Question :
121) When the production of a good has a marginal : 1241042
121) When the production of a good has a marginal external cost, which of the following occurs in an unregulated market?
i.Overproduction relative to the efficient level will occur.
ii.The market price is less than the marginal social cost at the equilibrium quantity.
iii.A deadweight loss occurs.
A) i only
B) ii only
C) iii only
D) i and ii
E) i, ii, and iii
122) The Coase theorem is the proposition that if property rights exist and are enforced, private transactions are
A) inefficient.
B) efficient.
C) inequitable.
D) illegal.
E) unnecessary.
123) A marketable permit
A) allows firms to pollute all they want without any cost.
B) allows firms to buy and sell the right to pollute at government controlled prices.
C) eliminates pollution by setting the price of pollution permits above the marginal cost of polluting.
D) allows firms to buy and sell the right to pollute.
E) is the Coase theorem solution to pollution.
124) If a polluting producer is forced to pay a pollution charge, what is the effect on the supply and demand curves for the product?
A) The quantity supplied along the firm’s supply curve increases.
B) The firm’s demand curve shifts leftward.
C) The firm’s supply curve shifts rightward.
D) The firm’s supply curve shifts leftward.
E) Both the supply curve and the demand curve shift leftward.
125) Which of the following best describes an externality?
A) something that is external to the economy
B) a sales tax on a good in addition to the market price
C) an effect of a transaction felt by someone other than the buyer or seller
D) anything produced in other countries
E) a change from what is normal
126) The cost of producing an additional unit of a good or service that is borne by the producer of that good or service
A) always equals the benefit the consumer derives from that good or service.
B) equals the cost borne by people other than the producer.
C) is the marginal private cost.
D) is the external cost.
E) is the marginal social cost.
127) The cost of producing an additional unit of a good or service that falls on people other than the producer is
A) the marginal cost.
B) represented by the demand curve.
C) represented by the supply curve.
D) the marginal external cost.
E) the marginal social cost.
128) Which of the following is an example of an activity that creates an external cost?
i.a smoker emitting second-hand smoke
ii.sulfur emitting from a smoke stack
iii.throwing garbage on the roadside
A) i only
B) i and ii
C) iii only
D) ii and iii
E) i, ii, and iii
129) The marginal cost of production that is borne by the entire society is called the marginal
A) private cost.
B) social cost.
C) external cost.
D) public cost.
E) user cost.
130) If the marginal private cost of producing one kilowatt of power in California is ten cents and the marginal social cost of each kilowatt is fourteen cents, then the marginal external cost equals ________ per kilowatt.
A) ten cents
B) nineteen cents
C) four cents
D) zero cents
E) fourteen cents
131) When the production of a good has a marginal external cost, which of the following occurs in an unregulated market?
i.Overproduction relative to the efficient level will occur.
ii.The market price is less than the marginal social cost at the equilibrium quantity.
iii.A deadweight loss occurs.
A) i only
B) ii only
C) iii only
D) i and ii
E) i, ii, and iii
132) The Coase theorem is the proposition that if property rights exist and are enforced, private transactions are
A) inefficient.
B) efficient.
C) inequitable.
D) illegal.
E) unnecessary.
133) A marketable permit
A) allows firms to pollute all they want without any cost.
B) allows firms to buy and sell the right to pollute at government controlled prices.
C) eliminates pollution by setting the price of pollution permits above the marginal cost of polluting.
D) allows firms to buy and sell the right to pollute.
E) is the Coase theorem solution to pollution.
134) If a polluting producer is forced to pay a pollution charge, what is the effect on the supply and demand curves for the product?
A) The quantity supplied along the firm’s supply curve increases.
B) The firm’s demand curve shifts leftward.
C) The firm’s supply curve shifts rightward.
D) The firm’s supply curve shifts leftward.
E) Both the supply curve and the demand curve shift leftward.
