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
