P ($)1098765432100 1 2 3 4 5 6 7 8 9 10XThe graph above shows a market with an externality. Refer to the graph to answer the following questions:In this market the externality is positiveIf the government does not interfere in the functioning of this market, the quantity traded in the market isOne way for the government to move the market to the efficient point is to implement a correctiveCheckper unit.As a result of this intervention, the quantity traded would increase+and the price is $+ in the amount of $subsidytaxand the price of the good woulddecreasestay the sameincrease+

Positive externalities occur when the consumption of a good results in positive spillover effects on…

10 9 8 7 6 5 4 3 2 1 0 0 P ($) SB 1 2 3 4 5 6 7 8 9 10 The graph above shows a market with an externality. Refer to the graph to answer the following questions: In this market the externality is positive If the government does not interfere in the functioning of this market, the quantity traded in the market is Check One way for the government to move the market to the efficient point is to implement a corrective per unit. As a result of this intervention, the quantity traded would increase ◆ subsidy tax → and the price of the good would and the price is $ in the amount of $ decrease stay the same incre

10 9 8 7 6 5 4 3 2 1 0 0 P ($) SB 1 2 3 4 5 6 7 8 9 10 The graph above shows a market with an externality. Refer to the graph to answer the following questions: In this market the externality is positive If the government does not interfere in the functioning of this market, the quantity traded in the market is Check One way for the government to move the market to the efficient point is to implement a corrective per unit. As a result of this intervention, the quantity traded would increase ◆ subsidy tax → and the price of the good would and the price is $ in the amount of $ decrease stay the same incre

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The production Compact Fluorescent Lightbulbs (CFL) use mercury in their production process. Mercury is a heavy metal and considered bad for the environment. Suppose the marginal external cost is $5 per lightbulb and the government levies a corrective tax of $5.50 per lightbulb. With this new tax: Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b Question 4 с d The price will be below the marginal social cost. Not enough light bulbs will be produced. The price will be below the marginal social benefit. The price will be below the marginal cost to produce light bulbs.
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10 8 6 4 3 P ($) SB 1 5 6 7 8 9 10 The graph above shows a market with an externality. Refer to the graph to answer the following questions: . In this market the externality is ♦ . If the government does not interfere in the functioning of this market, the quantity traded in the market is and the price is $ . One way for the government to move the market to the efficient point is to implement a corrective in the amount of $ per unit. 2 S.
What is an external benefit? An external benefit is a benefit that OA. always equals external cost OB. experiences increasing marginal returns C. affects someone other than the buyer of a good OD. is greatest at the equilibrium point
The following graph shows the externalities in the market of papers. Apparently, there are negative externalities in the production of paper. The Marginal External Cost is estimated to be a constant $10 for all quantities. MSC S = MPC 110 105 100 95 Price, Benefit, and Cost (Dollars) D D m 4.5 5 Tons of Paper per Year (Millions) i. Explain how we can get the MSC. U D = MSB
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for electric cars. Suppose that a electric car manufacturing facility dumps sludge into a nearby river, creating a negative externality for those living downstream from the facility. Producing additional electric cars imposes a constant per-unit external cost of $600. The following graph shows the demand (private value) curve and the supply (private cost) curve for electric cars. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $600 per unit. PRICE (Dollars per unit of electric cars) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0 + 1 O □ ☐ O 2 3 4 5 QUANTITY (Units of electric cars) The market equilibrium quantity is ☐ Supply (Private Cost) 6 Demand (Private Value) 7 Social Cost (?) units of electric cars, but the socially optimal quantity of electric car production is To create an incentive for the firm to produce the socially optimal…
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9) An externality of $5/unit based on the positive social effects of their consumption exists in this market. 20 15 10 10 15 20 Quantity (units) Draw the new social curve on the graph above and answer: Private | Social Social Consumer's Surplus. Producer's Surplus Optimal P Optimal Q Price ($/unit)
Please draw and upload an externality graph for the "Truck Tire" market in the US. Use the data provided to draw each axis, plot the points and create the following curves: 1) Demand, 2) Supply (private), and 3) Supply (social), Also mark equilibrium on both S (private)and S (social). After you draw the curve, explain it and describe how government can use it to regulate this tire market. Price Quantity Demanded Quantity Supplied (Private) Quantity Supplied (Social) $ 300 $10 million $ 35 million $ 30 million $ 250 $15 million $30 million $25 million $ 200 $20 million $25 million $20 million $150 $25 million $20 million $15 million $ 100 30 million 15 million 10 million
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