1 John raises bees to pollinate his orchard, a couple of bees which escaped ended up pollinating his neighbour's orchard so:
a. john's neighbour has received an external cost of john's beekeeping.
b. john's neighbour has received an external benefit of john's beekeeping.
c.john's neighbour has received an internal cost of john's beekeeping.
d.none of the above.
2. external costs are:
a. borne by individuals other than those who incurred them.
b.borned by the public but incurred by the government.
c.another term for implicit costs.
d.borne by the government but incurred by the public.
3. the optimal quantity of ail pollution is:
a. found by setting the quantity of air pollution equal to the quantity of water pollution.
b.a meaningless concept since monetary values cannot be attached to problems associated with pollution.
c.whatever amount of pollution is produced by the profit-maximizing firm.
d. found by equating the marginal benefits from further reductions in pollution and the marginal costs of further reductions in pollution.
4. technological changes that make it easier to produce in a "cleaner" fashion would cause:
a. the marginal cost curve of pollution abatement to shift left increasing the degree of air quality.
b.the marginal benefit curve of pollution abatement to shift left increasing the degree of air quality.
c.the marginal cost curve of pollution abatement to shift right increasing the degree of air quality.
d.the marginal benefit curve of pollution to shit right increasing the degree of air quality.
5. if pollution is bad, why do we still use pollution-causing resources such as coal and oil to generate electricity?
a. the transaction cost of pollution is too low.
b.governements lack the political will to enforce the use of pollution-free resources.
c.pollution is only a private cost.
d.the cost of using pollution-free resources to generate power in many circumstances is much higher than generating the same power through conventional pollution causing means.
