Microeconomics: Principles for a Changing World Chapter 13- Externalities and pu
ID: 1112495 • Letter: M
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. Which of the following is NOT a reason why standards for reducing pollution are popular?
They lead each firm to have the same abatement costs.
They are simple.
They prevent competing firms from polluting.
They are cheaper than market-based policies.
Part B. In a 2008 case before the Supreme Court regarding older power plants and how best to protect fish and aquatic organisms, Justice David Souter remarked, “The difficulty that I have is if you are going to apply . . . a cost-benefit analysis, I'm not sure how it would work. Are a thousand plankton worth a million dollars?” Justice Souter's question points out the difficulty of:
measuring nonmarket or intangible aspects of public projects.
the nonexclusive characteristic of public goods.
measuring the appropriate discount rate for public projects.
the nonrival characteristic of public goods.
Part C. If air pollution comes from multiple sources and it causes many people to suffer, then an efficient agreement among the parties is difficult to achieve because:
social costs are high.
production costs would be high.
pollution costs are high.
transaction costs are high.
Part D. Mike constructed a beautiful backyard landscape. He also built a tall wooden fence around his yard. With the fence in place, the good that the landscape brings to the neighborhood becomes a:
private good because Mike pays for the landscaping out of his own pocket.
private good because Mike can exclude people from enjoying the landscape.
public good because there is still nonrivalry in seeing the landscape.
public good because the landscape is part of nature.
Part A. Which of the following is NOT a reason why standards for reducing pollution are popular?
They lead each firm to have the same abatement costs.
They are simple.
They prevent competing firms from polluting.
They are cheaper than market-based policies.
Explanation / Answer
Part A. They lead each firm to have the same abatement cost
Pat B. measuring non market or intangible aspects of public projects.
Part C. transaction cost are high.
Part d. private good because Mike can exclude people from enjoying the landscape.