1. In the circular flow of financial activity surplus budget units are net lenders of funds while deficit budget units are net borrowers. Group of answer choices True False 2. External benefits (or positive externalities) are more likely to be present in the following market: Group of answer choices trucking industry (regulation) Electric power Educational services airline industry (regulation) 3. When external benefits are present in the production and delivery of a good or service, the market by itself without government intervention, will produce more than the optimal amount. Group of answer choices True False

1. In the circular flow of financial activity surplus budget units are net lenders of funds while deficit budget units are net borrowers. Group of answer choices True False 2. External benefits (or positive externalities) are more likely to be present in the following market: Group of answer choices trucking industry (regulation) Electric power Educational services airline industry (regulation) 3. When external benefits are present in the production and delivery of a good or service, the market by itself without government intervention, will produce more than the optimal amount. Group of answer choices True False

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 2.3P: (Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the...

See similar textbooks

Similar questions

Identify the following situations as an example of a negative or a positive externality: You are a birder (bird watcher), and your neighbor has put up several birdhouses in the yard as well as planting trees and flowers that attract birds. Your neighbor paints his house a hideous color. Investments in private education raise your countrys standard of living. Trash dumped upstream flows downstream right past your home. Your roommate is a smoker, but you are a nonsmoker.
(Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the activity that creates that externality. When the amount of the externality produced per unit of output increases as output increases, the correct tax can be determined by using a demand-supply diagram; show this. Assume that the marginal private cost curve slopes upward. Negative Externalities: The Market for Electricity in the Midwest:
Classify the following pollution-control policies as command-and-control or market incentive based. A state emissions tax on the quantity of carbon emitted by each firm. The federal government requires domestic auto companies to improve car emissions by 2020. The EPA sets national standards for water quality. A city sells permits to films that allow them to emit a specified quantity of pollution. The federal government pays fishermen to preserve salmon.
Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.
Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?