Question 47 of 50

What is the term for the uncompensated impact of one person's actions on the well-being of a bystander?

If the impact of an externality on a bystander is beneficial, it is called a:

In the presence of a negative externality like pollution, how does the social cost of a good compare to the private cost?

In a market with a negative externality, the market equilibrium quantity (Q MARKET) is:

What is the term for altering incentives so that people take into account the external effects of their actions?

In the case of a positive externality, how does the social value of a good relate to the private value?

What is the appropriate government policy response to a positive externality like education?

A technology spillover is an example of what kind of externality?

What is the primary reason economists usually prefer corrective taxes to command-and-control regulations for dealing with pollution?

Taxes enacted to deal with the effects of negative externalities are often called:

In the example of the paper mill and steel mill, if the EPA levies a $50,000 tax per ton of glop, which factory will reduce its pollution more?

What is the key difference between corrective taxes and most other taxes discussed in Chapter 8?

According to the 2007 study mentioned in the chapter, what was the optimal corrective tax on gasoline in the United States, compared to the actual tax?

When the EPA uses tradable pollution permits, what does the supply curve for pollution rights look like?

What is the core proposition of the Coase theorem?

According to the Coase theorem, why does the initial distribution of rights not matter for reaching an efficient outcome?

What are transaction costs?

Why do private solutions to externalities often fail when the number of interested parties is large?

Which of the following is given as an example of a command-and-control policy to address an externality?

What is a primary reason economists are critical of industrial policy aimed at subsidizing industries with technology spillovers?

In the case study about the paper mill and steel mill, the EPA considers requiring each factory to reduce pollution to 300 tons per year. What type of policy is this?

When the government sets a price on the right to pollute via a corrective tax, the demand curve for pollution rights determines what?

When the government limits the quantity of pollution by issuing tradable permits, what determines the price of pollution?

The story of Dick's barking dog, Spot, and his neighbor Jane is used to illustrate which economic concept?

In the example of Dick and Jane, if Dick gets a $500 benefit from his dog and Jane bears an $800 cost from the barking, what is the efficient outcome?

A local drama company's theater creates traffic, costing the community $5 per ticket. This is an example of a:

If the external benefit of a fire extinguisher is $10, what government policy would yield the efficient outcome?

Why might an economist argue that a clean environment is a normal good?

What is the primary shortcoming of command-and-control policies, like uniform pollution reduction, according to economists?

What is the primary message of the 'In the News' feature titled 'The Externalities of Country Living'?

In the Dick and Jane example, if Dick values his dog at $1,000 and Jane bears a cost of $800 from barking, what will happen if Jane has the legal right to peace and quiet?

The example of the Golden Rule ('Do unto others as you would have them do unto you') is presented in the chapter as a private solution to externalities based on:

In the market for a good with a negative externality, the social-cost curve lies above the supply curve because:

How can patent protection help solve the problem of technology spillovers?

In the case of a positive externality, the market produces a quantity that is too small because:

A glue factory and a steel mill emit smoke. In response, the town government requires that both reduce emissions by 50 percent. This is an example of:

If a government were to auction tradable pollution permits, the final price of the permits would be determined by:

The example of the apple grower and the beekeeper, whose activities each confer a positive externality on the other, is used to illustrate which type of private solution?

The 'In the News' article 'Cap and Trade' suggests that giving away carbon allowances for free instead of auctioning them has what primary negative consequence?

Greater consumption of alcohol leads to more motor vehicle accidents. This imposes a cost on people who do not drink and drive. What is the deadweight loss in the market for alcohol?

Which of the following statements about corrective taxes is presented as a reason they are often preferred over regulations?

If two factories can trade pollution permits, a factory for which reducing pollution is very expensive will likely:

Senator Edmund Muskie's comment, 'We cannot give anyone the option of polluting for a fee,' represents a viewpoint that is critical of which approach to pollution?

How do private markets with externalities compare to the social optimum?

The example of a barking dog creating a negative externality for a neighbor falls under which category of solution if the neighbors agree on a payment for the dog to be quieted?

The Club, a steering wheel lock, makes a car harder to steal. LoJack, a tracking system, makes it easier for police to catch a car thief. Which of these creates a positive externality for other car owners?

If a steel mill has a high cost of reducing pollution and a paper mill has a low cost, and they can trade pollution permits, what is the likely outcome?

What is the economic argument against the idea that clean air and water are fundamental rights that should be protected regardless of cost?

In the case of a market with a positive externality, a benevolent social planner would choose a quantity where: