Refer to Figure 4. Suppose there is a $30 external benefit associated with the production of this good. How many of the following policies lead to the efficient outcome?
• A $60 price floor
• A $30 price ceiling
• A $30 tax on consumers
• A $30 subsidy to consumers
a) None of these policies lead to the efficient outcome.
b) 1 of these policies leads to the efficient outcome.
c) 2 of these policies lead to the efficient outcome.
d) 3 of these policies lead to the efficient outcome.
Option B
Explanation: $30 subsidy on consumers would result in socially optimal quantity.
Refer to Figure 4. Suppose there is a $30 external benefit associated with the production of...
Price (S) 50 Quantity Figure 3 12. Refer to Figure 3. Assume that production of this good generates a $30 per unit external cost. How many of the following regulations would lead to the efficient outcome? • A price ceiling at $30 • A price floor at $60 • A per-unit tax of $30 • A per-unit subsidy of $30 a) 1 b) 2 c) 3 d) 4 13. Refer to Figure 3. Assume that production of this good generates...
Price ($) 100T Social Cost ! Private Cost 50 Quantity Figure 7 23. Refer to Figure 7, which shows a market in which the production of the good generates a $45 external cost. Which area(s) represent(s) the deadweight loss associated with the competitive market outcome? a) A b) B c) C d) B+C 24. Refer to Figure 7, which shows a market in which the production of the good generates a $45 external cost. Which of the following policies would...
Price (S) 100T 500 Quantity Figure 4 15. Refer to Figure 4. Suppose there is a $30 external benefit associated with the production of this good. What is the most that 3rd parties would be willing to pay to have either side of the market internalize the external benefit (i.e, move from the competitive market outcome to the efficient outcome)? a) $0 b) $6,000 c) $15,000 d) $21,000
Price (S 100 50 25 D 500 Quantity Figure 5 20. Refer to Figure 5. How many of the following policies would a firm with market power oppose? Assume that the firm will oppose policies that lead to a reduction in producer surplus. A $60 price floor A $60 price ceiling A $30 tax on consumers A $30 subsidy to consumers a) A firm with market power will oppose 1 of the above policies b) A firm with market power...
14. Refer to Figure 3. Assume that production of this good
generates a $30 per unit external cost. How much total surplus is
generated in this market at the efficient outcome?
a) $375
b) $675
c) $1,250
d) $2,175
Price (S) 50 50 Quantity Figure 3
Q3) Suppose that the market demand and supply curve in a competitive market are Q"-15 - 2P and QS-P. For each of the following policies, calculate the price and quantity that will be traded and the value of the deadweight loss. a) An excise tax of S1 per unit, paid by producers. b) A subsidy of $2 per unit, paid to consumers. c) A price floor of S7. d) A price ceiling of S4. e) A production quota of 3...
the figure at right. The market equilibrium quantity is Q. Point Q2 represents the optimal amount of production. Refer The government can achieve the optimal outcome by consumers equal to OA. providing a per-unit subsidy P2 P1 P3 O B. providing a per-unit subsidy Рз - P1- consumers equal to P2 P. O C. setting the price at P3. O D. establishing a tax equal to P2 -P1 per unit of the good sold. D2 D. а, а Quantity Price...
In the diagram below, how large must the external benefits
associated with vaccinations be in order for it to be efficient to
offer them for free (by providing a subsidy that covers the full
cost of the vaccination)? Provide a specific numerical answer.
Illustrate your answer in the diagram. SOCIAL BENEFIT CURVE IS NOT
INCLUDED.
Price 40 30 20 10 Qa Quantity of vaccinations
The figure on the right shows the costs and benefits associated
with the production of wood pulp. With regulation that achieves an
efficient outcome, the market produces ____ tons of wood pulp at
a price of ____ per ton.
A.
5; $1,100
B.
3; $800
C.
3; $700
D.
5; $700
E.
4; $800
Price (dollars per ton) The figure on the right shows the costs and benefits associated with the production of wood pulp. With regulation that achieves an...
Q16 (1 point).
Refer to the figure entitled "Market for Meds". If a production
quota of 20 units is imposed, what will be the deadweight loss?
5
10
15
20
Q17 (1 point).
Refer to figure entitled "Market for Gourmet Burgers". Suppose a
tax of $2 per burger is imposed on the consumers, what will be the
new equilibrium market price and quantity?
$4, 4
$6, 4
$4, 6
$6, 6
None of the above.
Q16 (1 point). Refer to...