Microeconomics: Principles for a Changing World Chapter 13- Externalities and pu

Question

Microeconomics: Principles for a Changing World Chapter 13- Externalities and public goods-Chiang This is a 4-part Multiply Choice Question. Please if you do not intend to answer all parts please do not answer it. Thank you. Note: I have had several incorrect answers in Economics questions I have asked recently, so please make sure your answer is correct if you answer it. Thanks again.

Part A. All of these are considered negative externalities, EXCEPT:

overstock of a flu vaccine.

cigarette smoke.

noise from a neighbor's house.

dogs barking.

Part B. Which discount rate would result in society devoting the most resources to long-run environmental management?

1%

2%

4%

3%

society would be better off with zero pollution.

society would be better off if emissions were increased.

command and control policies should always be used

society would be better off if emmissions were reduced.

Part A. All of these are considered negative externalities, EXCEPT:

overstock of a flu vaccine.

cigarette smoke.

noise from a neighbor's house.

dogs barking.

Part C. (Table) Based on the table, if the marginal benefit increased by S300,000 at each level the new al quantity would be Quantity of Pollution Abatement 1,000 1,500 2.000 2,500 Marginal Cost Marginal Benefits 150,000 200,000 300,000 450,000 550,000 400,000 300,000 150,000 C 1,000 1,500 2,500 2,000 Part D. If the marginal damage caused by a certain type of pollution is $100 billion and the marginal cost of abatement is $180 billion, then:

Explanation / Answer

1) (a) overstock of a flu vaccine.

because overstock of a flu vaccine is not a negative externality.

2) (a) 1%

3) (c) 2000

because at this quantity of pollution marginal benefit is equal to marginal benefit.

4) (b) society would be better off if emmisions were increases

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