Homework Answers
8. Option B
Explanation: When there is negative externality, the marginal social cost is higher than the marginal private cost at all output levels.
9. Option C
Explanation: It will be socially optimal if social benefit is higher than private benefits.
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toyO Question Completion Status: QUESTION 8 1 In the case of an external cost, marginal private...
Parks confer many external benefits on society: open space, trees that reduce pollution, and so on.
4. Efficiency in the presence of externalities Parks confer many external benefits on society: open space, trees that reduce pollution, and so on. Therefore, the market equilibrium quantity of parks is not equal to the socially optimal quantity. The following graph shows the demand for parks (their marginal private benefits), the supply of parks (the marginal private costs of producing them), and the marginal social benefits of parks, including both the marginal private benefits and external benefits.Use the black point (plus...
Question Completion Status: QUESTION 19 When the government increases tariffs production switches from low-cost foreign producers...
Question Completion Status: QUESTION 19 When the government increases tariffs production switches from low-cost foreign producers to high-cost domestic producers, wasting resources domestic producers buy more of the good, increasing the gains from trade domestic producers produce more output, increasing the gains from trade deadweight losses are eliminated because foreign producers sell below their product cost QUESTION 20 As a result of tariffs, domestic producers tend to • gain more than domestic consumers lose • spend less money on lobbying...
A certain production process generates both external costs and external benefits. The marginal private cost (NPC/and...
A certain production process generates both external costs and external benefits. The marginal private cost (NPC/and marginal external cost (MEC) functions are Increasing. while the marginal private benefit (MPB and marginal external benefit (MEBlfunctions are decreasing. The socially optimal (SO) as well as the individually rational (IR) output level are given by positive and finite numbers. When will the IR output level be higher than the SO one? provided that MEC SO-MEB SO b) provided that MEC SO MEB so...
Marginal Marginal private cost external cost social cost Marginal Quantity (tons of paper) (dollars) (dollars) (dollars)...
Marginal Marginal private cost external cost social cost Marginal Quantity (tons of paper) (dollars) (dollars) (dollars) 100 10 5 200 20 10 300 30 15 400 40 20 500 50 25 1) The table above gives the private costs and external costs of producing paper. Complete the table by finding the marginal social cost at each level of production. b. If the market is al competitive and is left unregulated and 400 tons of paper are produced, what is the...
QUESTION 31 If a good has zero external costs, then social marginal cost is less than...
QUESTION 31 If a good has zero external costs, then social marginal cost is less than marginal private cost. social marginal cost equal private marginal cost. we need more information to determine the relationship between private and social costs. social cost is greater than private marginal cost. QUESTION 32 A fiscal action that is initiated by an act of Congress is called automatic fiscal policy. discretionary fiscal policy. generational fiscal policy the government expenditure multiplier. QUESTION 33 The three main...
Suppose the demand (i.e. the private marginal benefit) for industrial grade stink bombs is given by...
Suppose the demand (i.e. the private marginal benefit) for industrial grade stink bombs is given by P=300-2Q and supply (i.e. the private marginal cost) for is given by P=Q. Also, suppose that the marginal external damage of consuming this product is $60 per stink bomb. a. What is the equilibrium quantity of stink bombs sold and consumed? b. What is the socially optimal equilibrium quantity of stink bombs sold and consumed? c. Considering your answers to (a) and (b), are...
1 5 -2019 Fall Term (1) - Question Completion Status QUESTION 21 Compared with the efficient outcome, the market pr...
1 5 -2019 Fall Term (1) - Question Completion Status QUESTION 21 Compared with the efficient outcome, the market price of a good that generates external benefits is too high too low optimal equal to the efficient price QUESTION 22 Products that create external benefits are over-consumed because the private benefits exceed the private costs under consumed because consumers only consider the private benefits of consumption optimally consumed as long as private benefits equal private costs underconsumed because the social...
3. If you get the H1N1 Flu vaccine, not only are your chances of getting sick...
3. If you get the H1N1 Flu vaccine, not only are your chances of getting sick reduced, but you being healthy also benefits the people you interact with on a daily basis. a. Draw a graph showing the market for H1N1 flu shots. Assume that the marginal cost of each H1N1 flu shot is equal to the marginal social cost and that the demand curve is downward sloping (use Fig. 1 to help you get started). b. Will the marginal...
Products that create external benefits are over-consumed because the private benefits exceed the private costs under...
Products that create external benefits are over-consumed because the private benefits exceed the private costs under consumed because consumers only consider the private benefits of consumption O optimally consumed as long as private benefits equal private costs underconsumed because the social costs exceed the social benefits QUESTION 23 The Coase theorem suggests that private bargains will ensure the efficiency of markets even when externalities exist O but only in the presence of government regulation if consumers have more information regarding...
1.2.3.4. 1.With an upward sloping marginal damage cost curve that starts at the origin, total damages...
1.2.3.4.
1.With an upward sloping marginal damage cost curve that starts
at the origin, total damages for 20 units of emissions are equal to
the marginal damage cost of the 20th unit times 20.
A.True
B .False
In the following figure, social MWTP equals private MWTP plus external benefits from production. In this market, the socially efficient level of output is P MSC MPC Social MWTP Private MWTP none of the choices are correct Q3 In the following figure, the...
Question Completion Status: QUESTION 19 When the government increases tariffs production switches from low-cost foreign producers to high-cost domestic producers, wasting resources domestic producers buy more of the good, increasing the gains from trade domestic producers produce more output, increasing the gains from trade deadweight losses are eliminated because foreign producers sell below their product cost QUESTION 20 As a result of tariffs, domestic producers tend to • gain more than domestic consumers lose • spend less money on lobbying...
A certain production process generates both external costs and external benefits. The marginal private cost (NPC/and marginal external cost (MEC) functions are Increasing. while the marginal private benefit (MPB and marginal external benefit (MEBlfunctions are decreasing. The socially optimal (SO) as well as the individually rational (IR) output level are given by positive and finite numbers. When will the IR output level be higher than the SO one? provided that MEC SO-MEB SO b) provided that MEC SO MEB so...
Marginal Marginal private cost external cost social cost Marginal Quantity (tons of paper) (dollars) (dollars) (dollars) 100 10 5 200 20 10 300 30 15 400 40 20 500 50 25 1) The table above gives the private costs and external costs of producing paper. Complete the table by finding the marginal social cost at each level of production. b. If the market is al competitive and is left unregulated and 400 tons of paper are produced, what is the...
QUESTION 31 If a good has zero external costs, then social marginal cost is less than marginal private cost. social marginal cost equal private marginal cost. we need more information to determine the relationship between private and social costs. social cost is greater than private marginal cost. QUESTION 32 A fiscal action that is initiated by an act of Congress is called automatic fiscal policy. discretionary fiscal policy. generational fiscal policy the government expenditure multiplier. QUESTION 33 The three main...
1 5 -2019 Fall Term (1) - Question Completion Status QUESTION 21 Compared with the efficient outcome, the market price of a good that generates external benefits is too high too low optimal equal to the efficient price QUESTION 22 Products that create external benefits are over-consumed because the private benefits exceed the private costs under consumed because consumers only consider the private benefits of consumption optimally consumed as long as private benefits equal private costs underconsumed because the social...
3. If you get the H1N1 Flu vaccine, not only are your chances of getting sick reduced, but you being healthy also benefits the people you interact with on a daily basis. a. Draw a graph showing the market for H1N1 flu shots. Assume that the marginal cost of each H1N1 flu shot is equal to the marginal social cost and that the demand curve is downward sloping (use Fig. 1 to help you get started). b. Will the marginal...
Products that create external benefits are over-consumed because the private benefits exceed the private costs under consumed because consumers only consider the private benefits of consumption O optimally consumed as long as private benefits equal private costs underconsumed because the social costs exceed the social benefits QUESTION 23 The Coase theorem suggests that private bargains will ensure the efficiency of markets even when externalities exist O but only in the presence of government regulation if consumers have more information regarding...
1.2.3.4.
1.With an upward sloping marginal damage cost curve that starts
at the origin, total damages for 20 units of emissions are equal to
the marginal damage cost of the 20th unit times 20.
A.True
B .False
In the following figure, social MWTP equals private MWTP plus external benefits from production. In this market, the socially efficient level of output is P MSC MPC Social MWTP Private MWTP none of the choices are correct Q3 In the following figure, the...
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