When externalities exist in a market, buyers and sellers O neglect the external effects of their actions, but the market equilibrium is still efficient do not neglect the external effects of their actions, but the market equilibrium is still efficient actions do not create any external effects, but the market equilibrium is still efficient neglect the external effects of their actions, and the market equilibrium is not efficient do not neglect the external effects of their actions, and the market equilibrium is not efficient O actions do not create any external effects, and the market equilibrium is not efficient

When externalities exist in a market, buyers and sellers O neglect the external effects of their actions, but the market equilibrium is still efficient do not neglect the external effects of their actions, but the market equilibrium is still efficient actions do not create any external effects, but the market equilibrium is still efficient neglect the external effects of their actions, and the market equilibrium is not efficient do not neglect the external effects of their actions, and the market equilibrium is not efficient O actions do not create any external effects, and the market equilibrium is not efficient

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 2.3P: (Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the...

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Incorrect Question 4 What areas in the above graph represent the externality damage from a negative externality without any regulation? Price Social Marginal Cost A Supply В EIF IG D Demand Quantity O A+B+C O D+E O C+D+G O D+E+F+G O D+E+F+G+H
1. For purposes of this question, note that pecuniary externalities are not typically considered to be a standard externality. The global supply of a popular chili sauce is largely or exclusively manufactured by one factory in California. a. Suppose that when this factory opened, it purchased a large tract of land and then began buying inputs like machines and peppers from nearby firms. Further suppose these purchases caused nearby land and housing values to increase, squeezing nearby renters. Is that increase an externality the way it is usually defined? In 1-2 sentences, why or why not? b. Production of this chili sauce uses large quantities of peppers, and suppose the factory installs a new ventilation system that emits particles from pepper processing to the neighborhood, causing neighbors’ eyes and throats to suffer, and then nearby home values fall. Is that decrease in home values an externality the way it is usually defined? In one sentence, why or why not?
on 7 When externalities exist, buyers and sellers red Select one: d out of a. neglect the external effects of their actions and the market equilibrium is efficient b. do not neglect the external effects of their actions and the market equilibrium is efficient on c. neglect the external effects of their actions and the market equilibrium is not efficient O d. do not neglect the external effects of their actions and the market equilibrium is not efficient on 8 A positive consumption externality will cause a market to red Select one: d out of a. produce less than is socially desirable O b. produce more than is socially desirable on c. produce more than is market optimal O d. produce less than is market optimal on 9 If only a few people are affected by an externality red Select one: d out of a. then it is likely that Pigovian taxes will provide the most efficient solution to the externality O b. then it is likely that command and control regulation will provide the most efficient solution…
(Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the activity that creates that externality. When the amount of the externality produced per unit of output increases as output increases, the correct tax can be determined by using a demand-supply diagram; show this. Assume that the marginal private cost curve slopes upward. Negative Externalities: The Market for Electricity in the Midwest:
Classify the following pollution-control policies as command-and-control or market incentive based. A state emissions tax on the quantity of carbon emitted by each firm. The federal government requires domestic auto companies to improve car emissions by 2020. The EPA sets national standards for water quality. A city sells permits to films that allow them to emit a specified quantity of pollution. The federal government pays fishermen to preserve salmon.
Consider two ways of protecting elephants from poachers in African countries. In one approach, the government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all local people to enter the parks or to injure either the elephants or their habitat in any way. In a second approach, the government sets up national parks and designates 10 villages around the edges of the park as official tourist centers that become places where tourists can stay and bases for guided tours inside the national park. Consider the different incentives of local villagers-who often are very poor-in each of these plans. Which plan seems more likely to help the elephant population?
What is an externality?