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D) the level of pollution that minimizes the average total cost of producing the product that generates the pollution. 10. The efficient level of pollution is: 11. According to the Coase theorem, a market will ________when negative externalities are present. 12. (Table: The Socially Optimal Quantity of Flash Drives) The table The Socially Optimal Quantity of Flash Drives lists several values for price (P), quantity demanded (QD), and quantity supplied (QS) from the market demand and supply curves for flash drives. Suppose that the production of flash drives generates a marginal external cost equal to $10. The socially optimal number of flash drives will be: Verspreiden niet toegestaan | Gedownload door Aamitabh Devi ([email protected])
UNIVERSITY OF TORONTOECO100:INTRODUCTORY ECONOMICSDEPARTMENT OF ECONOMICSROBERT GAZZALE,PHD 201211 PRACTICE PROBLEMS:EXTERNALITIES4 Figure: Environmental Standards versus Emissions Taxes 13. (Figure: Environmental Standards versus Emissions Taxes) In the figure Environmental Standards versus Emissions Taxes, if the goal is to limit the total emissions of the two firms, A and B, to 600 tons, the most efficient solution is an ________, and total pollution would be ________ tons. A) environmental standard; 300 B) emissions tax; 600 C) environmental standard; 600 D) emissions tax; 200 14. The marginal social benefit of pollution: 15. If the number of available tradable emissions permits is decreased, the equilibrium price of the permits ________ and the equilibrium quantity of emissions ________. 16. Assume the price of a tradable emissions permit for a ton of sulfur dioxide is $150. Which of the
following is incorrect