Econ Module 34-36

which of the following does NOT generates a negative externality

a charitable organization donates a vintage car to be auctioned off for charity

a Pigouvian tax can lead to the efficient level of production and consumption of

a common reasource

which example is BEST characterized as a common resource

a dormkitchen

the BEST example of a public good is

a fireworks display organized by a municipality

which good BEST fits the characteristics of a private good

a hamburger

the BEST example of a private good is

a new jeep

a key feature of a public good is

access for anyone who wishes to consume it

if the marginal social benefit received from pollution is greater than its marginal social cost in a market

an increase in the quantity of pollution will improve society's well-being

a positive externality or an external benefit is a

benefit that individuals or firms confer on others without without receiving compensation

market failure occurs when

decision makers are not faced with the full benefits and costs of their choices

a Pigouvian subsidy is

designed to encourage activities that generate external benefits

the socially optimal amount of pollution occurs where the marginal social benefit of pollution is ____ the marginal social cost of pollution

equal to

if the market producers an efficient amount of a good, then we know that the good must be _____ and ____ in consumption

excludable; rival

A(n) _____ is a benefit that an individual or firm confers on others without receiving compensation

external benefit

the BEST example of a common resource(s) is/are

fishing in a local public lake

an externality is said to exist when

individuals impose costs or benefits on others but have no incentive to take these costs and benefits into account

A public good such as national defense ___________ excludable and is ______ in consumption

is not; nonrival

a common resource, such as a lake or stream, ______ excludable and is _____ in consumption

is not; rival

a good is artificially scarce if

it is excludable but nonrival

if left to the private market, the provision of a public good would be _____ than it is now, and free-riders would pay _____ to consume it

less; nothing

which good is most likely to be a public good

national defense

When Jeremiah watches a movie on Apple TV, his viewing is _____ in consumption because other people _____ able to watch the movie at the same time as Jeremiah does

non-rival; are

the free-rider problem is most common when a good is

nonexcludable

city police services and clean water are similar in that both are _____, but they differ in that clean water is ____, while city police services are not

nonexcludable; rival in consumption

an artificially scarce good is similar to a public good in that it is ____, but it is also similar to a private good in that it is _____

nonrival in consumption; excludable

damage the environment occurs because

pollution results from the production of goods and services

Adriana stops at a propane station to fill up the tank of her BBQ. The propane in her tank for the BBQ is BEST described as a(n)

private good

a pair of jeans that you purchase from American Eagle is a(n) _____ that is excludable and rival in consumption

private good

a volunteer fire department is a good example of the ____ provision of _____

private; a public good

if a good is produced at an inefficiently low level and is subject to the free-rider problem, the good must be a(n)

public good

many goods provided by the government, such as education, are _____ and are accordingly nonexcludable and nonrival in consumption

public goods

The marginal social cost of a unit of pollution is

the additional cost imposed on society by that unit

the federal government provides public goods such as national defense because

the free-rider problem generally results in underproduction of public goods

the free-rider problem results from

the inability to prevent individuals who do not pay for a good from consuming it

the additional benefit received by society as a whole from a one-unit increase in pollution is

the marginal social benefit of pollution

Public goods should be produced up to the point at which the marginal cost of production equals:

the sum of the individual marginal benefits enjoyed by all consumers of that unit

when the allocation of resources in a free market is such that a different allocation would increase social welfare, economists say

there is market failure

because the general market mechanism does not take into account the negative side effects of production, a market economy will produce ____ without any government regulation

too much pollution

which of the following BEST describes a negative externality

your neighbor has an ornamental pond that breeds mosquitoes

which of the following does generates a negative externality

your neighbor starts his noisy construction project at 6 am on weekends

each of the following is an example of an external cost EXCEPT

zoning restrictions that prevent you from adding to your existing home