Question 1

If a subsidy was imposed on an industry whose production imposed external benefits on others,then the goods' consumers of the good would be ____ and the result would be a(n)____ in efficiency.

Accepted Answer

When a subsidy is imposed on an industry that produces goods with external benefits, the cost of production for the industry will decrease, and as a result, the price of the product will decrease. Therefore, consumers of the good would be better off as they can purchase the good at a lower price. Additionally, the subsidy will encourage the industry to produce more of this good which in turn will lead to an increase in efficiency.

Question 2

Beginning from a situation where there were no clear property rights to clean air and water:

Accepted Answer

If there were no clear property rights to clean air and water, external costs would be present. Subsidies would not improve efficiency in this case because it would not address the issue of external costs. However, taxes could improve efficiency by internalizing these costs and encouraging the reduction of harmful emissions and pollutants.

Question 3

Why do decision makers tend to ignore external costs? How can internalizing external costs move us closer to efficient levels of output?

Accepted Answer

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Question 4

Various new cars are sold with sensors that automatically turn on the headlights at night or any low light conditions.Would these sensors create a positive externality or a negative externality? How?

Accepted Answer

The answer of Various new cars are sold with sensors...

Question 5

What is the Coase Theorem? What are transaction costs?

Accepted Answer

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Question 6

If a developer plans to build a skyscraper in a major city overshadowing an historic church,could an efficient solution be reached if the church had the legal right to prevent the developer from building in that location? Why or why not?

Accepted Answer

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Question 7

Differentiate between a public good and common resources.

Accepted Answer

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Question 8

Why do most economists favor emissions taxes and transferable pollution rights over compliance standards as pollution deterrents?

Accepted Answer

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Question 9

What is the difference between private and social costs?

Accepted Answer

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Question 10

Explain why broadcasting television over the air is considered a public good.

Accepted Answer

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Question 11

How could transferable pollution rights lead to pollution being reduced at the lowest possible opportunity cost?

Accepted Answer

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Question 12

What are the external costs and external benefits associated with cellular phone usage in automobiles?

Accepted Answer

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Question 13

The ____ is the government agency with the task of developing and enforcing policies that are aimed at protecting the environment.

Accepted Answer

The EPA (Environmental Protection Agency) is the government agency responsible for developing and enforcing policies that protect the environment and public health. The FDA (Food and Drug Administration) is responsible for protecting public health by ensuring the safety and efficacy of food, drugs, and medical devices. The DOI (Department of the Interior) manages and conserves federal land and natural resources. FEMA (Federal Emergency Management Agency) is responsible for responding to and supporting recovery efforts after natural disasters or emergencies. Therefore, D is the best choice as it specifically deals with environmental protection.

Question 14

If the rivers,lakes and air in the United States could all be privately owned,then:

Accepted Answer

When resources like rivers, lakes, and air are privately owned, the owners have an incentive to minimize pollution to protect their property, leading to less pollution. Costs of production might rise for firms that previously could pollute for free but now have to pay the owners of these resources to emit pollutants. Externalities are internalized because the costs of pollution are borne by the polluter, who now has to compensate the owner of the resource being polluted.

Question 15

What distinguishes public goods from private goods?

Accepted Answer

The answer of What distinguishes public goods from private goods?...

Quiz 8: Market Failure

If a subsidy was imposed on an industry whose production imposed external benefits on others,then the goods' consumers of the good would be and the result would be a(n) in efficiency.

Beginning from a situation where there were no clear property rights to clean air and water:

Why do decision makers tend to ignore external costs? How can internalizing external costs move us closer to efficient levels of output?

Various new cars are sold with sensors that automatically turn on the headlights at night or any low light conditions.Would these sensors create a positive externality or a negative externality? How?

What is the Coase Theorem? What are transaction costs?

If a developer plans to build a skyscraper in a major city overshadowing an historic church,could an efficient solution be reached if the church had the legal right to prevent the developer from building in that location? Why or why not?

Differentiate between a public good and common resources.

Why do most economists favor emissions taxes and transferable pollution rights over compliance standards as pollution deterrents?

What is the difference between private and social costs?

Explain why broadcasting television over the air is considered a public good.

How could transferable pollution rights lead to pollution being reduced at the lowest possible opportunity cost?

What are the external costs and external benefits associated with cellular phone usage in automobiles?

The ____ is the government agency with the task of developing and enforcing policies that are aimed at protecting the environment.

If the rivers,lakes and air in the United States could all be privately owned,then:

What distinguishes public goods from private goods?

Quiz 8: Market Failure

If a subsidy was imposed on an industry whose production imposed external benefits on others,then the goods' consumers of the good would be ____ and the result would be a(n) ____ in efficiency.

Beginning from a situation where there were no clear property rights to clean air and water:

Why do decision makers tend to ignore external costs? How can internalizing external costs move us closer to efficient levels of output?

Various new cars are sold with sensors that automatically turn on the headlights at night or any low light conditions.Would these sensors create a positive externality or a negative externality? How?

What is the Coase Theorem? What are transaction costs?

If a developer plans to build a skyscraper in a major city overshadowing an historic church,could an efficient solution be reached if the church had the legal right to prevent the developer from building in that location? Why or why not?

Differentiate between a public good and common resources.

Why do most economists favor emissions taxes and transferable pollution rights over compliance standards as pollution deterrents?

What is the difference between private and social costs?

Explain why broadcasting television over the air is considered a public good.

How could transferable pollution rights lead to pollution being reduced at the lowest possible opportunity cost?

What are the external costs and external benefits associated with cellular phone usage in automobiles?

The ____ is the government agency with the task of developing and enforcing policies that are aimed at protecting the environment.

If the rivers,lakes and air in the United States could all be privately owned,then:

What distinguishes public goods from private goods?

If a subsidy was imposed on an industry whose production imposed external benefits on others,then the goods' consumers of the good would be and the result would be a(n) in efficiency.