment building. Jones loves to play his opera recordings so loudly that Smith can hear them. Smith hates opera. Jones receives​ $100 worth of benefits from his music and Smith suffers​ $60 worth of damages. According to the Coase​ Theorem, __________ to compensate for the ______________

Jones will pay $0 to Smith negative externality Jones will pay $60 to Smith negative externality

____________ will provide the display on their own

No one citizen

In your environmental economics study​ group, a friend argues that using taxes to control pollution is not efficient​ because, even with​ taxes, a positive amount of pollution is still produced. Do you​ agree?

No, because an efficient outcome balances costs with benefits and eliminating all pollution would be cost prohibitive.

Externalities are called market failures because they​ ___________.

cause markets to produce suboptimal social outcomes.

How does a​ command-and-control policy differ from a​ market-based policy?

government directly regulates allocation of resources government provides incentives for private organizations to internalize the externality

The new higher estimate of social cost implies ______ Pigouvian tax required to lead to the efficient level of steel.

higher

The new higher estimate of social cost implies ___________ efficient quantity of steel.

lower

Which of the following is not likely to be subject to the tragedy of the​ commons?

national defense

An individual or a firm can internalize an externality by​ ___________.

paying the cost of the externality

Why is it difficult for the market to deliver socially efficient quantities of goods like clean air or street​ lighting? These are examples of ______________________ ​; ​therefore, even if you _________________ for the good you still _____________________

public goods do not pay get to enjoy it

In terms of​ efficiency, the fireworks display _____ be offered.

should