Chapter 10 Micro Final Flashcards Preview

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Flashcards in Chapter 10 Micro Final Deck (23):
1

What is an example of social costs?

The costs to buy materials or equipment and pollution in the Ithaca factory Therm

2

Corrective Taxes

A tax to regulate or change negative externalities

3

What is a SOCIAL example of a positive externality?

Tesla creates knew knowledge that others can use like the electric car

4

How do market based policies achieve a more efficient income? (Positive externality)

Tax on cigarettes
Consumers gain an incentive not to buy cigarettes
Therefore consumers can have a more efficient income by not wasting money on cigarettes

5

What is an example of a Social Benefit (Positive Externality)

President Obama implementing Obamacare
Social benefit is people who could not afford healthcare now have it.

6

What is an example of private costs?

Price Google pays to hire new workers

7

Tradable Pollution Permits Definition

Cap and Trade that creates a market to trade and the ability to produce

8

Why does negative externalities lead to inefficient overproduction?

Due to when the supply of product in the market is greater than the demand

9

Private Subsidies (positive government Externality)

Form of aide to a private firm

10

Vouchers (positive government Externality)

Documentation that a consumer uses to get money back

11

Negative Externality Example (Government)

North Korea nuking the United States

12

What is 1 way to Mandate Clean Technology?

Regulations

13

Social Cost =

Private costs + externalities

14

What is 1 example of establishing Property Rights (Negative Government Externality)

Give each individual a plot of land so they don't overuse the common resource
Therefore, this gives individuals an incentive to slow their consumption

15

What is another word for external benefits ( positive externality)

Positive beniefts

16

What is an example of The Coase Theorem?

Barking dog that constantly annoys friend
Am I going to give it up for my friend or am I going to keep it and care about the dog more

17

What is 1 example of Public Provisions (positive government Externality) Explain why.

Education because we want more of it.
Therefore the government provides education

18

What are 3 market based policies?

Subsidies
Corrective Taxes
Public Provisions

19

Private Cost

The cost that is directly caused by sellers

20

Name 3 ways how taxes, property rights, and pollution charges achieve a more efficient income? (Negative externality)

Regulations
Taxes
Zoneing

21

Name a positive externalities that leads to inefficient production? Explain why it does?

Education because people don't account for the social benefits of education
Therefore they don't consume enough of it

22

External Cost (positive externality)

The positive effect that an activity has on any third party

23

What are 2 SOCIAL examples of a Negative Externality?

Factory waste spilling into a lake with swimmers
Dog barking that disturbs neighbor

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