A demand curve for a good reflects the A) average benefit of each additional uni

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A demand curve for a good reflects the A) average benefit of each additional unit consumed
B) average cost of each additional unit consumed
C) marginal cost of each additional unit consumed
D) marginal benefit of each additional unit consumed
A demand curve for a good reflects the A) average benefit of each additional unit consumed
B) average cost of each additional unit consumed
C) marginal cost of each additional unit consumed
D) marginal benefit of each additional unit consumed
A demand curve for a good reflects the A demand curve for a good reflects the 2. Consider the graph above. If this market is currently producing an output level of Q2, total economic surplus would increase if 3. The graph above shows the market for paper. The marginal social cost is higher than the marginal private cost 4. A steel factory emits air pollution and as a result a negative externality exists. If the government forces the steel factory to internalize the externality, A) the demand for steel will decrease
B) the demand for steel will increase
C) the supply of steel will increase
D) the supply of steel will decrease
4. A steel factory emits air pollution and as a result a negative externality exists. If the government forces the steel factory to internalize the externality, A) the demand for steel will decrease
B) the demand for steel will increase
C) the supply of steel will increase
D) the supply of steel will decrease
A steel factory emits air pollution and as a result a negative externality exists. If the government forces the steel factory to internalize the externality, A steel factory emits air pollution and as a result a negative externality exists. If the government forces the steel factory to internalize the externality, 5. Consider the graph above. This graph shows the externality in the market for steel. In order to efficiently internalize this externality, the government could 6. The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by A) direct government regulation
B) issuing tradable pollution permits to each power plant
C) encouraging private bargaining between the power plants and the parties affected by the pollution
D) taxing power plant emissions
6. The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by A) direct government regulation
B) issuing tradable pollution permits to each power plant
C) encouraging private bargaining between the power plants and the parties affected by the pollution
D) taxing power plant emissions
The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by 7. When a good is %u201Cnonexcludable%u201D it means that A) one person%u2019s use of a good does not diminish the amount available for others to consume
B) one person%u2019s use of a good diminishes the amount available for others to consume
C) the owner of the good can prevent others from consuming the good
D) the owner of the good cannot prevent others from consuming the good
7. When a good is %u201Cnonexcludable%u201D it means that A) one person%u2019s use of a good does not diminish the amount available for others to consume
B) one person%u2019s use of a good diminishes the amount available for others to consume
C) the owner of the good can prevent others from consuming the good
D) the owner of the good cannot prevent others from consuming the good
When a good is %u201Cnonexcludable%u201D it means that When a good is %u201Cnonexcludable%u201D it means that 8. The marginal cost of providing 25 neighborhood street lamps is $2000. There are 3 people living in the neighborhood. Person 1 is willing to pay $800 for the 25 lamps and person 2 is willing to pay $300 for the 25 street lamps. Efficiency requires that 25 lamps be provided. What is the minimum amount person 3 is willing to pay for 25 street lamps? A) $800
B) $900
C) $1100
D) $2000
8. The marginal cost of providing 25 neighborhood street lamps is $2000. There are 3 people living in the neighborhood. Person 1 is willing to pay $800 for the 25 lamps and person 2 is willing to pay $300 for the 25 street lamps. Efficiency requires that 25 lamps be provided. What is the minimum amount person 3 is willing to pay for 25 street lamps? A) $800
B) $900
C) $1100
D) $2000
The marginal cost of providing 25 neighborhood street lamps is $2000. There are 3 people living in the neighborhood. Person 1 is willing to pay $800 for the 25 lamps and person 2 is willing to pay $300 for the 25 street lamps. Efficiency requires that 25 lamps be provided. What is the minimum amount person 3 is willing to pay for 25 street lamps? The marginal cost of providing 25 neighborhood street lamps is $2000. There are 3 people living in the neighborhood. Person 1 is willing to pay $800 for the 25 lamps and person 2 is willing to pay $300 for the 25 street lamps. Efficiency requires that 25 lamps be provided. What is the minimum amount person 3 is willing to pay for 25 street lamps? 9. It is difficult to provide the efficient quantity of a public good since efficiency would require that the government A) know everyone in society%u2019s willingness to pay
B) tax society in order to provide public goods
C) put up with free-riders
D) use inefficient private markets to provide public goods to society
9. It is difficult to provide the efficient quantity of a public good since efficiency would require that the government A) know everyone in society%u2019s willingness to pay
B) tax society in order to provide public goods
C) put up with free-riders
D) use inefficient private markets to provide public goods to society
It is difficult to provide the efficient quantity of a public good since efficiency would require that the government It is difficult to provide the efficient quantity of a public good since efficiency would require that the government 10. The classic case of adverse selection is the market for A) health insurance
B) lemons and oranges
C) used cars
D) new cars
10. The classic case of adverse selection is the market for A) health insurance
B) lemons and oranges
C) used cars
D) new cars
The classic case of adverse selection is the market for The classic case of adverse selection is the market for A demand curve for a good reflects the A) average benefit of each additional unit consumed
B) average cost of each additional unit consumed
C) marginal cost of each additional unit consumed
D) marginal benefit of each additional unit consumed
2. Consider the graph above. If this market is currently producing an output level of Q2, total economic surplus would increase if A) production decreased to Q0
B) economic surplus is already maximized at Q2, so changing the output level would only decrease total economic surplus
C) production increased to Q3
D) production decreased to Q1
3. The graph above shows the market for paper. The marginal social cost is higher than the marginal private cost A) since the marginal social cost includes all the costs of production, including the value of the externality
B) since the marginal private cost includes all the costs of production, including the value of the externality
C) because there is no externality in this market
D) because for each level of production the social cost is less than the private cost
4. A steel factory emits air pollution and as a result a negative externality exists. If the government forces the steel factory to internalize the externality, A) the demand for steel will decrease
B) the demand for steel will increase
C) the supply of steel will increase
D) the supply of steel will decrease
5. Consider the graph above. This graph shows the externality in the market for steel. In order to efficiently internalize this externality, the government could A) tax the producer
B) subsidize the producer
C) subsidize the consumer
D) legislate minimum production levels
6. The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by A) direct government regulation
B) issuing tradable pollution permits to each power plant
C) encouraging private bargaining between the power plants and the parties affected by the pollution
D) taxing power plant emissions
7. When a good is %u201Cnonexcludable%u201D it means that A) one person%u2019s use of a good does not diminish the amount available for others to consume
B) one person%u2019s use of a good diminishes the amount available for others to consume
C) the owner of the good can prevent others from consuming the good
D) the owner of the good cannot prevent others from consuming the good
8. The marginal cost of providing 25 neighborhood street lamps is $2000. There are 3 people living in the neighborhood. Person 1 is willing to pay $800 for the 25 lamps and person 2 is willing to pay $300 for the 25 street lamps. Efficiency requires that 25 lamps be provided. What is the minimum amount person 3 is willing to pay for 25 street lamps? A) $800
B) $900
C) $1100
D) $2000
9. It is difficult to provide the efficient quantity of a public good since efficiency would require that the government A) know everyone in society%u2019s willingness to pay
B) tax society in order to provide public goods
C) put up with free-riders
D) use inefficient private markets to provide public goods to society
10. The classic case of adverse selection is the market for A) health insurance
B) lemons and oranges
C) used cars
D) new cars

Explanation / Answer

marginal benefit of each additional unit consumed

economic surplus is already maximized at Q2, so changing the output level would only decrease total economic surplus

since the marginal social cost includes all the costs of production, including the value of the externality

the supply of steel will decrease

tax the producer

issuing tradable pollution permits to each power plant

the owner of the good cannot prevent others from consuming the good

$900

know everyone in society's willingness to pay

health insurance

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