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Externalities and the Environment

11. Externalities and the Environment. CLICKER QUESTIONS. Checkpoint 11.2. Checkpoint 11.1. Question 1. Question 6. Question 2. Question 7. Question 8. Question 3. Question 9. Question 4. Question 10. Question 5. CHECKPOINT 11.1. Question 1

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Externalities and the Environment

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  1. 11 Externalities and the Environment CLICKER QUESTIONS

  2. Checkpoint 11.2 Checkpoint 11.1 Question 1 Question 6 Question 2 Question 7 Question 8 Question 3 Question 9 Question 4 Question 10 Question 5

  3. CHECKPOINT 11.1 Question 1 The cost of producing an additional unit of a good or service that is borne by the producer of that good or service _________. • equals the consumer’s marginal benefit from that good or service • equals the cost borne by people other than the producer • is the marginal private cost • is the external cost • is the marginal social cost

  4. CHECKPOINT 11.1 Question 2 If the marginal private cost of producing one kilowatt of power is 10¢ and the marginal social cost of each kilowatt hour is 14¢, then the marginal external cost is ____ a kilowatt hour. • 10¢ • 19¢ • 4¢ • 0¢ • 14¢

  5. CHECKPOINT 11.1 Question 3 The figure shows the market for a good with an external cost. The external cost is _______ and the efficient quantity is ____ a year. • $10 a ton; 0 tons • $5 a ton; 100 tons • $10 a ton; 200 tons • $20 a ton; 400 tons • $10 a ton; 100 tons

  6. CHECKPOINT 11.1 Question 4 If a firm that pollutes is forced to pay a pollution charge, then __________. • the firm increases the quantity supplied of the good • the demand for the firm’s output decreases • the firm increases its supply of the good • the firm decreases its supply of the good • Both the firm’s supply of the good and the demand for the good decreases

  7. CHECKPOINT 11.1 Question 5 A marketable pollution permit _________. • allows firms to pollute all they want without any cost • allows firms to buy and sell the right to pollute at government controlled prices • eliminates pollution entirely • allows firms to buy and sell the right to pollute • is the Coase solution to the pollution problem

  8. CHECKPOINT 11.2 Question 6 The tragedy of the commons is the absence of incentives to _______. • correctly measure the marginal cost of using the resource • prevent underutilization of the common resource • prevent overuse and depletion of the common resource • discover the resource • prevent the free-rider problem

  9. CHECKPOINT 11.2 Question 7 For a common resource, the marginal private benefit from a given quantity of the resource is _______. • greater than the marginal social benefit • equal to the marginal social benefit • less than the marginal social benefit • not related to the marginal social benefit • not defined because the resource is nonexcludable

  10. CHECKPOINT 11.2 Question 8 Efficient use of a common resource requires that its ____. • marginal private benefit equals marginal cost • marginal social benefit equals marginal cost • marginal private benefit equals marginal social benefit • marginal private cost equals marginal cost • marginal private benefit equals marginal social cost

  11. CHECKPOINT 11.2 Question 9 The figure shows a market for logs from a tropical rainforest. The efficient number of loggers is ____ and if the market is unregulated, the number of loggers is ____. • 0; 100 • 0; 150 • 150; 100 • 100; 0 • 100; 150

  12. CHECKPOINT 11.2 Question 10 If the government assigns private property rights to a common resource, then ________. • the resource will be underutilized • the marginal social benefit becomes the marginal private benefit • the government must set a quota to achieve efficient use • the resource becomes a private good and cannot be used • a free-riding problem will emerge

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