Externalities
Goods
Imperfect Competition
Inequality
100
What is an intervention that could be used to internalize an externality?
Per-unit pigouvian tax/subsidy
100
What characteristics of a private good does this car have? Bonus: what car is this?
Excludable and rivalrous
100
Why is imperfect competition considered a market failure?
Not allocatively efficient (D ≠ MC)
100
Based on this lawsuit, was Tesla likely making positive, negative, or normal economic profits?
Positive
200
What type of externality is depicted here?
Negative production
200
This lighthouse is always on, marking an area of sharp underwater rocks. What characteristics of a public good does it have?
Nonexcludable and nonrivalrous
200
Governments often use price ceilings coupled with lump sum subsidies to regulate natural monopolies.
What would be a better way to regulate monopolies that are not natural?
Antitrust laws
200
What type of tax is depicted here?
Progressive
300
What type of externality is depicted here?
Positive consumption
300
The government often provides public goods to society as a free service.
What's a different way that they could improve the allocation of a public good?
Improved property rights to make it a private good
300
The market graph below depicts an industry controlled by a natural monopoly. What would be a fair return price ceiling?
PG
300
How would you calculate the Gini coefficient for income inequality in this society?
A/(A+B)
400
What area represents the deadweight loss if this market is unregulated?
WXY
400
This is the market graph for a public good. How much of the good should the government supply?
Q*
400
If unregulated, what price would this natural monopoly charge?
b
400
Since 2011, the top 0.1% of households have had more wealth than the bottom 90% put together. Meanwhile, over 47 million Americans are food insecure (cannot afford to feed themselves). What is one intervention the US government could implement to increase equality?
Progressive tax/ transfer payments
500
What is the dollar value of the per-unit tax or subsidy that should be placed on the good whose market graph is depicted below?
$12 subsidy
500
A majority of fish populations in the world are overexploited or collapsed. What type of market failure does this illustrate?
Tragedy of the commons
500
What would be the socially optimal price ceiling for this natural monopoly?
$3.50
500
The figure below shows the distribution of livestock among Maasai households in different regions of Kenya and Tanzania. Which region has the most unequal distribution of livestock?
Simanjiro