14.)Beekeepers' demand curve for beehives is PD = 36 – QD. The supply curve for beehives isgiven by PS = 2QS. Bees from beekeepers' beehives increase the pollination of local gardenersplants. Local gardeners value the external benefit of the increased pollination from a beehive at$12. What is the marginal benefit of society (MBS) curve for this market?a.) MBS = 36 – Q= 48 – Qb.) MBSc.) MBS = 2Q= 12 + 2Qd.) MBS15.)Beekeepers' demand curve for beehives is PD = 36 – QD. The supply curve for beehives isgiven by PS = 2QS. Bees from beekeepers’ beehives increase the pollination of local gardenersplants. Local gardeners value the external benefit of the increased pollination from a beehive at$12. What is the marginal cost of society (MCS) curve for this market?a.) MCS = 36 – Qb.) MCS = 48 – Qс.) MCS 3 2Qd.) MCS = 12 + 2Q

Answer (4): The demand curve shows the private marginal benefit curve. If there is an external…

14.)Beekeepers' demand curve for beehives is PD = 36 – Qº. The supply curve for beehives is given by PS = 2Q$. Bees from beekeepers’ beehives increase the pollination of local gardeners plants. Local gardeners value the external benefit of the increased pollination from a beehive at $12. What is the marginal benefit of society (MBS) curve for this market? a.) MBS = 36 – Q b.) MBS = 48 – c.) MBS = 2Q d.) MBS = 12 + 2Q -

14.)Beekeepers' demand curve for beehives is PD = 36 – Qº. The supply curve for beehives is given by PS = 2Q$. Bees from beekeepers’ beehives increase the pollination of local gardeners plants. Local gardeners value the external benefit of the increased pollination from a beehive at $12. What is the marginal benefit of society (MBS) curve for this market? a.) MBS = 36 – Q b.) MBS = 48 – c.) MBS = 2Q d.) MBS = 12 + 2Q -

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Soybeans are produced and sold in a perfectly competitive market. The fertilizers used in soybean production generate a negative externality by seeping liquid contaminants into local rivers. (a) Draw a correctly labeled graph of the soybean market, and show each of the following. (i) The marginal private cost, labeled MPC (ii) The marginal social cost, labeled MSC (iii) The marginal social benefit, labeled MSB (iv) The market equilibrium quantity, labeled QC (v) The socially optimal quantity, labeled QS (vi) The area of the deadweight loss, shaded completely (b) Assume the government sets a binding price floor such that the quantity demanded in the market is between QS and QC. (i) What will happen to the quantity produced? (ii) Will the price floor reduce the deadweight loss? Explain. (c) Assume instead of a price floor, the government decides to impose a lump-sum tax. What will happen to the socially optimal quantity? Explain. (d) Assume instead of a lump-sum tax, the government…