Homework Answers
a)
The external benefit = 2,200 - 1,600 = $600
b) The equilibrium price is $1,600 andthe equilibrium quantity is 110,000.
c) The social optimal quantity is 140,000.
d) The market produces too little of the good relative to the social optimal outcome. The difference = 140,000 - 110,000 = 30,000.
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(4) The graph below shows a market for house-painting services. Use it to answer the questions...
The graph below shows a market for house-painting services. Use it to answer the questions that...
The graph below shows a market for house-painting
services. Use it to answer the questions that follow.
A)Painting the exterior of your house yields external
benefits for your neighbors. Label the private benefit and social
benefit curves and show the amount of the external
benefit.
B)What is the equilibrium price and
quantity?
C)What is the socially optimal quantity in this
market?
(d) Does the market produce too much or too little of
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The graph shows the relevant curves in the paper production market. Social MC In the absence...
The graph shows the relevant curves in the paper production market. Social MC In the absence of government intervention, how many reams of paper are purchased or sold? Specify your answer to two decimal places. Supply or private MC 13.37- ---- Price ($) paper: reams Demand What is the efficient amount of paper this market should produce? Specify your answer to two decimal places. 0 5 .14 10.64 13.84 19.34 Quantity (reams) paper: reams Compared to the socially optimal level...
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1. For each of the following situations draw the Demand and Supply for a competitive market....
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We are considering a market with marginal cost of P=100+2Q and a demand of P=500-2Q. Use...
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2. Consider a downward-sloping market demand and an upward-sloping marginal cost. For each of the following...
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what are the answers to these questions? Use the graph below to answer questions 5-10. It...
what are the answers to these questions?
Use the graph below to answer questions 5-10. It represents the market for flu-shots, a good that produces a sizable positive externality, | 55 52.5 ។ 50 47.5 45 ។ 42.5 | | 40 37.5 351 32.5 ។ ង 30 | E. 27.5 ។ 25 22.5 + 20 ។ 17.5 ។ 15 12.5 D social 9 2.5 ។ | 0 5 10 15 20 25 30 35 40 45 50 55 60 65...
what are the answers to these questions? Use the graph below to answer que stions 1-5....
what are the answers to these questions?
Use the graph below to answer que stions 1-5. It represents the market for the monthly U.S. beer market, a delicious product which nonetheless produces one of the largest negative externalities among popular goods Ssocial Sprivate 10 15 20 25 30 35 4045 50 55 60 65 0 5 Qin millions 1. What is the implied amount of the marginal damage in the above graph? 2. At what price is the socially optimal...
The graph below shows a market for house-painting
services. Use it to answer the questions that follow.
A)Painting the exterior of your house yields external
benefits for your neighbors. Label the private benefit and social
benefit curves and show the amount of the external
benefit.
B)What is the equilibrium price and
quantity?
C)What is the socially optimal quantity in this
market?
(d) Does the market produce too much or too little of
this good relative to the socially optimal outcome?...
The graph shows the relevant curves in the paper production market. Social MC In the absence of government intervention, how many reams of paper are purchased or sold? Specify your answer to two decimal places. Supply or private MC 13.37- ---- Price ($) paper: reams Demand What is the efficient amount of paper this market should produce? Specify your answer to two decimal places. 0 5 .14 10.64 13.84 19.34 Quantity (reams) paper: reams Compared to the socially optimal level...
3) Assume that the market for energy efficient window installations in San Diego is perfectly competitive. Quarterly inverse supply and inverse demand are: P 1200 3Q (Private MB) P 440Qs (Private MC) neighbors (lowering the overall price of electricity, reducing pollution, and so on) These external benefits to consumers are estimated to be EMB 2Q (the more windows installed, the more external benefit to installing more windows). a) Find the equilibrium price and quantity that will be produced in a...
1. For each of the following situations draw the Demand and Supply for a competitive market. Show the Social Marginal Benefit and Social Marginal Cost curves and explain whether the presence of the externality leads to a competitive market equilibrium with too much or too little production relative to the socially optimal outcome. (a) A negative externality associated with production. (b) A negative externality associated with consumption (c) A positive externality associated with consumption. 2. Consider a downward-sloping market demand...
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what are the answers to these questions?
Use the graph below to answer questions 5-10. It represents the market for flu-shots, a good that produces a sizable positive externality, | 55 52.5 ។ 50 47.5 45 ។ 42.5 | | 40 37.5 351 32.5 ។ ង 30 | E. 27.5 ។ 25 22.5 + 20 ។ 17.5 ។ 15 12.5 D social 9 2.5 ។ | 0 5 10 15 20 25 30 35 40 45 50 55 60 65...
what are the answers to these questions?
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