3:029. A study finds that leaf blowers make too muchnoise, so the government imposes a $10 tax onthe sale of every unit to correct for the social costof the noise pollution. The tax completelyinternalizes the externality. Before the correctivetax, Blown Away Manufacturing regularly soldblowers for $100. After the tax is in place, theconsumer price for leaf blowers rises to $105.a. Describe the impact of the tax on the numberof leaf blowers sold.b. What is the socially optimal price to theconsumer?c. What is the private market price?d. What net price is Blown Away receiving after itpaysthe tax?ㅈㅈ+8

Since you have asked multiple subparts, we would be answering the first three for you. To get the…

Answered: 9. A study finds that leaf blowers make…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Use the graph below to answer the two questions on the right. Price If a positive externality exists and the government intervenes, which curve shifts and in what direction? Ssocial internal If a negative externality exists and the government does intervene, which curve shifts Docial and in what direction? Dinternal Quantity
The production Compact Fluorescent Lightbulbs (CFL) use mercury in their production process. Mercury is a heavy metal and considered bad for the environment. Suppose the marginal external cost is $5 per lightbulb and the government levies a corrective tax of $5.50 per lightbulb. With this new tax: Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b Question 4 с d The price will be below the marginal social cost. Not enough light bulbs will be produced. The price will be below the marginal social benefit. The price will be below the marginal cost to produce light bulbs.
Macmillan Learning The accompanying graph depicts the marginal social cost (MSC) and marginal social benefit (MSB) of pollution emissions. Move the point, P, to the point representing the optimal level of pollution. What is the optimal quantity of pollution? metric tons The optimal quantity of pollution is not zero because: 1,000 Dollars 900 800 700 600 500 400 300 200 100 0 27 2 P 3 4 5 6 Metric tons of pollution 7 8 9 MSC MSB 10
1. When a production externality has a beneficial effect on a bystander at the market equilibrium a. the market will be efficient b. the social cost of production is less than the private cost c. society is unlikely to benefit from production subsidies d. the private benefit from consumption is less than the social cost of production 2. In the short term, we would expect home construction to have a: a. High elasticity of demand b. Low elasticity of demand c. Low elasticity of supply d. High elasticity of supply 3. Which of the following would be associated with monetary policy operations in response to an economic downturn: a. A shift of the money demand curve to the right. b. A shift of the money supply curve to the right. c. A shift of the money demand curve to the left. d. A shift of the money supply curve to the left. 4. If the government cuts government spending, then over time the government budget deficit: a. will definitely rise b. will definitely fall c. may fall, or…
7) A Detroit factory is polluting more than the socially optimal amount. The city government then imposes a lump sum tax on the business, but the business didn't change how much they were polluting. Explain what was wrong with the city's decision.
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for electric cars. Suppose that a electric car manufacturing facility dumps sludge into a nearby river, creating a negative externality for those living downstream from the facility. Producing additional electric cars imposes a constant per-unit external cost of $600. The following graph shows the demand (private value) curve and the supply (private cost) curve for electric cars. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $600 per unit. PRICE (Dollars per unit of electric cars) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0 + 1 O □ ☐ O 2 3 4 5 QUANTITY (Units of electric cars) The market equilibrium quantity is ☐ Supply (Private Cost) 6 Demand (Private Value) 7 Social Cost (?) units of electric cars, but the socially optimal quantity of electric car production is To create an incentive for the firm to produce the socially optimal…
Suppose electricity generates a negative externality in production If so, then A. the marginal social cost of electricity is less than the marginal private cost . B. the marginal social cost of electricity equals the marginal private cost . C. the marginal social benefit of electricity is less than the marginal private benefit . D. the marginal social cost of electricity equals the marginal social benefit. E. the marginal social cost of electricity is greater than the marginal private cost.
Refer to Figure. The graph represents a market in which 24 22 22 Price 18 16 81 Social cost (private cost and external cost) Supply (private cost) Demand (private valne) 120 160 Quantity a. Othere is no externality. b. Othere is a positive externality. c. Othere is a negative externality. d. The answer cannot be determined from inspection of the graph.
1. Production of widgets results in emissions of a harmful pollutant, at a rate of 1 ton of pollution per widget produced. The marginal cost of producing widgets is $4 per widget. The demand curve for widgets is 9 - Q, where Q is the quantity of widgets. The widget market is competitive, such that both consumers and producers are price takers. The government is considering policies to address this negative externality. a. The first policy being considered is a technology standard. The abatement techonol- ogy being required costs $2 per widget. What is the social cost of this policy? b. The marginal damages of the pollutant are constant and valued at $1 per ton. What are the social benefits of the technology standard? c. Would the technology standard represent an improvement in economic efficiency for society? Why or why not? d. Now assume that the policy maker imposes a Pigouvian tax on the emissions of the pollutant. What are the social benefits of this policy? e. What are the net…
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…
Economics Which of the following statements is TRUE? I. In the face of a negative externality, a monopolistic market produces less than the socially optimal quantity of output. II. If public transport creates an external marginal benefit, the marginal social benefit of public transport services will always exceed their private marginal benefit. III. In unregulated markets, positive externalities create deadweight losses, but negative externalities do not. IV. In the face of a positive externality, a perfectly competitive market produces more than the socially optimal quantity of output. II and IV are correct II only is correct I and III are correct I and IV are correct Ensure that you provide an appropriate rationale for the answer provided included marking use of appropriate diagrams where possible.
. Draw a graph for a market where a negative externality occurs. Show the market supply curve and the market outcomes for price and quantity. Show the supply curve that takes all the costs in to account. Show the price and quantity that would be best for society when we take all the costs of production and consumption in to account.

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