Question 1

In the figure above,if a pollution tax is imposed that is equal to the marginal external cost of pollution,then when the market is in equilibrium,the deadweight loss is ________ thousand per month.

Accepted Answer

When a pollution tax equal to the marginal external cost is imposed, it internalizes the externality, leading to an efficient market outcome with no deadweight loss.

Question 2

An external benefit is a benefit from a good or service that someone other than the ________ receives.

Accepted Answer

An external benefit is a benefit that someone other than the consumer (or buyer) receives, meaning that the seller, government, foreign sector, or market maker are not the ones benefiting.

Question 3

Marginal social benefit equals

Accepted Answer

Marginal social benefit (MSB) refers to the total benefit society receives from the consumption of an additional unit of a good. It includes both the marginal private benefit (MPB), or the benefit received by the individual consuming the good, and the marginal external benefit (MEB), or the benefit received by third parties not directly involved in the consumption of the good. Therefore, MSB is equal to MPB plus MEB, making choice D the correct answer.

Question 4

When Ronald takes another economics class,other people in society benefit.The benefit to these other people is called the marginal ________ benefit of the class.

Accepted Answer

The answer of When Ronald takes another economics class,other people...

Question 5

A chemical factory dumps waste into a river.The figure above shows the demand curve for the chemical (D)and the marginal private cost (MC)and marginal social cost (MSC)of producing it.
-In the figure,the unregulated market equilibrium occurs at a price of ________ a ton and quantity of ________ tons.

Accepted Answer

The unregulated market equilibrium occurs at the intersection of the supply and demand curves. The supply curve is upward sloping, and the demand curve is downward sloping. The equilibrium price is the price at which the quantity supplied equals the quantity demanded. The equilibrium quantity is the quantity that is bought and sold at the equilibrium price. In the figure, the equilibrium price is $100 per ton, and the equilibrium quantity is 4,000 tons.

Question 6

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

Accepted Answer

The answer of 
-The figure above shows the market for...

Question 7

If an external benefit is present,then the

Accepted Answer

External benefits refer to positive externalities or spillover effects which benefit society as a whole, not just the individual or firm producing the good or service. The marginal social benefit (MSB) curve takes into account both the private benefit and the external benefit, and it lies above the marginal private benefit (MPB) curve. This is because the MSB reflects the total benefit to society, while the MPB only reflects the benefit to the individual or firm producing the good or service. Therefore, external benefits cause a divergence between the MPB and MSB curves, resulting in market failure.

Question 8

-The figure above shows the market for annual influenza immunizations the United States.Area B is the

Accepted Answer

The answer of 
-The figure above shows the market for...

Question 9

A chemical factory dumps waste into a river.The figure above shows the demand curve for the chemical (D)and the marginal private cost (MC)and marginal social cost (MSC)of producing it.
-In the figure above,when the market is unregulated and in equilibrium,marginal social cost ________ marginal benefit,and the quantity of chemical produced is ________.

Accepted Answer

The answer of  A chemical factory dumps waste into...

Question 10

Based on the figure above,if the factory owned the river then at the equilibrium,marginal social cost would ________ marginal benefit,and the quantity of chemical produced would be ________.

Accepted Answer

The answer of Based on the figure above,if the factory...

Question 11

Which of the following is an example of a voucher?

Accepted Answer

Food stamps are a form of voucher that can be redeemed for food.

Question 12

The figure above shows the demand for college education (D),the marginal social benefit of college education (MSB),and the marginal cost of the private schools (MC).
-The figure above shows that at the unregulated market equilibrium,marginal social benefit ________ marginal cost,and the number of students enrolled is ________.

Accepted Answer

At the unregulated market equilibrium, marginal social benefit (MSB) exceeds marginal cost (MC), as MSB intersects demand at a higher quantity than MC intersects supply. The number of students enrolled is below the efficient quantity because at the efficient quantity, where MSB = MC, there is a higher value of education than the market equilibrium, where MSB > MC. Therefore, the market is producing a quantity below the efficient quantity. Choice B correctly states that MSB exceeds MC and enrollment is below the efficient quantity.

Question 13

The benefit the consumer of a good or service receives is the

Accepted Answer

Private benefit refers to the benefit received by the individual consumer who purchases a good or service. It is a benefit that is enjoyed exclusively by the buyer and not shared with others. Social benefit (A) and public benefit (D) refer to the benefits received by the society as a whole, while external benefit (B) refers to the benefits received by individuals or entities outside the market transaction. Consumption benefit (E) is not a commonly used term in economics.

Question 14

In an unregulated market with an external benefit,the

Accepted Answer

In an unregulated market with an external benefit, the producer does not receive the full benefit of their actions. As a result, they do not produce enough to reach the efficient quantity, leading to a lower quantity produced than the efficient quantity.

Question 15

The figure above shows the demand for college education (D),the marginal social benefit of college education (MSB),and the marginal cost of the private schools (MC).
-The figure above shows that the unregulated market equilibrium occurs at a tuition of ________ a year and ________ million students.

Accepted Answer

The answer of  The figure above shows the demand...

Question 16

Based on the figure above,when the market is unregulated and is in equilibrium,the deadweight loss is

Accepted Answer

The answer of Based on the figure above,when the market...

Question 17

If tuition at a college is $30,000 and the external benefit of graduating from this college is $10,000,then
I.in the absence of any government intervention,the number of students graduating is less than the efficient number.
Ii.the government could increase the number of graduates by giving the college a $10,000 subsidy per student.
Iii.the government could increase the number of graduates by giving the students $10,000 vouchers.

Accepted Answer

i. The presence of an external benefit means that the social benefit of graduating is higher than the private benefit by $10,000. This discrepancy leads to under-enrollment compared to the socially optimal level, as individuals do not consider the external benefit when deciding whether to attend.ii. A $10,000 subsidy to the college per student effectively lowers the cost of providing education, which can allow the college to reduce tuition or improve quality, making education more attractive to potential students and likely increasing enrollment.iii. A $10,000 voucher to students directly lowers their cost of attending college, making it more financially feasible for more students to enroll, thus increasing the number of graduates.

Question 18

-The figure above shows the market for annual influenza immunizations the United States.Area A is the

Accepted Answer

The answer of 
-The figure above shows the market for...

Question 19

In the figure above,if a pollution tax is imposed that is equal to the marginal external cost of pollution,then at the equilibrium,marginal social cost would ________ marginal benefit,and the quantity of chemical produced would be ________.

Accepted Answer

Imposing a pollution tax equal to the marginal external cost aligns the marginal social cost with the marginal benefit, leading to the production of an efficient quantity of chemicals.

Question 20

A chemical factory dumps waste into a river.The figure above shows the demand curve for the chemical (D)and the marginal private cost (MC)and marginal social cost (MSC)of producing it.
-In the figure above,when the market is unregulated and in equilibrium,the deadweight loss is ________ thousand per month.

Accepted Answer

The answer of  A chemical factory dumps waste into...

Quiz 9: Externalities: Pollution, education, and Health Care

In the figure above,if a pollution tax is imposed that is equal to the marginal external cost of pollution,then when the market is in equilibrium,the deadweight loss is ________ thousand per month.

An external benefit is a benefit from a good or service that someone other than the ________ receives.

Marginal social benefit equals

When Ronald takes another economics class,other people in society benefit.The benefit to these other people is called the marginal ________ benefit of the class.

A chemical factory dumps waste into a river.The figure above shows the demand curve for the chemical (D) and the marginal private cost (MC) and marginal social cost (MSC) of producing it. -In the figure,the unregulated market equilibrium occurs at a price of a ton and quantity of tons.

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

If an external benefit is present,then the

-The figure above shows the market for annual influenza immunizations the United States.Area B is the

Based on the figure above,if the factory owned the river then at the equilibrium,marginal social cost would marginal benefit,and the quantity of chemical produced would be .

Which of the following is an example of a voucher?

The benefit the consumer of a good or service receives is the

In an unregulated market with an external benefit,the

The figure above shows the demand for college education (D) ,the marginal social benefit of college education (MSB) ,and the marginal cost of the private schools (MC) . -The figure above shows that the unregulated market equilibrium occurs at a tuition of a year and million students.

Based on the figure above,when the market is unregulated and is in equilibrium,the deadweight loss is

-The figure above shows the market for annual influenza immunizations the United States.Area A is the

In the figure above,if a pollution tax is imposed that is equal to the marginal external cost of pollution,then at the equilibrium,marginal social cost would marginal benefit,and the quantity of chemical produced would be .