Graph 10-3 This graph reflects the market for kiwifruit, where pesticide used by kiwifruit orchardists also unintentionally kills honey bees.
-Refer to Graph 10-3.Assume that the kiwifruit orchardists must purchase a pesticide application permit (the cost for the permit is included in private cost) before spraying their fruit.What criteria should the government use in determining whether or not to issue a permit?
A)the majority vote of the affected beekeepers should determine whether a permit is issued
B)as long as the value to consumers of kiwifruit exceeds the cost of kiwifruit (including the external costs), the permit should be issued
C)as long as kiwifruit orchardists are willing to replace the dead honeybees, the permit should be issued
D)the permit should not be issued as long as there are identifiable external costs imposed on local beekeepers.

Question

Graph 10-3  This graph reflects the market for kiwifruit, where pesticide used by kiwifruit orchardists also unintentionally kills honey bees.
-Refer to Graph 10-3.Assume that the kiwifruit orchardists must purchase a pesticide application permit (the cost for the permit is included in private cost) before spraying their fruit.What criteria should the government use in determining whether or not to issue a permit?
A)the majority vote of the affected beekeepers should determine whether a permit is issued 
B)as long as the value to consumers of kiwifruit exceeds the cost of kiwifruit (including the external costs), the permit should be issued 
C)as long as kiwifruit orchardists are willing to replace the dead honeybees, the permit should be issued 
D)the permit should not be issued as long as there are identifiable external costs imposed on local beekeepers.

Quizplus · Accepted Answer

The correct criterion for issuing a permit involves comparing the total value to consumers of the kiwifruit against the total costs, including both private and external costs. If the value to consumers exceeds these total costs, issuing the permit can be justified as it indicates that the activity generates net benefits to society.

Graph 10-3 This Graph Reflects the Market for Kiwifruit