MIKROEKONOMI II (EPPE2014)

SEMESTER 1 SESI 2023-2024

KESAN LUARAN DAN BARANGAN AWAM

TOPIK LINK PLAYLIST

KULIAH 8 https://www.youtube.com/playlist?list=PLIpHui-
KESAN LUARAN DAN W_kvpUcOGz_JX9b02zli-Pmost
BARANGAN AWAM
1. KONSEP EKSTERNALITI
https://youtu.be/UvTlRNK0AF4

2. CORRECTING EXTERNALITIES
https://youtu.be/nVANolvBRLs

3. PROPERTY RIGHTS
https://youtu.be/-7zMxNlwhE0

4. BARANGAN AWAM
https://youtu.be/EAOjZu__eZo

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 MIKROEKONOMI II (EPPE2014)
SEMESTER 1 SESI 2023-2024
KESAN LUARAN DAN BARANGAN AWAM
SUBMIT VIA LINK: https://forms.gle/jeEYiwGw4eoAxgb2A
DEADLINE: 16/1/2024 (1.00 PM)

1. An externality arises when

a) an economic good cannot be produced indoors.
b) the actions of a decision maker affect a third party.
c) a good benefits all consumers, even though individual consumers may not pay for
the costs of production.
d) the invisible hand described by Adam Smith is at work.

2. A public good is a good

a) that is produced by a government agency.
b) that is available to government workers only.
c) that benefits all consumers, even though individual consumers may not pay for
the costs of production.
d) whose production and/or consumption affects a third party.

3. Which of the following is a key feature of a public good?

a) An externality is created by its consumption.
b) The good is non-rival in its consumption.
c) A consumer cannot be excluded from the good.
d) Both b) and c) are correct.

4. An environmental economic consulting firm is hired to measure the production schedule

for a coal-burning electric generating plant in such a way as to incorporate the negative
externalities associated with the pollution from the plant. The marginal social cost of this
plant’s production can be expressed as MSC = 3Q . Prior to the consulting firm’s report,
the consultants asked the plant’s manager for data to generate the firm’s supply schedule.
The consultants calculate that the marginal private cost of the plant’s production can be
expressed as MPC = Q . The firm’s demand curve can be expressed as P = 60 − 2Q . If
the consultants have accurately measured the impact of the pollution externality, the plant
is ________________ by _____________ units.
a) under-producing; 8
b) over-producing; 8
c) under-producing; 16
d) over-producing; 16

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5. An environmental economic consulting firm is hired to measure the production schedule
for a coal-burning electric generating plant in such a way as to incorporate the negative
externalities associated with the pollution from the plant. The marginal social cost of this
plant’s production can be expressed as MSC = 3Q . Prior to the consulting firm’s report,
the consultants asked the plant’s manager for data to generate the firm’s supply schedule.
The consultants calculate that the marginal private cost of the plant’s production can be
expressed as MPC = Q . The firm’s demand curve can be expressed as P = 60 − 2Q . If
the consultants have accurately measured the impact of the pollution externality, the firm
is _______________ by __________ dollars.
a) under-pricing; 8
b) over-pricing; 8
c) under-pricing; 16
d) over-pricing; 16

6. When the market for product Y includes a positive externality,

a) marginal social cost exceeds marginal private cost.
b) marginal private cost exceeds marginal social cost.
c) marginal social benefit exceeds marginal private benefit.
d) marginal private benefit exceeds marginal social benefit.

7. Suppose that a particular plant emits a chemical that pollutes the ground water. Without
considering the effects of the pollution, the firm has a marginal private cost curve of
MPC = 2Q + 30 . The firm faces a demand curve of P = 60 − Q . If the firm were to
incorporate the costs of the pollution, the firm would have a marginal social cost curve of
MSC = 4Q + 30 . What is the value of an optimal emissions fee that would achieve the
socially optimal level of output?
a) $54.
b) $32.
c) $12.
d) $10.

8. Suppose that a particular plant emits a chemical that pollutes the ground water. Without
considering the effects of the pollution, the firm has a marginal private cost curve of
MPC = 2Q + 30 . The firm faces a demand curve of P = 60 − Q . If the firm were to
incorporate the costs of the pollution, the firm would have a marginal social cost curve of
MSC = 4Q + 30 . What is the socially optimal level of output?
a) 54 units.
b) 50 units.
c) 10 units.
d) 6 units.

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9. Suppose that a particular plant emits a chemical that pollutes the ground water. Without
considering the effects of the pollution, the firm has a marginal private cost curve of
MPC = 2Q + 30 . The firm faces a demand curve of P = 60 − Q . If the firm were to
incorporate the costs of the pollution, the firm would have a marginal social cost curve of
MSC = 4Q + 30 . What is the socially optimal price?
a) $54.
b) $50.
c) $10.
d) $6.

10. When the market for product X includes a negative externality,

a) marginal social cost exceeds marginal private cost.
b) marginal private cost exceeds marginal social cost.
c) marginal social benefit exceeds marginal private benefit.
d) marginal private benefit exceeds marginal social benefit.

11. Suppose that the marginal private benefit of a new vaccine could be measured as
MPB = 10 − Q . Suppose that the marginal social benefit could be measured as
MSB = 12 − Q . Suppose that the private marginal cost curve could be measured as
MPC = Q . If there is no subsidy in this market,
a) society will over-consume this product by 2 units.
b) society will over-consume this product by 1 unit.
c) society will under-consume this product by 2 units.
d) society will under-consume this product by 1 unit.

12. Suppose that the marginal private benefit of a new vaccine could be measured as
MPB = 10 − Q . Suppose that the marginal social benefit could be measured as
MSB = 12 − Q . Suppose that the private marginal cost curve could be measured as
MPC = Q . What quantity represents the optimal societal consumption of the vaccine?
a) 4 units.
b) 5 units.
c) 6 units.
d) 10 units.

13. Suppose that the marginal private benefit of a new vaccine could be measured as
MPB = 10 − Q . Suppose that the marginal social benefit could be measured as
MSB = 12 − Q . Suppose that the private marginal cost curve could be measured as
MPC = Q . What amount of a per-unit subsidy would encourage the optimal societal
consumption of the vaccine?
a) $1.
b) $2.
c) $4.
d) $6.

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14. ________________ states that regardless of how property rights are assigned with an
externality, the allocation of resources will be will be efficient when the parties can
costlessly bargain with each other
a) Bargaining power
b) Opportunity cost
c) Coase Theorem
d) Both a and b

15. Which one of the following statement is false

a) When consumption of a good by one person does not reduce the quantity that can
be consumed by others is nonrival good
b) Exclusive good is a good to which consumers may be denied access
c) A good that once produced is not accessible to all customers is nonexclusive good
d) When consumption of a good by one person reduces the quantity that can be
consumed by others is rival goods

16. Which of the following is a real-world example of a public good?

a) You are craving a Diet Coke® for lunch, so you purchase one from the hot dog
stand in front of your classroom building.
b) National defense is available even for people who do not pay income taxes.
c) A person seated in a non-smoking section of a restaurant decides to sneak a few
puffs of a cigarette.
d) A child receives a vaccination to prevent the spread of measles.

17. In markets with externalities or public goods,

a) private benefits exceed social benefits.
b) private costs exceed social costs.
c) the private costs and benefits that decision makers face diverge from the social
costs and benefits.
d) the private costs and benefits that decision makers face are the same as the social
costs and benefits.
18. A market characterized by a positive externality
a) tends to under-produce the product.
b) tends to over-produce the product.
c) finds that the marginal private cost exceeds the marginal social cost.
d) both b) and c) are true.

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 P MSC

D MPC = Supply
P1 A
E
H B
P2
F I C
P3
G J Demand
Q1 Q2 Q

19. In the diagram above, the external cost savings from producing at the socially optimal
quantity rather than at the private equilibrium can be represented as
a) A
b) B+C
c) A+B+C
d) E+F+H+I

20. Suppose that a smoker and a non-smoker are seated next to each other in a restaurant.
This restaurant does not offer a non-smoking section. The smoker is indifferent between
1) smoking and 2) not smoking and consuming a $6 dessert. The non-smoker values
being able to eat in a smoke-free environment at $10. According to Coase’s Theorem,
and assuming no bargaining costs, what will happen?
a) The smoker will continue to smoke because that is his right.
b) The smoker will stop smoking, just to be a nice guy.
c) The non-smoker will offer to pay the smoker between $6 and $10 to stop
smoking, but the smoker will refuse because he has the right to smoke.
d) The non-smoker will offer to pay the smoker between $6 and $10 to stop
smoking, and the smoker will accept the money and refrain from smoking.

21. A non-rival good

a) is also nonexclusive.
b) is common in competitive markets.
c) must be free.
d) is one where the consumption of the good by one person does not reduce the
quantity available for consumption by another person.

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22. Suppose that Bill, George, and Al constitute the entire market for consumers of national
defense. Each man has an identical demand curve for national defense, which can be
expressed as P = 50 − Q . Suppose that the marginal cost for national defense can be
expressed as MC = $30 . What is the optimal quantity of national defense?
a) 150 units.
b) 60 units
c) 40 units.
d) 20 units.

23. A nonexclusive good

a) is also non-rival.
b) is common in competitive markets.
c) must be free.
d) is one where once the good is produced, no one can be prohibited from
consuming the good.

24. Which of the following is an example of a free rider problem?

a) Sally listens to public radio but never contributes to her local station.
b) Fred benefits when the National Guard arrives to help create a flood wall around
his town, but he is so poor that he pays no taxes.
c) Joe works with two other students on a group project for his intermediate
microeconomics class. The grade is based on a group paper, but Joe goes to a
movie instead of working on the paper because he knows that the other group
members will write it without him.
d) All of the above are correct.