An example of a positive externality is: a) the profit made from the sale of electric vehicles b) the penalty paid by a coal mining company after it is caught illegally dumping toxic waste into a river c) knowledge spillovers that result when a maker of microchips invests in research and development d) the price paid by an electricity company for an emission certificate on the European Trading Scheme, allowing it to emit a specified level of CO2

An example of a positive externality is: a) the profit made from the sale of electric vehicles b) the penalty paid by a coal mining company after it is caught illegally dumping toxic waste into a river c) knowledge spillovers that result when a maker of microchips invests in research and development d) the price paid by an electricity company for an emission certificate on the European Trading Scheme, allowing it to emit a specified level of CO2

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 8QP

See similar textbooks

Similar questions

Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.
An example of a positive externality is: a) the profit made from the sale of electric vehicles b) the penalty paid by a coal mining company after it is caught illegally dumping toxic waste into a river c) knowledge spillovers that result when a maker of microchips invests in research and development d) the price paid by an electricity company for an emission certificate on the European Trading Scheme, allowing it to emit a specified level of CO2
Suppose that the xyz industry produces a product that result in negative external cost to society. this information suggest that
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external (not social) cost?
What is the definition of an externality? Click or tap a choice to answer the question. a cost or benefit of market activity to an outside party influence on market activity by an outside party any cost associated with a market activity any benefit associated with a market activit
How do you calculate the dollar value of the net gain to society from correcting the externality
Compare the emission fee vs. the cap-and-trade system to deal with an externality, in the presence of uncertainty on the marginal cost of pollution reduction
Suppose that in greater Sydney, the demand for flowering plants is given by P = 60 – Q, and supply is given by P = 0.2Q, where Q represents thousands of plants. Because people enjoy seeing flowers as they pass by others’ houses, these plants produce a positive externality. Suppose that each plant produces a marginal external benefit equal to $6. What will be the market price and the quantity supplied of flowering plants? What is the socially optimal number of plants? Calculate the lost economics surplus associated with the competitive market outcome. How would you suggest that the government correct the inefficiency caused by this externality?
ils Consider the market for electric cars. Suppose that a electric car manufacturing facility dumps Slouge in externality for those living downstream from the facility. Producing additional electric cars imposes a constant per-unit external cost of $420. 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 $420 per unit. 1400 1250 PRICE (Dollars per unit of electric cars) 1120 960 840 700 160 420 200 140 0 D 1 O O 3 QUANTITY (Units of electric cars) 0 Supply (Private Cost) Demand (Private Value) Social Cost The market equilibrium quantity is units of electric cars, but the socially optimal quantity of electric car production is units To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a per unit of electric cars.
A huge paper recycling plant sits about a mile away from a college campus. When the wind is blowing towards campus, emissions from the plant can be smelled on campus. The marginal social benefit of recycled paper can be represented by the equation MSB=600-Q. The market internalizes the external benefits of recycled paper but not the external costs. The marginal external cost of the emissions is given by MEC=Q. The supply of recycled paper can be represented P=2Q. In the absence of any bargaining or government intervention, what are the private competitive market output and price of paper? What is the optimal tax on output of recycled paper? (solve for the number)
An example of an externality is:a) the irritation you feel when you drive past a gas station offering a 20% discount on gas, having just filled your tank for full price at a station 100 meters up to the roadb) the penalty paid by a coal mining company after it is caught illegally dumping toxic waste into a riverc) the injury suffered by a cyclist who, in your delirious rage over missing the bargain at the gas station, you inadvertently force off the road as you drive past the gas stationd) the price paid by an electricity company for an emission certificate on the European Trading Scheme, allowing it to emit a specified level of CO2
Distinguish between positive and negative externalities in an economy