EC2106F08PF

# EC2106F08PF - Name Class Date ID A Practice Final Multiple...

This preview shows pages 1–3. Sign up to view the full content.

Name: ________________________ Class: ___________________ Date: __________ ID: A 1 Practice Final Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Since restored historic buildings convey a positive externality, local governments may choose to a. regulate the demolition of them. b. provide tax breaks to owners who restore them. c. increase property taxes in historic areas. d. Both a and b are correct. Figure 10-4 ____ 2. Refer to Figure 10-4. This market ____ 3. Suppose that flower gardens create a positive externality equal to \$1 per plant. What is the relationship between the equilibrium quantity and the socially optimal quantity of plants grown?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Name: ________________________ ID: A 2 ____ 4. The Coase theorem states that ____ 5. Suppose that Bill wants to dine at a fancy restaurant, but the only available table is in the smoking section. Bill dislikes the smell of cigarette smoke. He notices that only one person, Peter, is smoking in the smoking section. Bill values the absence of smoke at \$15. Peter values the ability to smoke in the restaurant at \$10. In order for Bill to pay Peter not to smoke, he will need to tip the waiter \$10 to facilitate the transaction. Which of the following represents an efficient solution? a. Peter continues to smoke because the cost to Bill to pay him not to smoke is between \$20 and \$25, which exceeds the benefit to him of no smoking (\$15). b. Bill offers Peter between \$10 and \$15 not to smoke, and he pays the waiter \$10. Peter accepts, and both parties are better off. c. Bill offers Peter between \$10 and \$15 not to smoke, and he pays the waiter \$10. Peter declines because he has a right to smoke in the smoking section. d. Bill offers Peter \$5 not to smoke, and he pays the waiter \$10. Peter accepts, and both parties are better off. Table 11-1 Consider the town of Tritown with only three residents, Ed, Jim, and Tony. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident’s willingness to pay for each acre of the park.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern