Question : 10.3   Chapter Figures A chemical factory dumps waste into a river. : 1238635

10.3   Chapter Figures

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.

1) In the figure above, the unregulated market equilibrium occurs at a price of ________ a ton and quantity of ________ tons.

A) $100; 4,000

B) $150; 2,000

C) $150; 4,000

D) $225; 4,000

E) $100; 2,000

2) In the figure above, when the market is unregulated and in equilibrium, marginal social cost ________ marginal benefit, and the quantity of chemical produced is ________.

A) exceeds; above the efficient quantity

B) exceeds; below the efficient quantity

C) is below; above the efficient quantity

D) is below; below the efficient quantity

E) equals; efficient

3) In the figure above, when the market is unregulated and in equilibrium, the deadweight loss is ________ per month.

A) $250 thousand

B) $125 thousand

C) $150 thousand

D) $50 thousand

E) zero

4) 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 ________.

A) exceed; above the efficient quantity

B) exceed; below the efficient quantity

C) be below; above the efficient quantity

D) be below; below the efficient quantity

E) equal; efficient

5) 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 ________.

A) exceed; above the efficient quantity

B) exceed; below the efficient quantity

C) be below; above the efficient quantity

D) be below; below the efficient quantity

E) equal; efficient

6) 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 ________ per month.

A) $250 thousand

B) $125 thousand

C) $150 thousand

D) $50 thousand

E) zero

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).

7) The figure above shows that the unregulated market equilibrium occurs at a tuition of ________ a year and ________ million students.

A) $15,000; 7.5

B) $25,000; 15

C) $15,000; 15

D) $25,000; 7.5

E) $38,000; 7.5

8) The figure above shows that at the unregulated market equilibrium, marginal social benefit ________ marginal cost, and the number of students enrolled is ________.

A) exceeds; above the efficient quantity

B) exceeds; below the efficient quantity

C) is below; above the efficient quantity

D) is below; below the efficient quantity

E) equals; efficient

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

A) $86.25 million per year.

B) $56.25 million per year.

C) $48.75 million per year.

D) $37.50 million per year.

E) zero.

10) Using the figure above, suppose education is provided by public colleges, where tuition is set at $10,000 a year. Then, ________ million students are enrolled, and the taxpayers cover ________ of the marginal cost per student.

A) 15; $15,000

B) 7.5; $5,000

C) 3.5; none

D) 15; $25,000

E) 7.5; $15,000