242218166PriceO 120 units40 units0 units120O160 units160Social cost (pavate costand extemal cost)The graph shows the market for a chemical that produces a negative externality. The socially optimal quantity isSupply(private cost)Demand(pavate value)Quantity

Negative externality is a situation when the operation of one party creates a negative effect on the…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Time left 0:27:07 Suppose that flu shots create a positive externality equal to $12 per shot. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced? Select one: The equilibrium quantity is less than the socially optimal quantity. O a. O b. The equilibrium quantity is greater than the socially optimal quantity. Oc. They are equal. O d. No relationship exists. Next page 26°C Mostly cloudy tour on this page Type here to search
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Only typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…
Which statement about externalities is wrong? O Markets are typically not efficient in dealing with externalities O Externalities can be positive or negative O A firm naturally takes into account negative externalities that result from their production O Interventions such as carbon taxes can help correct externalities gative externalities imply that the social cost is high than the internal (or private) cost
ģi Refer to the table below, which presents information on a market that provides positive externalities on society. Private marginal benefit Marginal cost $300,000 $340,000 $310,000 $330,000 $320,000 $320,000 $330,000 $310,000 $340,000 $300,000 $350,000 $290,000 Calculate the quantity that would be produced if society did not incorporate the social marginal benefits of this good or service. Type your answer... Quantity 6,000 7,000 8,000 9,000 10,000 11,000 F1 a 2 W JAN X Q 18 F2 # 3 20 F3 F $ 4 F4 R % 5 F5 T MacBook Air A 6 F6 Y & 887 stv F7 U * 00 8 FB O ( 9 Private+social marginal benefit $360,000 $350,000 $340,000 $330,000 $320,000 $310,000 F9 1 W 0 F10 Aa zoom P F11 Submit F12 = IT ľ
Demand BA Quantity Refer to Externality graph above. Point A is the current equilibrium level of output of this product and point B is the socially optimal level of output for the society. S is the supply curve that includes private costs. St is the supply curve that includes public costs. The graph indicates that there is (arc): O a. positive externalities from product production. O b. spillover costs from the production of this product. Oc. spillover benefits to the production of this product. O d. an underallocation of resources to product production. Price %24
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In a market where negative externalities are associated with consumption and production, the equilibrium will not be efficient because Multiple Choice O too few resources will be allocated toward producing the good. costs of production will, on average, be too high. firms will shut down until costs are reduced. Help too many resources will be allocated toward producing the good. Save & E
A market with negative externalities will tend to compared to a market producing the socially optimal output. O overproduce and sell at a lower price O overproduce and sell at a higher price underproduce and sell at a higher price O underproduce and sell at a lower price

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24 22 18 16 Price 120 160 O 120 units O 40 units O0 units O160 units Social cost (pavate cost and extemal cost) Supply (pavate cost) Demand (pavate value) Quantity The graph shows the market for a chemical that produces a negative externality. The socially optimal quantity is