Suppose there were many drivers w/ diverse WTP (MB = 100- Q where Q is the...
- Suppose there were many drivers w/ diverse WTP (MB = 100- Q where Q is the # beach goers) but constant private cost of $15 to get to the beach.
- Graph the Private Marginal Benefit, Private Marginal Cost and Social Cost Curves assuming each traveler causes $17 in external damage.
- Imposing a toll of $_____ would cause drivers to consume the efficient number of trips taken.
Homework Answers
From MB function: When Q = 100, MB = 100 (vertical intercept) and when MB = 0, Q = 100 (horizontal intercept).
Social cost = PMC + External cost = 15 + 17 = 32
Required toll = Unit external cost = $17
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Suppose there were many drivers w/ diverse WTP (MB = 100- Q
where Q is the...
Suppose there were many drivers w/ diverse WTP (MB = 100- Q where Q is the...
Suppose there were many drivers w/ diverse WTP (MB = 100- Q where Q is the # beach goers) but constant private cost of $15 to get to the beach. Graph the Private Marginal Benefit, Private Marginal Cost and Social Cost Curves assuming each traveler causes $17 in external damage. Imposing a toll of $_____ would cause drivers to consume the efficient number of trips taken. Suppose there were many drivers w/ diverse WTP (MB= 100- Q where Q is...
9. Suppose that a wood pulp mill is situated on the bank of a river. The...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC- 10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp...
9. Suppose that a wood pulp mill is situated on the bank of a river. The...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC 10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp...
9. Suppose that a wood pulp mill is situated on the bank of a river. The...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC 10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp...
9. Suppose that a wood pulp mill is situated on the bank of a river. The...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC-10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp is...
Steel firms in the Bay Area produce steel which has a demand equal to PMB=100-Q, where...
Steel firms in the Bay Area produce steel which has a demand equal to PMB=100-Q, where Q is measured in tons. The firms have a private marginal cost of production equal to PMC=10+Q/2. This industrial activity releases numerous pollutants, some of which are deposited onto nearby land (like heavy metals), and the marginal external damage inflicted upon neighbors’ land is MD = Q/4. What tax per ton of steel would make the market equilibrium equal to the efficient equilibrium?
3. Count von Count likes to (loudly) count passing cars next to Oscar's home. This creates...
3. Count von Count likes to (loudly) count passing cars next to Oscar's home. This creates a negative externality via noise pollution that irritates Oscar. The marginal private cost of counting is 40, and marginal damage is given by 2Q, so: MPC 40 a) Explain why the existence of externalities can be considered a market failure. b) Ignoring the externality, find the privately optimal quantity (Q,) of counting if the marginal benefit is given by: MB 60 2Q. Assume Q...
5. The demand curve for chocolate can be represented by Q = 1,000-20P, where P is...
5. The demand curve for chocolate can be represented by Q = 1,000-20P, where P is the price per pound (in U.S. dollars), and the quantity Q is expressed in pounds per year. The private marginal cost of production in the chocolate industry is given by Q/20. a. (4 points) Assuming that the market for chocolate is competitive, what will be the equilibrium outcome? Please include a graph. b. (10 points) Chocolate production causes a nauseating odor to sweep over...
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PLEASE HELP MEH!
10. For the following question, consider a localized market for surface water with two competing parties. The city of West Chester is denoted using “y” and the nearby West Chester Agricultural Co-op (WCAC) is denoted using “j”. The marginal benefit curves for the two parties are given by the following equations: As Inv. Demand Functions: MB; = - 10 · Qi + 4000 MB; = - 10 · Q; + 1000 As Demand Functions: Q:= (10) MB;...
Count von Count likes to (loudly) count passing cars next to Oscar’s home. This creates a...
Count von Count likes to (loudly) count passing cars next to Oscar’s home. This creates a negative externality via noise pollution that irritates Oscar. The marginal private cost of counting is 40, and marginal damage is given by 2Q, so: MPC = 40 MD = 2Q a) Explain why the existence of externalities can be considered a market failure. b) Ignoring the externality, find the privately optimal quantity (Q0) of counting if the marginal benefit is given by: MB =...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC- 10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC 10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC 10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp...
9. Suppose that a wood pulp mill is situated on the bank of a river. The private marginal cost (MC) of producing wood pulp is given by the function MC-10+0.5Y where Y is tons of wood pulp produced. In addition to this private marginal cost, an external cost is incurred. Each ton of wood pulp produces pollutant flows into the river which cause damage valued at S 10. The marginal benefit(MB) to society of each ton of produced pulp is...
3. Count von Count likes to (loudly) count passing cars next to Oscar's home. This creates a negative externality via noise pollution that irritates Oscar. The marginal private cost of counting is 40, and marginal damage is given by 2Q, so: MPC 40 a) Explain why the existence of externalities can be considered a market failure. b) Ignoring the externality, find the privately optimal quantity (Q,) of counting if the marginal benefit is given by: MB 60 2Q. Assume Q...
PLEASE HELP MEH!
10. For the following question, consider a localized market for surface water with two competing parties. The city of West Chester is denoted using “y” and the nearby West Chester Agricultural Co-op (WCAC) is denoted using “j”. The marginal benefit curves for the two parties are given by the following equations: As Inv. Demand Functions: MB; = - 10 · Qi + 4000 MB; = - 10 · Q; + 1000 As Demand Functions: Q:= (10) MB;...
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