Question :
Figure 5-6
Figure 5-6 shows the market for measles vaccinations, a : 1387489
Figure 5-6
Figure 5-6 shows the market for measles vaccinations, a product whose use generates positive externalities.
68) Refer to Figure 5-6. What does D2 represent?
A) the social welfare curve
B) the demand curve reflecting social benefit
C) the demand curve reflecting private benefit
D) the positive externalities curve
69) Refer to Figure 5-6. What is the market equilibrium output level?
A) Q1
B) Q2
C) Q1 + Q2
D) Q2 – Q1
70) Refer to Figure 5-6. What is the deadweight loss resulting from producing at the market equilibrium?
A) B + C
B) E + C
C) F
D) C
71) Refer to Figure 5-6. Why is there a deadweight loss?
A) because the marginal private benefit for each additional unit between Q1 and Q2 exceeds the marginal cost
B) because the marginal private cost for each additional unit between Q1 and Q2 exceeds the marginal private benefit
C) because the marginal social cost for each additional unit between Q1 and Q2 exceeds the marginal social benefit
D) because the marginal social benefit for each additional unit between Q1 and Q2 exceeds the marginal cost
Article Summary
According to a study by the Center for Neighborhood Technology, homes located within one-half mile of frequently-used public transportation held their value much better during the recent housing market downturn than did those without easy access to public transportation, and the greater home values reflect greater demand for neighborhoods in close proximity to public transportation. In addition to higher home values, the study found that close proximity to public transportation offers lower transportation costs, a wider variety of travel options, and access to more employment opportunities.
Source: Meg Handley, “Study: Proximity to Public Transit Boosts Home Values,” U.S. News & World Report, March 22, 2013.
72) Refer to the Article Summary. Higher home values which result from close proximity to public transportation are an example of a ________ due to the public transportation.
A) positive externality.
B) negative externality.
C) private cost.
D) social cost.
73) Refer to the Article Summary. People who do not use public transportation can still benefit from it, as is shown by the higher home values. As a result, the marginal social benefit from public transportation is ________ the marginal private benefit to those who use public transportation.
A) equal to
B) greater than
C) less than
D) unrelated to
74) An externality refers to economic events outside a market.
75) The private cost of a good or service is the cost borne by the producer.
76) A market failure arises when an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event.
77) When there is a positive externality in a free market, too much of the good is produced and consumed.
