Homework Answers
1) Marginal private cost (MPC) is the change in the producer's total cost brought about by the production of an additional unit of a good or service whereas, the marginal social cost of production is the producer's cost plus the external cost.
2) Marginal damage is defined as the additional damage caused by an
additional unit of emission.
3) An externality stems from the production or consumption of a
good or service, resulting in a cost or benefit to an unrelated
third party. Externalities lead to market failure because a product
or service's price equilibrium does not accurately reflect the true
costs and benefits of that product or service.
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• Distinguish between marginal private cost and marginal social cost • Define marginal damage • Explain...
Suppose the private marginal cost of producing steel were constant at $45/ton and the marginal damage...
Suppose the private marginal cost of producing steel were constant at $45/ton and the marginal damage were increasing MD=2Q, where Q = tons of steel produced. The social marginal cost of the 100th ton is therefore
Define and illustrate a cost object. Distinguish between direct costs and indirect costs. Explain variable and...
Define and illustrate a cost object. Distinguish between direct costs and indirect costs. Explain variable and fixed costs. Interpret unit costs cautiously. Distinguish inventoriable costs from period costs. Illustrate the flow of inventoriable and period costs. Explain why product costs are computed in different ways for different purposes. Describe a framework for cost accounting and cost management.
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...
LLUN E l Plashcards | Quizlet Sa = Marginal social cost S = Marginal private cost...
LLUN E l Plashcards | Quizlet Sa = Marginal social cost S = Marginal private cost Demand Q Q Quantity Figure 1 shows a market with a negative extemality - Q + Refer to Figure 1. The efficient output level is Qd. Q6. Qb-Qd.
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...
Consider an industry where firms have a production function with private marginal cost ??? (?) =...
Consider an industry where firms have a production function with private marginal cost ??? (?) = 40 + 2? and an additional (external) marginal cost to society of ??? (?) = ?/4. The market is characterized by the inverse demand function ?(?) = 400 − 2?. 1. Find the equilibrium in the competitive market. Calculate the (private) producer and consumer surplus in this case. 2. Find the equilibrium if the market is monopolized. Calculate the (private) producer and consumer surplus...
When there is negative externality in production, a. marginal social benefit exceeds marginal private benefit. b....
When there is negative externality in production, a. marginal social benefit exceeds marginal private benefit. b. marginal private benefit exceeds marginal social benefit. c. marginal social cost exceeds marginal private cost. d. marginal private cost exceeds marginal social cost.
Marginal Sociauantity Marginal Marginal Private benefit Cost (dollars (number of Social per course) 100 80 60...
Marginal Sociauantity Marginal Marginal Private benefit Cost (dollars (number of Social per course) 100 80 60 40 20 Benefit 60 80 100 120 140 students) 4,500 4,000 3,500 3,000 2,500 20 40 60 80 100 The table above gives the marginal social cost (which equals the price), marginal private benefnt, and marginal social benefit of students attending Diablo Valley College (DVC) in Concord, California The socially efficient number of students attending DVC is Marginal Private benefit Marginal SociaQuantity Marginal Cost...
Pick the 2 ideal answers: In a free market, efficient firms produce where (Marginal private cost/Marginal...
Pick the 2 ideal answers: In a free market, efficient firms produce where (Marginal private cost/Marginal Social Cost) equals (marginal private benefit/Marginal Social Benefit)
1-Explain why the marginal cost of production must increased if the marginal product of the marginal...
1-Explain why the marginal cost of production must increased if the marginal product of the marginal resource is decreasing. 2- Define productivity efficiency and allocative efficiency. What conditions must be met in order to achieve them?
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...
LLUN E l Plashcards | Quizlet Sa = Marginal social cost S = Marginal private cost Demand Q Q Quantity Figure 1 shows a market with a negative extemality - Q + Refer to Figure 1. The efficient output level is Qd. Q6. Qb-Qd.
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...
Marginal Sociauantity Marginal Marginal Private benefit Cost (dollars (number of Social per course) 100 80 60 40 20 Benefit 60 80 100 120 140 students) 4,500 4,000 3,500 3,000 2,500 20 40 60 80 100 The table above gives the marginal social cost (which equals the price), marginal private benefnt, and marginal social benefit of students attending Diablo Valley College (DVC) in Concord, California The socially efficient number of students attending DVC is Marginal Private benefit Marginal SociaQuantity Marginal Cost...
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