哈维财政学英文题库 CHA1(4)

C) SMC = PMC + MD D) MSC = MPB E) MSB =MSC + MPB Ans: c

12. Marginal benefits are downward sloping when

A) there are no total benefits.B) the slope of the marginal benefits curve is negative.

C) total benefits are increasing at a decreasing rate.D) marginal costs are upward sloping. Ans: b

13. A Pigouvian subsidy

A) can not exist with externalities. B) is the same thing as a Pigouvian tax. C) is measured in terms of Pigouvian dollars.

D) moves production to the socially optimal level of output. Ans: d

14. As a general rule, zero pollution is not socially desirable because A) there would be no production.

B) the Environmental Protection Agency (EPA) needs to have something to do. C) no pollution would lead to global warming. D) all of the above. Ans: a

15. Externalities require government intervention when A) violence will result between disputing parties. B) there are only a few sellers in the market. C) property rights are not clearly established. D) the government imposes sales taxes. E) all of the above. Ans: c

16. Which method helps in obtaining the socially optimal level of output? A) Pigouvian taxesB) regulation

C) property rights and bargainingD) all of the aboveAns: d 17. Marginal damages

A) must always be considered in social marginal costs.B) must not be considered in social marginal costs.

C) must sometimes be considered in social marginal costs.D) have nothing to do with social marginal costs. Ans: a

18. A tax levied on each unit of pollution is

A) a income taxB) a emissions feeC) a flat taxD) an international taxAns: b 19. A cap-and-trade policy A) has a set number of permits

B) allows polluters to trade permitsC) caps the total level of pollution allowedD) all of the above

E) none of the above Ans: d

20. Command-and-control regulations

A) are less flexible than incentive based regulationsB) come from the private sector C) have technology standards a type of controlD) a & cE) a & b Ans: d

Essay

21. Suppose the factory Afro-Puffs Inc. produces wigs. As a by-product of this wig production, they also produce dangerous emissions of toxic gases (as a result of the strong glue used to hold the hair in place). The De-Lite car factory, down the road, experiences a negative externality from this production process. Suppose that the supply curve (private marginal costs) for the wig factory is X=(2/5)P- 2, and it faces a market demand of Xd=15 - P/2. The marginal damages caused by the production of wigs can be written as X=P – 1/2. (a.) Find the equilibrium price and quantity in the market for wigs.

(b.) Find the socially optimal level of wigs and the corresponding price. (c.) How much should the wig factory be taxed per wig?

Ans:

(a.) Set PMC equal to demand and solve for P and X. X= 50/9, P = 170/9.

(b.) Find SMC by adding PMC to MD. Set SMC equal to demand and solve for P and X. X = 49/11, P = 232/11.

(c.) At X = 49/11, subtract PMC from SMC. Tax = 109/22.

22. A steel factory has the right to discharge waste into a river. The waste reduces the number of fish, causing damage for swimmers. Let X denote the quantity of waste dumped. The marginal damage, denoted MD, is given by the equation MD = 2 + 5X. The marginal benefit (MB) of dumping waste is given by the equation MB = 34 – 3X. (a.) Calculate the efficient quantity of waste.

(b.) What is the efficient fee, in dollars per unit of waste, that would cause the firm to dump only an efficient quantity of waste?

(c.) What would be the quantity dumped if the firm did not care about the fishery? Ans:

(a.) Set MD = MB and solve for X. X= 32/6.

(b.) Insert 32/6 into either MD or MB. Fee = 86/3. (c.) Set MB equal to zero and solve for X. X = 34/3.

23. The private marginal benefit for commodity X is given by 15 – X, where X is the number of units consumed. The private marginal cost of producing X is constant at 10. In the absence of any government intervention, how much X is produced? What is the gain to society involved in moving from the inefficient to the efficient level of production?

Ans: Without intervention, optimal will be where PMB = 0. X = 15. The efficient level is X = 5. The area beneath the PMB is gained. Gain = 25.

24. Consider the case of two farmers, Tony and Hakim, depicted in the figure below. Both use DDT (a chemical pesticide) for their crops. The use of DDT causes an externality for swimmers down river from the farms.

(A) Show the amount of pesticides used if each uses the privately optimal level of pesticides. (B) Show the amount of pesticides used if they are socially concerned. (C) Why is a reduction back to XH = HT not socially desired?

Ans: (A)

(B)

C) Not socially optimal.

25. Redo discussion question 10, part a, from Chapter 5 in your book. Suppose emissions are limited to 25 units per year instead of 50. How does your answer change? Ans: Put 25 into demand equation. P = 7.5. 26. Externalities always work themselves out. A) True.B) False.C) Uncertain.Ans: b

27. Negative externalities cause loss of welfare not transmitted by market factors. A) True.B) False.C) Uncertain.Ans: a

28. Externalities can be positive, as well as negative. A) True.B) False.C) Uncertain.Ans: a

29. A subsidy for pollution not produced can induce producers to pollute at the efficient level. A) True.B) False.C) Uncertain.Ans: a

30. Pollution rights can be traded and are always efficient. A) True.B) False.C) Uncertain.Ans: c

31. Regulation helps to correct for externalities. A) True.B) False.C) Uncertain.Ans: a

32. Any commodity market has the potential to have an externality. A) True.B) False.C) Uncertai …… 此处隐藏：5623字，全部文档内容请下载后查看。喜欢就下载吧 ……