39) The figure above illustrates the marginal private cost and the marginal social cost to the city of Halifax for each rock concert that is offered. It also illustrates the marginal private benefit. There is no external benefit. The efficient number of concerts in Halifax is A) 0. B) 5. C)) 10. D) 20. E) 15.

39) The figure above illustrates the marginal private cost and the marginal social cost to the city of Halifax for each rock concert that is offered. It also illustrates the marginal private benefit. There is no external benefit. The efficient number of concerts in Halifax is A) 0. B) 5. C)) 10. D) 20. E) 15.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5) Mr. Leon is at it again! He vandalized a public park. Now society has to clean it up. Based on the numbers below what would be the socially optimal amount that should be cleaned up? % cleaned total benefits total costs 25 $10,000 $1,000 50 $15,000 $4,000 75 $18,000 $7,000 100 $19,000 $10,000 *Show the marginal benefits and marginal costs, graphically.
2) Use the figure below to answer the following questions. Price and cost (dollars per tonne of paper) MSC 15 MC 14 13 12 11 D = MSB %3D 30 40 50 60 70 Quantity of paper (tonnes) Figure 1 a) Refer to Figure 1 What is the unregulated equilibrium in the paper market? b) Refer to Figure 1 What is the marginal external cost in this market? c) Refer to Figure 1 What is needed to achieve the efficient output in the market?
When equilibrium output in a competitive market is at the socially efficient level: a) only market values are incorporated into marginal benefits to consumers and marginal costs of production. b) net social value is as large as possible. c) the marginal benefit to consumers may exceed or be less than the marginal cost of production. d) total willingness to pay is as large as possible.
Compared to ideal economic efficiency, when the production of a good generates external benefits, competitive markets will likely result in an output that is too A) large and a price that is too high. B) large and a price that is too low. C) small and a price that is too high. D) small and a price that is too low.
2. Refer to Graph 10-1. Assume the externality is not internalised. What is the loss to society from the last unit of the good produced by the market? A. P3-P2 B. P2-P1 C. P3-P1 D. ZeroGraph 10-1 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
6. A paper mill discharges chemicals into a river that washes the shores of a downstream resort area. The private cost, social cost, and marginal benefit associated with the production of paper are given by the following equations: PMC = 5 + Q, SMC = 10 + 2Q, and MB = 35 -0.5Q. a. Provide a labelled diagram to illustrate how the competitive free market will not produce the socially optimal amount of output. b. Illustrate the efficiency loss. C. Illustrate how a per-unit tax could be used to correct this problem.
2) The following table shows how the marginal benefit of a service varies for five consumers. Quantity 1 4 Serkan 150 125 100 75 Asuman 125 100 75 50 Bahar 100 75 50 25 Murat 200 150 125 125 Meriç 600 400 200 150 a) Derive the demand curve for this service assuming that it is a public good. b) If marginal cost of the good is 850, what is the efficient output of the public good? c) If marginal cost of the good is 425, what is the efficient output of the public good? d) If marginal cost of the good is 850, what is the efficient output assuming it is private good?