ECON 260 Figure#3: The Impact of Externality from a Producer 8.5 7.5 6.5 13 Deme
ID: 1104410 • Letter: E
Question
ECON 260 Figure#3: The Impact of Externality from a Producer 8.5 7.5 6.5 13 Demend 100 200 300 400 500 600 709 800 909samnty 14. Refer to Figure #3. What is the socially-optimal quantity of output in this market? a. 200 units. b. Between 200 and 450 units. c.500 units d. Between 500 and 650 units. 15. Refer to Figure #3. If the govemment wanted internalize the externality to achieve the socially optimal level of output bow large would the per unit tax need to be? a. $2. b. Less than $2 c. More than $2 d. The size of the subsidy cannot be determined from the figure. 16. Refer to Figure 3. If the government wanted internalize the externality to achieve the socially-optimal level of output, how much is the tax revenue? a. $500. b$1000. c.$$1500. d. The size of the tax revenue cannot be determined from the figure. 17. A private good is both rivalry in consumption and excludable, which of the following would NOT be considered a private good? a. pizza. b. I-phone 8 d. a hiking trail. c. french fries. 18. Goods that are meither excludable nor rival in consumption would be considered public goods. Which of the following would be considered a public good a national park b. TV or internet cable hiking trail. c. a bicycle. d. a boat. 19. Goods that are both non-excludable and rival in consumption would be considered common resources. Which of the following goods is a common resource? a. national defense c. a private resource. b. cable TV service. d. long leg crabs in the ocean. 20. Fire protection is a good example of a natural monopoly or club good because a. protecting one house is unlikely to reduce the protection available to others. b. it is rival in consumption c. it is non-excludable. d. All of the above are correct. 21. A free rider is a person who receives the benefit of a good but avoids paying for it. A freerider problem exists for any good that is not excludable. When goods are not excludable a. the goods will not be produced since no one values them b. the free-rider problem prevents the private market from supplying them c. the free-rider problem encourages the private market to supply them abundantly d. the private market will produce the goods but will charge less for them than if they are produced as public goods RMUNNICHAExplanation / Answer
14. 500units
15.less than $2
16.$1000
17.a hiking trail
18.national park
19.cable TV service
20. C it is non - EXCLUDABLE.
21. B
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