What's NewW SolutionsW RANGKAW Draf MakW Tutorial OW chap 30 9W chapterPage LayoutQ Cl.HomeInsertReferencesReviewViewSectionTools- A A Q I .BIUA X X, A- ab A AEE A 2 AaBbCcDd AaBbAaBbC AaBbC上前,,图。utTimes New Roman- 12Cepy FormatPainterNormalHeading 1Heading 2 Heading 3- New Style "Teas fireworks displays) that can be enjoyed by free riders who do not pay for it. If all thebuyers in the two tables free ride, what quantity will private sellers supply?c. Assume that we are back to talking about bags of oranges (a private good), but that thegovernment has decided that tossed orange peels impose a negative externality on thepublic that must be rectified by imposing a $2-per-bag tax on sellers. What is the newequilibrium price and quantity? If the new equilibrium quantity is the optimal quantity, byhow many bags were oranges overproduced before?Table 4.1 Consumer Surplus(2)(3)(4)Consumer SurplusActual Price(1)PersonMaximum PriceWilling to Pay(Equilibrium Price)Bob$13$8$5 (= $13 – $8)Barb128.4 (= $12 - $8)Bill1183(= $11 - $8)Bart108.2 (= $10 - $8)1 (= $9 – $8)0 = $8 – $8)Brent8.Betty8Table 4.2 Producer Surplus(2)(3)Actual Price(4)Producer SurplusMinimum(1)PersonAcceptable Price(Equilibrium Price)Carlos$3$8$5 (= $8 - $3)Courtney4.84 (= $8 – $4)Chuck83(= $8 - $5)Cindy8.2 (= $8 - $6)Craig71 (= $8 – $7)Chad0 (= $8 – $8):1M Spell Check回包目目90%Page: 1/2 Section: 1/1SetValue: 12.4cmRow: 20 Column: 93Words: 446O Search20 A. 寺,田A A QI U A X X, A ab A AAaBbCcDd AaBb AaBbC AABBCIHeading 2 Heading 3s New Roman12NormalHeading 14.a subsidy to producers in correcting for a positive externality?2. Refer to Tables 4.1 and 4.2, which show, respectively, the willingness to pay and willingnessto accept of buyers and seller of bags of oranges. For the following questions, assume that theequilibrium price and quantity depend on the following changes in supply and demand. Alsoassume that the only market participants are those listed by name in the two tables.a. What are the equilibrium price and quantity for the data displayed in the two tables?b. Instead of bags of oranges, assume that the data in the two tables deal with a good (suchas fireworks displays) that can be enjoyed by free riders who do not pay for it. If all thebuyers in the two tables free ride, what quantity will private sellers supply?c. Assume that we are back to talking about bags of oranges (a private good), but that thegovernment has decided that tossed orange peels impose a negative externality on thepublic that must be rectified by imposing a $2-per-bag tax on sellers. What is the newequilibrium price and quantity? If the new equilibrium quantity is the optimal quantity, by|how many bags were oranges overproduced before?Table 4.1 Consumer Surplus(2)(3)(4)Consumer SurplusMaximum PriceActual Price(1)PersonWilling to Pay(Equilibrium Price)$13$8$5 (= $13- $8)Bob1284 (= $12- $8)Barb118.3 (= $11- $8)Bill1082 (= $10 - $8)Bart6.1 (= $9- $8)Brent8.0 (= $8 - $8)BettyTable 4.2 Producer Surplus(2)(3)90%Section: 1/1SetValue: 12.4cmRow: 20 Column: 93Words: 446M Spell Check

We are going to use market equilibrium definitions to solve this question.

2. Refer to Tables 4.1 and 4.2, which show, respectively, the to accept of buyers and seller of bags of oranges. For the following questions, assume that the equilibrium price and quantity depend on the following changes in supply and demand. Also assume that the only market participants are those listed by name in the two tables. a. What are the equilibrium price and quantity for the data displayed in the two tables? b. Instead of bags of oranges, assume that the data in the two tables deal with a good (such as fireworks displays) that can be enjoyed by free riders who do not pay for it. If all the buyers in the two tables free ride, what quantity will private sellers supply? c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $2-per-bag tax on sellers. What is the new equilibrium price and quantity? If the new equilibrium quantity is the optimal quantity, by how many bags were oranges overproduced before? Table 4.1 Consumer Surplus (2) Maximum Price (3) (4) Consumer Surplus (1) Actual Price Person Willing to Pay (Equilibrium Price) Bob $13 $8 $5 (= $13 - $8) 4 (= $12- $8) 3 (= $11- $8) Barb 12 Bill 11 8. 10 2 (= $10 - $8) Bart 1 (= $9 - $8) 0 (= $8 - $8) Brent 6. 8. Betty 8. 8.

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC