Eco chapter 17
Which of the following offers the best example of a positive externality
A coastal dairy farmer's undeveloped land offers unimpeded views of the ocean for a nearby neighborhood
Why is the rate of deforestation frequently higher than would be socially optimal?
Population pressure coupled with a lack of incentives to conserve open-access resources results in deforestation
Which of the following offers positive external benefits in consumption
Public education
An example of an external cost
The harms to private property, open-access resources, and human health caused by pollution byproducts of electricity production
Exhaustible resource
a resource in fixed supply, such as crude oil or coal
Renewable resource
a resource that regenerates itself and so can be used indefinitely if used conservatively such as a well-managed forest
economic efficiency approach
an approach that offers each polluter the flexibility to reduce emissions as cost effectively as possible, given its unique cost conditions; the market for pollution rights is an example
command and control environmental regulations
an inflexible approach that required polluters to adopt particular technologies to reduce emissions by specific amounts
Coase theorem
as long as bargaining costs are low, an efficient solution to the problem of externalities is achieved by assigning property rights to one party or the other, it doesn't matter which
According to the Coase theorem, efficient solution of an externality problem
can be achieved only if one particular party is assigned the property right
Almost 70 percent of U.S. garbage
goes to landfills
When there are positive externalities in the consumption of a good
marginal social benefit exceeds marginal private benefit
Variable technology
occurs when the amount of externality generated at a given rate of output can be reduced by altering the production process
Marginal social cost equals marginal ___ cost plus marginal __ cost, and reflects the true marginal cost to society of an additional unit of production
private; external
From an economic standpoint, the passage of the Clean Air Act of 1970 did which of the following
recognized the atmosphere as an economic resource with alternative uses, and gave Americans the right to breathe air of a certain quality
A renewable resource such as fish which is also an open-access good is
rival and nonexclusive
An open-access good is often subject to which of the following problems
the common-pool problem
Marginal social benefit
the sum of the marginal private benefit and the marginal external benefit of production or consumption
Marginal social cost
the sum of the marginal private cost and the marginal external cost of production or consumption
Common-pool problem
unrestricted access to a renewable resource results in overuse
