4. The graph to the right shows supply and demand forplanting trees, based on private costs and benefits. Treessequester carbon, meaning that they help counteractpollutants that contribute to climate change.a. Suppose that the carbon sequestration that results fromplanting a tree is worth $4. Graph the social supplycurve for tree planting, based on the total socialbenefits of trees.Price ($)2018161412108b. How many trees will be planted if markets onlyconsider private benefits?c. What is the socially optimal quantity of trees,supposing that there are no demand-side externalities?d. What can the government do to correct the externalitycreated by this market?e. When the government imposes the socially optimum correction, how much does surplus rise?64.21020304050607080Trees

[a] In the mentioned figure, there is a rightward shift in the supply graph indicating the social…

4. The graph to the right shows supply and demand for planting trees, based on private costs and benefits. Trees sequester carbon, meaning that they help counteract pollutants that contribute to climate change. a. Suppose that the carbon sequestration that results from planting a tree is worth $4. Graph the social supply curve for tree planting, based on the total social benefits of trees. b. How many trees will be planted if markets only consider private benefits? c. What is the socially optimal quantity of trees, supposing that there are no demand-side externalities? d. What can the government do to correct the externality created by this market? e. When the government imposes the socially optimum co

4. The graph to the right shows supply and demand for planting trees, based on private costs and benefits. Trees sequester carbon, meaning that they help counteract pollutants that contribute to climate change. a. Suppose that the carbon sequestration that results from planting a tree is worth $4. Graph the social supply curve for tree planting, based on the total social benefits of trees. b. How many trees will be planted if markets only consider private benefits? c. What is the socially optimal quantity of trees, supposing that there are no demand-side externalities? d. What can the government do to correct the externality created by this market? e. When the government imposes the socially optimum co

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 29
Graphically, the effects of an external benefit can be shown as A. a leftward shift of the market demand curve. B. a leftward shift of the market supply curve. C. a downward movement along the market demand curve. D. a rightward shift of the market demand curve.
b. If firms' abatement costs fall, how, if at all, does this affect the amount of pollution that firms will emit if there is a limit on pollution?
5.. "Since a public good is enjoyed by all members of society, willingness to pay for the good will not diminish as the amount produced increases." Evaluate and use an example to support your answer. This statement is (correct incorrect). Public goods face (increasing, constant, diminishing ) returns like any other good. Consider the number of highways in a town, for example. Citizens of a town are very willing to pay for the first highway, as it produces large gains to the town. Successive highways produce (more and more, less and less ) willingness to pay because the citizens face lower and lower gains from the increased number of highways. In a town of, say 20,000, 15 highways (would, would not) produce much more benefit than just 2 or 3 highways because of ( increasing, constant, diminishing ) returns.
PRICE OF CARS 1. Efficiency in the presence of externalities Cars impose many external costs on society: carbon dioxide emissions that contribute to air pollution, congestion on roadways, and so on. Therefore, the market equilibrium quantity of cars is not equal to the socially efficient quantity. The following graph shows the demand for cars (their marginal private benefit), the supply of cars (the marginal private cost of producing them), and the marginal social cost of cars, including both the marginal private cost and external costs. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially efficient quantity. Demand (MPB, MSB) QUANTITY OF CARS As a result, the market output is MSC + Market Output Socially Efficient Output Supply (MPC) the socially efficient output. (?) Which of the following policies could help the government achieve the socially efficient outcome? Check all that apply. ☐…
What are the two characteristics of public goods? What is the free-rider problem as it related to public goods? Is U.S. border patrol a public good or a private good? Explain.
The figure below shows supply and demand for planting trees, based on private costs and benefits. Trees sequester carbon, meaning that they help counteract pollutants that contribute to climate change. Price of trees (S) 22114 20 18 16 12 10 8 6 4 2 0 MCpvt D-MBMB, 10 20 30 40 50 60 70 80 90 100 Quantity of trees Tools Social Cost DWL
Consider the market for fire extinguishers.a. Why might fire extinguishers exhibit positive externalities?b. Draw a graph of the market for fire extinguishers, labeling the demand curve, the social-value curve, the supply curve, and the social-cost curve.c. Indicate the market equilibrium level of output and the efficient level of output. Give an intuitive explanation for why these quantities differ.d. If the external benefit is $10 per extinguisher, describe a government policy that would yield the efficient outcome.
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?
1. Suppose 20 people each have the demand Q = 20 − P for streetlights and 5 people have the demand Q = 18 − 2P for streetlights. The cost of building each streetlight is $10.a. Write the social marginal benefit equation: MBS = _______ - _________ Q/2. Hint: Type integers.b. The socially optimal number of street lights is ________. Hint: Type the number in two decimal places. 2. The __________ theorem states: As long as negotiation costs are negligible and affected consumers can negotiate freely with each other, the court could allocate the entitlement to either party, and an efficient allocation would result. Hint: The answer is case sensitive. PLEASE FILL OUT THE SPACES