In the presence of production externality, a firm could not attain Pareto efficiency locus. t/f
In the presence of production externality, a firm could not attain Pareto efficiency locus. t/f
Homework Answers
True,
In the presense of any externality the private costs diverge from social costs and private benefits diverge from social benefits. The market inefficiency occurs as the firms are not producing at social optimum level and perfect compitition will not achive pareto optimality.
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In the presence of production externality, a firm could not
attain Pareto efficiency locus. t/f
In the Edgeworth box diagram for production 7 a. a point off the "contract curve" (or "production efficiency locus"...
In the Edgeworth box diagram for production 7 a. a point off the "contract curve" (or "production efficiency locus") cannot have more production of one of the goods than can some point on the curve. b. a point off the "contract curve" (or "production efficiency locus") can involve more production of both goods than can any point on the curve. c. a movement from autarky to trade can be associated with a movement along the "contract curve" (or "production efficiency...
Question 15 (1 point) When the production of a good generates a negative externality: OA) government...
Question 15 (1 point) When the production of a good generates a negative externality: OA) government will maximize economic efficiency by leaving the market alone. The government in this situation should always pursue Laissez Faire. N OB) the government could increase economic efficiency by taxing the good producing of the negative externality. OC) the government could increase economic efficiency by subsiding the good producing of the negative externality. OD) the government could increase economic efficiency by reducing regulations on the...
Could you please answer these two questions(28 & 29)? 28. The figure below shows production at...
Could you please answer these two questions(28 &
29)?
28. The figure below shows production at point A on the PPF and consumption at B on the indifference curve. How will changes in the price of Y and the price of X lead to efficiency at point C? Quantity of Y Excess supply of Y U3 U2 Excess demand for X Quantity of X 29. From the Edgeworth box below, which points indicate pareto optimality and which do not? 0,...
An externality arises when a firm or person engages in an activity that affects the wellbeing...
An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor reccives any compensation for that effect. If the impact on the third party is beneficial, is called a negative/positive externalily The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equllibrium price and quantity for this good With this...
I need parts D, E, F only! 1. Consider a firm that manufactures dyed textiles. The...
I need parts D, E, F only!
1. Consider a firm that manufactures dyed textiles. The firm incurs a marginal cost of MC 2Q Suppose that for every textile produced, there is an externality cost of 12 (from dyes being leaked into the water). So the true social marginal cost of widget production is MC = 2Q+12. Imagine that the (a) Assuming this is a perfectly competitive market, write out the equation for the firm's supply (b) Calculate the equilibrium...
A competitive firm has the following production function: f(x1,
A competitive firm has the following production function: f(x1,
Mathematical Question 2 (20pts) 2. Consider a Cournot competition model with two firms, 1 and 2....
Mathematical Question 2 (20pts) 2. Consider a Cournot competition model with two firms, 1 and 2. They produce identical goods in the same market with demand function P= 100-5Q with Q=91 +92- Furthermore, their production process generates pollution to the environment, which increases their cost of production. Their cost functions are given by C191,92) = 1091- +5Q and C291,92) = 15922 +45Q. a. (10pts) Calculate their equilibrium quantities, price, and profits for both firms. b. (5pts) Consider they collude and...
Asymmetric Information & Behavioral Economics. Need help with these problems 2. T/F/Explain - The presence of lemon...
Asymmetric Information & Behavioral Economics. Need help
with these problems
2. T/F/Explain - The presence of lemons in the market and the asymmetric information about which cars they are leads to an adverse selection of used cars for customers to choose from 3. Name some of the reasons why health care spending is going up in the US. What are some possible solutions? 4. T/F/Explain - Anchoring happens when firms take advantage of consumer behavior by, for example, posting inflated...
8. (T) (F). One way to increase the thermal efficiency of a Rankine cycle by rejecting...
8. (T) (F). One way to increase the thermal efficiency of a Rankine cycle by rejecting more heat from condenser. - - Q4 2 28
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10....
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10. (5 points) (w1, w2) respec- (2) Suppose that the price of product is p, and that the prices of factors are tively. Find the factor demand function ri(w, w2, p), x1(w1, w2, P), the supply function y(w1, W2, P), and the profit function T(w1, w2, p). (10 points)
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10....
In the Edgeworth box diagram for production 7 a. a point off the "contract curve" (or "production efficiency locus") cannot have more production of one of the goods than can some point on the curve. b. a point off the "contract curve" (or "production efficiency locus") can involve more production of both goods than can any point on the curve. c. a movement from autarky to trade can be associated with a movement along the "contract curve" (or "production efficiency...
Question 15 (1 point) When the production of a good generates a negative externality: OA) government will maximize economic efficiency by leaving the market alone. The government in this situation should always pursue Laissez Faire. N OB) the government could increase economic efficiency by taxing the good producing of the negative externality. OC) the government could increase economic efficiency by subsiding the good producing of the negative externality. OD) the government could increase economic efficiency by reducing regulations on the...
Could you please answer these two questions(28 &
29)?
28. The figure below shows production at point A on the PPF and consumption at B on the indifference curve. How will changes in the price of Y and the price of X lead to efficiency at point C? Quantity of Y Excess supply of Y U3 U2 Excess demand for X Quantity of X 29. From the Edgeworth box below, which points indicate pareto optimality and which do not? 0,...
An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor reccives any compensation for that effect. If the impact on the third party is beneficial, is called a negative/positive externalily The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equllibrium price and quantity for this good With this...
I need parts D, E, F only!
1. Consider a firm that manufactures dyed textiles. The firm incurs a marginal cost of MC 2Q Suppose that for every textile produced, there is an externality cost of 12 (from dyes being leaked into the water). So the true social marginal cost of widget production is MC = 2Q+12. Imagine that the (a) Assuming this is a perfectly competitive market, write out the equation for the firm's supply (b) Calculate the equilibrium...
Mathematical Question 2 (20pts) 2. Consider a Cournot competition model with two firms, 1 and 2. They produce identical goods in the same market with demand function P= 100-5Q with Q=91 +92- Furthermore, their production process generates pollution to the environment, which increases their cost of production. Their cost functions are given by C191,92) = 1091- +5Q and C291,92) = 15922 +45Q. a. (10pts) Calculate their equilibrium quantities, price, and profits for both firms. b. (5pts) Consider they collude and...
Asymmetric Information & Behavioral Economics. Need help
with these problems
2. T/F/Explain - The presence of lemons in the market and the asymmetric information about which cars they are leads to an adverse selection of used cars for customers to choose from 3. Name some of the reasons why health care spending is going up in the US. What are some possible solutions? 4. T/F/Explain - Anchoring happens when firms take advantage of consumer behavior by, for example, posting inflated...
8. (T) (F). One way to increase the thermal efficiency of a Rankine cycle by rejecting more heat from condenser. - - Q4 2 28
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10. (5 points) (w1, w2) respec- (2) Suppose that the price of product is p, and that the prices of factors are tively. Find the factor demand function ri(w, w2, p), x1(w1, w2, P), the supply function y(w1, W2, P), and the profit function T(w1, w2, p). (10 points)
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10....
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