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1. When people wear masks during a pandemic it provides an external benefit to others. Economists would likely argue that governments should otherwise the amount of mask wearing produced by the market would be the socially optimal level. for masks a/ impose a tax; above b/ provide a subsidy; below c/ impose a tax; below d/ provide a subsidy; above

1. When people wear masks during a pandemic it provides an external benefit to others. Economists would likely argue that governments should otherwise the amount of mask wearing produced by the market would be the socially optimal level. for masks a/ impose a tax; above b/ provide a subsidy; below c/ impose a tax; below d/ provide a subsidy; above

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. When people wear masks during a pandemic it provides an external benefit to others. Economists would likely argue that governments should otherwise the amount of mask wearing produced by the market would be the socially optimal level. for masks a/ impose a tax; above b/ provide a subsidy; below c/ impose a tax; below d/ provide a subsidy; above 2. Two businesses, X and Y, each dump 20 tonnes of pollution into a creek. In an effort to reduce pollution, the government will now require businesses to have a pollution permit to dump pollutants in the creek. Each business receives 10 pollution permits and they can use it to pollute or sell it to the other business (but lose the ability to pollute). To reduce pollution it costs business X $100 per tonne of pollutant eliminated and it costs business Y $50 per tonne of pollutant eliminated. If the government does NOT allow the businesses to trade these permits, the total cost of reducing pollution will be and if the government ALLOWS business to buy and sell permits, the total cost of reducing pollution will be a/ $1,500; $1,000 b/ $1,500; $500 c/ $1,000; $500 d/ $1,000; $1,5000
Transcribed Image Text:1. When people wear masks during a pandemic it provides an external benefit to others. Economists would likely argue that governments should otherwise the amount of mask wearing produced by the market would be the socially optimal level. for masks a/ impose a tax; above b/ provide a subsidy; below c/ impose a tax; below d/ provide a subsidy; above 2. Two businesses, X and Y, each dump 20 tonnes of pollution into a creek. In an effort to reduce pollution, the government will now require businesses to have a pollution permit to dump pollutants in the creek. Each business receives 10 pollution permits and they can use it to pollute or sell it to the other business (but lose the ability to pollute). To reduce pollution it costs business X $100 per tonne of pollutant eliminated and it costs business Y $50 per tonne of pollutant eliminated. If the government does NOT allow the businesses to trade these permits, the total cost of reducing pollution will be and if the government ALLOWS business to buy and sell permits, the total cost of reducing pollution will be a/ $1,500; $1,000 b/ $1,500; $500 c/ $1,000; $500 d/ $1,000; $1,5000
3. Purchasing a car is consumption and private market will likely supply in As a result the ----_ of cars. a rival; excludable; the optimal amount b nonrival; nonexcludable; too many c nonrival; excludable; too few d rival; nonexcludable; too many
Transcribed Image Text:3. Purchasing a car is consumption and private market will likely supply in As a result the ----_ of cars. a rival; excludable; the optimal amount b nonrival; nonexcludable; too many c nonrival; excludable; too few d rival; nonexcludable; too many
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