Question 1) Explain graphically the collective demand curve for the particular public good and describe this curve.
Question 2) Describe why the supply curve for public goods is upward sloping and describe how the optimal quantity of a public good is determined.
Question 3) Write down the purpose of cost-benefit analysis and describe the main difficulty in applying this analysis.
Question 4) Describe what you mean by spillovers or externalities.
Question 5) Explain graphically and verbally how the over allocation of resources results when spillover costs are present and how this can be corrected by government action.
Question 6) Explain graphically and verbally how the under allocation of resources occurs when spillover benefits are present and how this can be corrected by government action.
Question 7) Describe the Coase theorem, its importance, and the three conditions essential for it to work.
Question 8) Explain three policies which would reduce negative externalities.
Question 9) Use the example to describe a market for pollution rights and how this market would lead to a better allocation of resources.
Question 10) Write down the law of conservation of matter and energy to the pollution problem.
Question 11) Using supply and demand diagrams, describe the economics of recycling.
Question 12) Describe the predicted effects of global warming and how cost-benefit could be used to find out international policies and goals
Question 13) Provide two examples of how inadequate information about sellers can create the market failure.
Question 14) Describe the moral hazard and adverse selection problems faced by sellers.