Consider a market where production of the good is creating a negative externality. In the market equilibrium, there is a deadweight loss because the O social cost is greater than the internal benefit. O internal benefit is not equal to the external benefit. O internal cost of production is less than the social cost. internal benefit is less than the internal cost. O internal cost of production is not equal to the internal benefit.

Q68

Price Ssocial Sinternal $7.00 $6.00 $5.00 D $4.00 Dinternal 3,000 3,500 Quantity externality. In the market shown in the diagram above, there is a Select one: a. negative production b. negative consumption c. positive production d. positive consumption

Crying babies on an airplane impose a negative externality on those sitting around them.The airline can force the parents of the babies to internalize the cost by Select one: O a. Charging a higher ticket fee for babies and young children. O b. imposing a minimum flying age of 5 years old. O c. evenly dispersing the babies and young children throughout the plane. O d. seating all parents, babies and young children in the same section of the plane. O e. providing discount tickets for babies and young children. Next page ge n this page

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The production Compact Fluorescent Lightbulbs (CFL) use mercury in their production process. Mercury is a heavy metal and considered bad for the environment. Suppose the marginal external cost is $5 per lightbulb and the government levies a corrective tax of $5.50 per lightbulb. With this new tax: Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b Question 4 с d The price will be below the marginal social cost. Not enough light bulbs will be produced. The price will be below the marginal social benefit. The price will be below the marginal cost to produce light bulbs.

Which activity generates a negative externality? O The only two hardware stores in town agree to form a cartel and fix prices. O You buy a neA Lexus and then discover it needs a new alternator. O After Judith buys life insurance, she begins skydiving classes on the weckends. O Your neighbor starts his noisy construction project at 6:00 a.m. on weekends.

What is an external benefit? An external benefit is a benefit that OA. always equals external cost OB. experiences increasing marginal returns C. affects someone other than the buyer of a good OD. is greatest at the equilibrium point

Incorrect Question 25 A Pigovian subsidy... raises the cost of a good to consumers. O increases production costs. O increases the equilibrium quantity of a good. internalizes the negative externality from producing a good. raises revenues that can be used for public purposes.

Suppose scientific research generates external benefits. Without government intervention, the market for scientific research would A) produce the efficient amount. B) produce more than the efficient amount. O C) produce some research, but less than the efficient amount. D) produce zero research. E) either produce more than or less than the efficient amount depending on whether the external benefit is on the production or consumption of the research.