Chapter 4 example #18374

Economists say competitive markets are efficient because...

Which of the following statements is true?

Public Good is:

Public goods are not privately provided because:

The free-rider problem occurs when:

Is the U.S. border patrol a public or private good? How about satellite TV?

When negative externalities exist at a market,

The government could correct the difference between the equilibrium output level and the efficient output level by...

An example of an external benefit is...

Spillover costs and spillover benefits are also called negative and positive externalities because

The Lojack car recovery system allows the police to track stolen cars. As a result, they not only recover 90% of Lojack-equipped cars that are stolen but also arrest many auto thieves and shut down many "chop shops" that take apart stolen vehicles to get at their used parts. Thus, Lojack provides both private benefits and positive externalities. If the government were to subsidize Lojack purchases, this would...

Zoning laws might be justified in dealing with a problem of negative externalities because they can...

In the case of positive externalities, tax breaks for businesses that set up in areas of high unemployment might be justified because

Excise taxes on beer would:

Consider a carbon-tax and a cap-and-trade strategy for reducing carbon dioxide and other so-called greenhouse gases. This is true about this statement-->

Efficiency losses:

A production possibilities curve shows that public goods on the vertical axis and private goods on the horizontal axis. Assuming the economy is initially operating on the curve at point C, indicate how the production of public goods might be increased.

How might the output of public goods be increased if the economy is initially operating at point A inside the curve?

Use the distinction between the characteristics of private and public goods to determine whether the following should be produced through the market system or provided by government:

Overallocation of resources:

Tammy installs a very nice front garden, raising the property values of all the other houses on her block:

Market demand curves are too far to the left (too low):

Underallocation of resources:

Water pollution from a factory forces neighbors to buy water purifiers:

Use marginal cost/marginal benefit analysis to determine if the following statement is true or false: "The optimal amount of pollution abatement for some substances, say, dirty water from storm drains, is very low; the optimal amount of abatement for other substances, say, cyanide poison, is close to 100 percent."