Both public goods and common resources are:A) rival in consumption.OB) nonrival in consumptionC) excludable.OD) nonexcludable.

The question is asking to identify the common characteristic between public goods and common…

Answered: Both public goods and common resources…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The market for perfume is characterized by: MPB=200-Q and MPC= 3Q with a marginal social benefit of -$12 caused by the others smelling the perfume. The externality is ______ and on the _____ side of the market. The inefficient quantity is ______ and the price is _____. The allocatively efficient quantity in the market is ______. If the government were to correct the externality, it would _______ the market by $______ per unit of perfume. Word Bank: negative, demand, 50, 150, 47, tax, 12, positive, supply, subsidy
A common resource is both excludable, non-rival excludable, rival Onon-excludable, non-rival non-excludable, rival and
Externalities: Suppose the daily inverse demand curve for gasoline in Portland is given by P = $100 – Q, the MC = 1.5Q, and the EMC = 1.5Q. Q is measured in thousands of gallons of gasoline per day. a. Graph the demand, marginal cost, and external marginal cost functions. b. How many gallons will be consumed per day if gasoline consumers do not consider the EMC of gasoline? c. How many gallons of gasoline will be consumed per day if gasoline consumers consider the EMC.
Assume that radio broadcasts are nonrival and nonexcludable. Two people, Artie and Bill, listen to the same radio station during their commute. Each person values the radio station at $3$3 per day. Both Artie and Bill loathe listening to advertisements. Listening to advertisements makes Artie and Bill each worse off by $1.50$1.50 per day. The radio station needs $2$2 per day to continue operating, which it currently earns from advertisers ($2$2 per day is exactly what the airtime is worth to the advertisers). The radio station is considering asking for donations from Artie and Bill and getting rid of the advertising. Artie and Bill can choose to donate to prevent advertisements or not. If only one chooses to donate, he must donate the whole $2$2 to get rid of the ads. If both choose to donate, each pays $1.$1. Assume that both Artie and Bill are each trying to gain the most net benefit possible, and that they do not cooperate with each other. What is the socially efficient way to…
In the market for a certain pesticide, the following equations represent the private demand and supply: Private Demand: QD = 160 - P Private Supply: QS = 4P The use of this pesticide has a negative externality that affects nearby ecosystems, which is not reflected in the market price. The external cost is estimated to be $5 per unit of pesticide. By how much is the pesticide overconsumed under perfect competition? A) 1 units B) 3 units C) 4 units D) 5 units E) none of the above
Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 22 - 2E_1 MAC_2 = 10 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a cap and trade policy and sets the cap equal to the socially efficient level of emissions (E*_Agg). If firm 2 is initially grandfathered 2 permits, it will buy ____ more permits. (Note: your answer can be positive or negative; if it is positive, the firm is buying additional permits; if it is negative, the firm sells permits. So, for example, an answer of -10 implies that the firm sells 10 permits)
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The marginal private cost of fertilizer production is MPC = 40 + Q, where Q is the amount of fertilizer produced. The marginal benefit (both private and social) of fertilizer is MB = 340 – 4Q. In addition to the private costs faced by producers of fertilizer, people who walk or drive past the area where the fertilizer is produced also face costs because of the horrible smell of the fertilizer; the marginal external cost generated by the fertilizer is MEC = 20 + 3Q. How much fertilizer will be produced by the free market? What is the efficient quantity of fertilizer? Calculate the amount of deadweight loss in this market, and explain what this number means. Suppose that the government realizes that the current amount of fertilizer produced by the free market is inefficient and decides to correct this inefficiency by taxing the production of fertilizer. How large should the tax per unit of fertilizer be to induce the market to produce the efficient amount, and why would such a tax…

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Both public goods and common resources are: A) rival in consumption. OB) nonrival in consumption C) excludable. OD) nonexcludable.