Question

Market for Laptop Batteries Supply Specialized electronic batteries, such as those for laptops, are hard to dispose of safely, yielding excess pollution when one gets thrown away. Suppose that producing these batteries creates a social cost of $150 per unit. The accompanying diagram depicts the market for these batteries in which these social costs are not internalized. Please adjust the appropriate curves to represent the market if the social costs are internalized. 250 200 150 Demand 0 6.000 7.000 8,000 1,000 2,000 3000 4,000 5,000 Quantity

Answer 1

True	False
Pollution is an example of external cost	The term social and external cost are synonyms
Social cost is sum of private and external cost.	When the production of a good results in pollution, private and social cost are same
When the production of a good results in pollution, the private and social cost are different	Wages are an example of external cost

-	Private cost are cost that the firms is not obligated to disclose to the public (False).

Answer 1 ) In the first question socially optimal level of batteries can be attained if the supply curve is shifted to the left. This can be done by either taxing the producer or extending producers liability for waste disposal.