Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem © 2013 Pearson Externalities 10 CLICKER QUESTIONS © 2013 Pearson Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem Checkpoint 10.1 Checkpoint 10.2 Question Question 11 Question Question 66 Question Question 22 Question Question 77 Question Question 33 Question Question 88 Question Question 44 Question Question 99 Question Question 55 Question Question 10 10 © 2013 Pearson CHECKPOINT 10.1 Question The cost of producing an additional unit of a good or service that is borne by the producer of that good or service _ A equals the consumer’s marginal benefit from that good or service B equals the cost borne by people other than the producer C is the marginal private cost D is the external cost E is the marginal social cost © 2013 Pearson CHECKPOINT 10.1 Question 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 A 10¢ B 19Â C 4Â D 0Â E 14Â â 2013 Pearson CHECKPOINT 10.1 Question The figure shows the market for a good with an external cost The external cost is _ and the efficient quantity is a year A B C D E $10 a ton; tons $5 a ton; 100 tons $10 a ton; 200 tons $20 a ton; 400 tons $10 a ton; 100 tons © 2013 Pearson CHECKPOINT 10.1 Question If a firm that pollutes is forced to pay a pollution charge, then A B C D E 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 © 2013 Pearson CHECKPOINT 10.1 Question A marketable pollution permit _ A allows firms to pollute all they want without any cost B allows firms to buy and sell the right to pollute at government controlled prices C eliminates pollution entirely D allows firms to buy and sell the right to pollute E is the Coase solution to the pollution problem © 2013 Pearson CHECKPOINT 10.2 Question Suppose that a service creates an external benefit If the market for the service is unregulated, the _ A quantity of the service produced exceeds than the efficient quantity B price of the service is too high for the market to be efficient C quantity of the service produced is less than the efficient quantity D producer’s marginal cost is less than the marginal social cost E government might impose a tax to help make the market outcome more efficient © 2013 Pearson CHECKPOINT 10.2 Question The figure shows the market for flu vaccinations The quantity of vaccinations is a year, and the deadweight loss is A 100 million; $187.5 B C D E 50 million; $250 million 75 million; $0 100 million; $250 million 75 million; $187.5 million © 2013 Pearson CHECKPOINT 10.2 Question If an external benefit is present, then the _ A marginal private benefit exceeds the marginal private cost B marginal social benefit exceeds the marginal private benefit C marginal social cost exceeds the marginal private benefit D marginal social benefit is equal to the marginal social cost E marginal social benefit equals the marginal private benefit © 2013 Pearson CHECKPOINT 10.2 Question The figure shows the market for flu vaccinations The quantity of flu vaccinations will be efficient if the government A offers doctors a $10 subsidy B advertises the benefits C offers people a $10 subsidy D offers people a $20 voucher E offers free flu vaccinations © 2013 Pearson CHECKPOINT 10.2 Question 10 Which of the following is a method used by government to cope with the situation in which production of a good creates an external benefit? A B C D E removing property rights paying subsidies issuing production quotas running a lottery Imposing a Coasian tax © 2013 Pearson ... quantity of flu vaccinations will be efficient if the government A offers doctors a $10 subsidy B advertises the benefits C offers people a $10 subsidy D offers people a $20 voucher E offers... 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... 10 10 © 2013 Pearson CHECKPOINT 10.1 Question The cost of producing an additional unit of a good or service that is borne by the producer of that good or service _ A equals the consumer’s