econ 101 - dudley exam 3
Questions and Answers 100%
Pass |UPDATED
Negative Externality - CORRECT ANSWER-an uncompensated cost that an
individual or firm imposes on others (aka external cost)
Qmkt vs Qopt: the market quantity is at the intersection of supply and demand,
but the optimal quantity is at the intersection of supply+external MC and demand
Positive Externality - CORRECT ANSWER-a benefit that an individual or firm
confers on others without receiving compensation (aka external benefit)
Qmkt vs Qopt: the market quantity is at the intersection of supply and demand,
but the optimal quantity is at the intersection of supply and demand+external MB
Marginal Damage Cost - CORRECT ANSWER-The cost of the damage caused by
emitting an additional unit of pollution (Similar to the Marginal Social Cost of
Pollution)
, Marginal Abatement Cost - CORRECT ANSWER-The cost of eliminating an
additional unit of pollution (opposite of the Marginal Social Cost of Pollution)
Coase Theorem (false) - CORRECT ANSWER-In the presence of externalities, an
economy can always reach an efficient solution provided that the transaction costs
of making a deal are sufficiently low (aka internalizing the externality)
3 forms of Government Intervention - CORRECT ANSWER-Environmental
standards
Emissions tax (aka Pigouvian Tax)
Tradable emissions permits
Environmental standards - CORRECT ANSWER-rules that protect the
environment by specifying actions by producers and consumers
Emissions tax (aka Pigouvian Tax) - CORRECT ANSWER-a tax that depends on
the amount of pollution a firm produces
Tradable emissions permits - CORRECT ANSWER-licenses to emit limited
quantities of pollutants that can be bought and sold by polluters
Production function - CORRECT ANSWER-Relationship between the quantity of
inputs a firm uses and the quantity of output produced (can be fixed or variable)
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
Questions and Answers 100%
Pass |UPDATED
Negative Externality - CORRECT ANSWER-an uncompensated cost that an
individual or firm imposes on others (aka external cost)
Qmkt vs Qopt: the market quantity is at the intersection of supply and demand,
but the optimal quantity is at the intersection of supply+external MC and demand
Positive Externality - CORRECT ANSWER-a benefit that an individual or firm
confers on others without receiving compensation (aka external benefit)
Qmkt vs Qopt: the market quantity is at the intersection of supply and demand,
but the optimal quantity is at the intersection of supply and demand+external MB
Marginal Damage Cost - CORRECT ANSWER-The cost of the damage caused by
emitting an additional unit of pollution (Similar to the Marginal Social Cost of
Pollution)
, Marginal Abatement Cost - CORRECT ANSWER-The cost of eliminating an
additional unit of pollution (opposite of the Marginal Social Cost of Pollution)
Coase Theorem (false) - CORRECT ANSWER-In the presence of externalities, an
economy can always reach an efficient solution provided that the transaction costs
of making a deal are sufficiently low (aka internalizing the externality)
3 forms of Government Intervention - CORRECT ANSWER-Environmental
standards
Emissions tax (aka Pigouvian Tax)
Tradable emissions permits
Environmental standards - CORRECT ANSWER-rules that protect the
environment by specifying actions by producers and consumers
Emissions tax (aka Pigouvian Tax) - CORRECT ANSWER-a tax that depends on
the amount of pollution a firm produces
Tradable emissions permits - CORRECT ANSWER-licenses to emit limited
quantities of pollutants that can be bought and sold by polluters
Production function - CORRECT ANSWER-Relationship between the quantity of
inputs a firm uses and the quantity of output produced (can be fixed or variable)
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
