Question

In: Economics

QUESTION 19 Emission controls on automobiles are an example of a a. policy to reduce congestion...

QUESTION 19

Emission controls on automobiles are an example of a

a.

policy to reduce congestion on urban freeways.

b.

corrective tax.

c.

command-and-control policy to increase social efficiency.

d.

policy that reduces pollution by allocating resources through market mechanisms.

4 points   

QUESTION 20

A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x,

a.

social value = private value = private cost < social cost.

b.

social cost = private cost = private value = social value.

c.

private cost < social cost = private value = social value.

d.

social cost = private cost = private value < social value.

4 points   

QUESTION 21

When a policy succeeds in giving buyers and sellers in a market an incentive to take into account the external effects of their actions, the policy is said to

a.

externalize the actions of the buyers and sellers.

b.

internalize the externality.

c.

equalize private cost and external cost.

d.

equalize private value and private cost.

4 points   

QUESTION 22

A corrective tax

a.

can be used to internalize a negative externality.

b.

imposed on sellers shifts the supply curve to the left.

c.

imposed on buyers shifts the demand curve to the left.

d.

All of the above are correct.

4 points   

QUESTION 23

The difference between social cost and private cost is a measure of the

a.

cost incurred by the government when it intervenes in the market.

b.

cost reduction when the negative externality is eliminated.

c.

cost of an externality.

d.

loss in profit to the seller as the result of a negative externality.

4 points   

QUESTION 24

When the government uses a command-and-control policy to solve an externality, it

a.

is usually the most effective policy option available.

b.

usually involves taxing the consumption of a commodity.

c.

creates policies that directly regulate behavior.

d.

typically refers to the Coase theorem to structure the policy.

4 points   

QUESTION 25

A negative externality will cause a private market to produce

a.

less than the same market would produce in the presence of a positive externality.

b.

more than is socially desirable.

c.

less than is socially desirable.

d.

exactly the quantity that is socially desirable.

Solutions

Expert Solution

QUESTION 19

Emission controls on automobiles are an example of a command-and-control policy to increase social efficiency. (option c)

QUESTION 20

A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x, then social value = private value = private cost < social cost. (option A)

QUESTION 21

When a policy succeeds in giving buyers and sellers in a market an incentive to take into account the external effects of their actions, the policy is said to internalize the externality. (option B)

QUESTION 22

A corrective tax can be used to internalize a negative externality. (option A)

QUESTION 23

The difference between social cost and private cost is a measure of the cost of an externality. (option C)

QUESTION 24

When the government uses a command-and-control policy to solve an externality, creates policies that directly regulate behavior. (option C)

QUESTION 25

A negative externality will cause a private market to produce more than is socially desirable. (option b)


Related Solutions

Although cities encourage carpooling to reduce traffic congestion, most vehicles carry only one person. For example,...
Although cities encourage carpooling to reduce traffic congestion, most vehicles carry only one person. For example, 79% of vehicles on the roads are occupied by just the driver. (Round your answers to four decimal places.) (a) If you choose 10 vehicles at random, what is the probability that more than half (that is, 6 or more) carry just one person? (b) If you choose 108 vehicles at random, what is the probability that more than half (that is, 55 or...
What is monetary policy? Who controls Monetary Policy? Provide an example when the Federal Reserve might...
What is monetary policy? Who controls Monetary Policy? Provide an example when the Federal Reserve might use an expansionary policy ( increase the money supply). What three tools will they use and HOW would they use them to achieve their goal? For example, one tool that they could use is to reduce the reserve ratio. Provide an example of when the Federal Reserve might use a tight monetary policy (decrease the money supply). Explain how they might use the three...
With increasing congestion and the level of pollution in major cities, governments are trying to reduce...
With increasing congestion and the level of pollution in major cities, governments are trying to reduce the regular use of cars and encourage the use of public transport to travel to work. The following table presents data on the methods of travel used by Australian workers by age groups collected during on the census night for CENSUS 2016. The data are stored in file Assignmen Dataset.XLS, TRAVEL sheet available in the Written Assignment folder. Using this data and EXCEL, answer...
With increasing congestion and the level of pollution in major cities, governments are trying to reduce...
With increasing congestion and the level of pollution in major cities, governments are trying to reduce the regular use of cars and encourage the use of public transport to travel to work. The following table presents data on the methods of travel used by Australian workers by age groups collected during on the census night for CENSUS 2016. The data are stored in file Assignmen Dataset.XLS, TRAVEL sheet available in the Written Assignment folder. Using this data and EXCEL, answer...
Traffic congestion seems to worsen each year. This raises the question, How much does roadway congestion...
Traffic congestion seems to worsen each year. This raises the question, How much does roadway congestion cost the United States annually? The Federal Highway Administration's Highway Performance Monitoring System conducts an analysis to produce an estimate of the total cost. Drivers in the 73 most congested areas in the United States were sampled, and each driver's congestion cost in time and gasoline was recorded. The total number of drivers in these 73 areas was 128,000,000. a. Estimate with 95% confidence...
In the market of ferrari automobiles, the tax policy of italian government is:
In the market of ferrari automobiles, the tax policy of italian government is:
Some companies and municipalities are switching to a four-day workweek to reduce traffic congestion, air pollution,...
Some companies and municipalities are switching to a four-day workweek to reduce traffic congestion, air pollution, and stressed employees. Compressing the workweek into four 10-hour days sounds pretty good to you. You would much prefer having Friday free to schedule medical appointments and take care of family business, in addition to leisurely three-day weekends. As a manager at Skin Essentials, a mineral-based skin care products and natural cosmetics company, you are convinced that the company’s 200 employees could switch to...
Suppose we all agree that the emission of carbon into the atmosphere is a policy problem...
Suppose we all agree that the emission of carbon into the atmosphere is a policy problem .Further, assume we know that the private marginal cost of a ton of Co2 is $17 while the true social marginal cost of a ton of carbon is $32. Clearly layout a policy of carbon taxes that would result in the socially optimal level of carbon emissions. Demonstrate your argument graphically and carefully explain. Evaluate the relative costs and benefits of carbon taxes relative...
Q19 Time lags in expansionary monetary policy can cause Question 19 options: short-term monetary policy to...
Q19 Time lags in expansionary monetary policy can cause Question 19 options: short-term monetary policy to work more effectively than long-term targeting. difficulty in the timing of appropriate policy and can even lead to destabilization. an undesirable inflationary gap if there is an unexpected increase in exports. monetary expansions to work very quickly but cause monetary contractions to work very slowly. Both (B) and (C).
2. Consider a health policy that aims to reduce obesity in society and thereby reduce the...
2. Consider a health policy that aims to reduce obesity in society and thereby reduce the rate of cardiac disease in 20 years’ time. Discuss the issues associated with conducting a cost-benefit analysis into this policy proposal. Your answer should include discussion of quantifying benefits and costs as well as other technical issues that would need to be dealt with.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT