52. (Table: Street Cleanings) Use Table: Street Cleanings. Suppose that the marginal cost of each street cleaning is $18. Which statement is TRUE? Table: Street Cleanings Number of Street Cleanings per Month 0 1 4 5 Peter's Wendy's Total Total Benefit Benefit $0 10 18 24 28 30 $0 8 15 21 26 30 O If Wendy and Peter were the only people in society, the efficient number of street cleanings would be at least two per month. ○ If Wendy and Peter were the only people in society, the efficient number of street cleanings would be one per month. ○ If the city decided to clean the streets only once per month, Wendy would be willing to pay the entire cost of the cleaning. O If the city decided to clean the streets only once per month, Peter would be willing to pay the entire cost of the cleaning.

52. (Table: Street Cleanings) Use Table: Street Cleanings. Suppose that the marginal cost of each street cleaning is $18. Which statement is TRUE? Table: Street Cleanings Number of Street Cleanings per Month 0 1 4 5 Peter's Wendy's Total Total Benefit Benefit $0 10 18 24 28 30 $0 8 15 21 26 30 O If Wendy and Peter were the only people in society, the efficient number of street cleanings would be at least two per month. ○ If Wendy and Peter were the only people in society, the efficient number of street cleanings would be one per month. ○ If the city decided to clean the streets only once per month, Wendy would be willing to pay the entire cost of the cleaning. O If the city decided to clean the streets only once per month, Peter would be willing to pay the entire cost of the cleaning.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(Figure: The Socially Optimal Quantity of Emissions from Coal Production) Use Figure The Socialy Optimal Quarety of Emissions from Coal Production in the figure, firms are the only beneficiaries of polution, and costs are borne solely by others in the society. Without government intervention Marginal social cost, marginal social benefit MSC of pollution MSB of pollution Quantity of pollution emissions (tons) O The outcome cannot be determined without more information Orms will continue to polute until the marginal benefit to them is $200 O firms will continue to pollute until the marginal benate to them is zero. O the quantity of pollution will be optimal.
5. Property rights and market failures Loggers are much likely to supply wood to the market if property rights are not enforced. In the presence of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. Market Market Failure Power Externality A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream. A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food.
(Table: City Sanitation in Winnetka) Use Table: City Sanitation in Winnetka. Suppose that the marginal cost of each street cleaning is $6. How many street cleanings will there be? Table: City Sanitation in Winnetka Number of Street Cleanings 10 1 2 3 14 QUESTION 29 5 05 03 2 Edwin's Total Benefit Geraldine's Total Benefit $0 10 18 24 28 30 $0 18 15 21 26 30
7. (Market for Pollution Rights) The graph in page 302 shows the market for pollution rights. a. If there are no restrictions on pollution, what amount isdischarged? b. What is the quantity supplied and the quantitydemanded if the government restricts the amount ofdischarge to Q* but gives the permits away? c. Where is market equilibrium if the government sells thepermits at the market-clearing price? Illustrate this on the graph.
4. Consider the market for face masks. an d) Briefly explain whether you agree or disagree with the following statement: "Carbon emissions from cars cause breathing difficulties for people with respiratory illnesses. The total benefit to society is greatest when we completely eliminate the carbon emissions."
Antonio and Caroline are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of alfalfa and barley each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing alfalfa or barley or to produce alfalfa on some of the land and barley on the rest. Alfalfa Barley (Bushels per acre) (Bushels per acre) Antonio 40 8 Caroline 28 7 ___________has an absolute advantage in the production of alfalfa, and __________ has an absolute advantage in the production of barley. Antonio's opportunity cost of producing 1 bushel of barley is ____ bushels of alfalfa, whereas Caroline's opportunity cost of producing 1 bushel of barley is______ bushels of alfalfa. Because Antonio has a ______ opportunity cost of producing barley than Caroline,________ has a comparative advantage in the production of barley and_______ has a comparative advantage in the production of alfalfa.
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4 An increase in per capita production and incomes can be expected to have a large effect in reducing emissions that lead to global warming. O false O true
8. Stody Questions and Problems #8 California once proposed legislation that would have required 10% of its car fleet to be nearly emissions-free by the year 2003. This mandate spurred electric vehicle research. Such vehicles could be powered by photovoltaic cells or by batteries that are recharged using an electrical outlet. True or False: Electric vehicles that use electrical outlets are not emissions-free because electric production requires coal, nuclear, or hydroelectric plants, none of which are pollution-free. O True False Electric vehicles that are powered by photovoltaic cells pollution. emissions-free because the manufacturing of PVCs
6 Assume that you are a rational person and that you visit a grocery store to buy bananas. Use the marginal benefit and marginal cost (utils) principle, described in Unit 1, to explain how many bananas you will ultimately buy.
INTR.27 A city is debating whether or not to build a new park. The city owns the land, having purchased it 50 years ago for $25,000. A local restaurant developer has offered $700,000 for the land. The development costs for the park would be $100,000. What is the minimum amount of the benefits for the park development in order to be rational for the city? a $100,000 b $125,000 c $800,000 d $825,000