Question : 11) Which of the following an example of a positive : 1245097

11) Which of the following is an example of a positive externality?

A) banning the sale of candy in elementary schools

B) planting trees along a sidewalk which add beauty and creates shade

C) forbidding the use of cell phones in public

D) prohibit street parking in all residential neighborhoods

12) A positive externality causes

A) the marginal social benefit to be equal to the marginal private cost of the last unit produced.

B) the marginal social benefit to be less than the marginal private cost of the last unit produced.

C) the marginal social benefit to exceed the marginal private cost of the last unit produced.

D) the marginal private benefit to exceed the marginal social cost of the last unit produced.

13) When a negative externality exists, the private market produces

A) more than the economically efficient output level.

B) less than the economically efficient output level.

C) products at a low opportunity cost.

D) products at a high opportunity cost.

14) Mandatory motorcycle helmet laws are designed to reduce the severity of injuries resulting from motorcycle involvement in traffic accidents. In this sense, these mandatory helmet laws are reducing ________ of risky behavior.

A) positive externalities

B) negative externalities

C) the private benefit

D) the social benefit

Figure 4-15

Figure 4-15 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2.

15) Refer to Figure 4-15. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient output is Q2. In that case, the diagram shows

A) the effect of a positive externality in the production of a good.

B) the effect of a negative externality in the production of a good.

C) the effect of an external cost imposed on a producer.

D) the effect of an external benefit such as a subsidy granted to consumers of a good.

16) Refer to Figure 4-15. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does S1 represent?

A) the market supply curve reflecting external cost

B) the market supply curve reflecting implicit cost

C) the market supply curve reflecting social cost

D) the market supply curve reflecting private cost

17) Refer to Figure 4-15. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does S2 represent?

A) the market supply curve reflecting private cost

B) the market supply curve reflecting social cost

C) the market supply curve reflecting external cost

D) the market supply curve reflecting implicit cost

Figure 4-16

Figure 4-16 shows a market with a negative externality.

18) Refer to Figure 4-16. The efficient output level is

A) Qd.

B) Qb.

C) Qa.

D) Qb – Qd.

19) Refer to Figure 4-16. The private profit maximizing quantity for the firm is

A) Qa.

B) Qb.

C) Qb – Qd.

D) Qd.

20) Refer to Figure 4-16. The deadweight loss due to the externality is represented by the area

A) abc.

B) abf.

C) abd.

D) ade.