1. Draw a diagram showing the demand (MPB) and supply (MPC) for masks in the United States. Be sure to indicate on your graph the free market equilibrium. 2. The main article states that the adjusted value of a statistical life is $55,000. Let's suppose that a person that wears a mask can reduce the risk of COVID-related death to another by some rate "x". Then, we can say that the marginal external benefit from wearing a mask is x*$55,000 (i.e., monetary savings in terms of statistical life). Illustrate the positive externality of wearing a mask on your graph (it's OK not to use numbers). Be sure to denote the efficient equilibrium. 3. In your text, a. b. explain what a positive externality is. briefly describe your diagram in words, including the difference between c. explain what government policy (policies) can be used to get people to "internalize this positive externality." d. explain why you think people are opposed to wearing

1. Draw a diagram showing the demand (MPB) and supply (MPC) for masks in the United States. Be sure to indicate on your graph the free market equilibrium. 2. The main article states that the adjusted value of a statistical life is $55,000. Let's suppose that a person that wears a mask can reduce the risk of COVID-related death to another by some rate "x". Then, we can say that the marginal external benefit from wearing a mask is x*$55,000 (i.e., monetary savings in terms of statistical life). Illustrate the positive externality of wearing a mask on your graph (it's OK not to use numbers). Be sure to denote the efficient equilibrium. 3. In your text, a. b. explain what a positive externality is. briefly describe your diagram in words, including the difference between c. explain what government policy (policies) can be used to get people to "internalize this positive externality." d. explain why you think people are opposed to wearing

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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