Economic Concepts Flashcard

Front

What event highlighted the severe air pollution in the Cuyahoga River in Ohio in 1969?

Back

The river spontaneously burst into flame

Front

What is an externality in economic terms?

Back

A third party affected by a market exchange.

Front

What is an example of a negative externality mentioned in the text? Options: Free concerts in your neighborhood, Pollution from production, Subsidies for farmers, Tax incentives for businesses

Back

Pollution from production

Front

According to the text, what is the market equilibrium price for refrigerators when quantity supplied equals quantity demanded?

Back

$650

Front

What is the main purpose of command-and-control regulation in environmental policy?

Back

To specify allowable quantities of pollution and require specific technologies

Front

Which U.S. agency was created to oversee all environmental laws?

Back

Environmental Protection Agency (EPA)

Front

What is a pollution charge?

Back

A tax imposed on the quantity of pollution a firm emits

Front

What is one criticism of command-and-control regulation mentioned in the text?

Back

It offers no incentive to improve beyond the set standard

Front

What is the cost for a firm to abate the first 10 pounds of particulates?

Back

$300

Front

Why might a firm choose to reduce pollution by 30 pounds instead of paying the tax?

Back

The marginal cost of reducing pollution is less than the tax.