Question 1

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. Based on the data in the table, production of fertilizer has

Accepted Answer

The presence of external costs is indicated by the difference between the marginal social cost and the marginal private cost, suggesting that production imposes costs on others not reflected in the market price.

Question 2

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the equilibrium price per ton will be

Accepted Answer

The answer of 
-The above table shows the marginal benefits...

Question 3

Cap-and-trade policies make use of ________ to reduce different types of pollutants from the atmosphere.

Accepted Answer

Cap-and-trade policies utilize marketable permits, allowing companies to buy and sell allowances for emissions, thereby creating a financial incentive to reduce pollution.

Question 4

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the equilibrium output will be

Accepted Answer

The answer of 
-The above table shows the marginal benefits...

Question 5

Both firm A and firm B emit 300 tons of pollution. Suppose both firm A and firm B have permits that allow each to emit 100 tons of pollution. If it costs $5,000 for firm A to eliminate 100 tons of pollution and it costs firm B $6,000 to eliminate 100 tons of pollution, then

Accepted Answer

The answer of Both firm A and firm B emit...

Question 6

The government can aid in reducing pollution by using a policy of cap-and-trade, which means that

Accepted Answer

Cap-and-trade is a system where the government sets a cap on the total amount of pollution allowed and issues permits to polluters, which can be traded, allowing companies to buy or sell the right to emit a certain amount of pollution.

Question 7

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium level of output, the marginal external cost per ton is

Accepted Answer

The answer of 
-The above table shows the marginal benefits...

Question 8

-If the government regulates the market in the above figure in a way to achieve efficiency, then ________ tons of paper will be produced and consumed.

Accepted Answer

The answer of 
-If the government regulates the market in...

Question 9

If the government creates a system of pollution permits, firms with low marginal costs of reducing pollution will

Accepted Answer

Firms with low marginal costs of reducing pollution can reduce pollution cheaply and sell their excess permits to firms with higher reduction costs.

Question 10

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the efficient level of output could be achieved by setting a per ton tax of

Accepted Answer

The answer of 
-The above table shows the marginal benefits...

Question 11

-In the figure above, if the market is unregulated, the price will be

Accepted Answer

The answer of 
-In the figure above, if the market...

Question 12

With marketable permits to pollute, efficiency can be obtained if

Accepted Answer

Efficiency is achieved when firms with low marginal costs of reducing pollution sell their permits to firms with higher costs, allowing pollution reduction at the lowest overall cost.

Question 13

-In the figure above, if the market is unregulated, the output will be

Accepted Answer

The answer of 
-In the figure above, if the market...

Question 14

-In the figure above showing the costs and benefits of paper production, there is an

Accepted Answer

External costs are negative effects of production that are not reflected in the market price, such as pollution from paper production affecting the environment.

Question 15

There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry

Accepted Answer

Joe's industry, having a lower marginal cost of reducing sulfur dioxide, will find it cheaper to reduce emissions and can sell permits to Harry's industry, which has a higher marginal cost.

Question 16

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium level of output

Accepted Answer

The answer of 
-The above table shows the marginal benefits...

Question 17

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. The efficient level of output is

Accepted Answer

The answer of 
-The above table shows the marginal benefits...

Question 18

-In the above figure, the competitive unregulated equilibrium is producing and consuming ________ tons of paper at a price of ________ per ton.

Accepted Answer

The answer of 
-In the above figure, the competitive unregulated...

Question 19

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium output, the

Accepted Answer

The answer of 
-The above table shows the marginal benefits...

Question 20

-In the figure above, if the market is unregulated

Accepted Answer

The market is unregulated, so there is no government intervention to ensure that the efficient amount of output is produced. As a result, producers will produce more than the efficient amount of output in order to maximize their profits.

Quiz 17: Externalities

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. Based on the data in the table, production of fertilizer has

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the equilibrium price per ton will be

Cap-and-trade policies make use of ________ to reduce different types of pollutants from the atmosphere.

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the equilibrium output will be

Both firm A and firm B emit 300 tons of pollution. Suppose both firm A and firm B have permits that allow each to emit 100 tons of pollution. If it costs $5,000 for firm A to eliminate 100 tons of pollution and it costs firm B $6,000 to eliminate 100 tons of pollution, then

The government can aid in reducing pollution by using a policy of cap-and-trade, which means that

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium level of output, the marginal external cost per ton is

-If the government regulates the market in the above figure in a way to achieve efficiency, then ________ tons of paper will be produced and consumed.

If the government creates a system of pollution permits, firms with low marginal costs of reducing pollution will

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the efficient level of output could be achieved by setting a per ton tax of

-In the figure above, if the market is unregulated, the price will be

With marketable permits to pollute, efficiency can be obtained if

-In the figure above, if the market is unregulated, the output will be

-In the figure above showing the costs and benefits of paper production, there is an

There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium level of output

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. The efficient level of output is

-In the above figure, the competitive unregulated equilibrium is producing and consuming tons of paper at a price of per ton.

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium output, the

-In the figure above, if the market is unregulated