Concept Question 1.5E Question HelpThe graph to the right depicts the U.S. textile industry in competitive equilibrium. The100-curve MEC shows the marginal external cost of production that is not currently reflectedin the market price.90-1.) Using the line drawing tool, draw the marginal social cost curve. Label it 'MsC.80-70-2.) Using the point drawing tool, indicate the socially efficient level of output and price.Label it 'E'Carefully follow the instructions above, and only draw the required objects.S=MC60-50-40-30-20-MEC100-50 100 150 200 250 300 36o 400 450 500Industry Output

(1) The marginal social cost (MSC) is the sum of marginal cost (MC or marginal private cost MPC) and…

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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 graph shows the unregulated market for electricity. The marginal external cost of the pollution created is equal to the marginal cost With no government action to control pollution, what is the marginal social cost of the electricity generated and the deadweight loss created? Draw a point to show the marginal social cost when production is 750 kilowatts per day. Label it 1. Draw the marginal social cost curve. Label it MSC. Draw a point to show the quantity of electricity produced and the marginal social cost with no pollution control. Label it 2. Draw a shape to show the deadweight loss with no pollution control. Label it. The deadweight loss created by the pollution is is $ >>> Remember that the price given on the yaxis is in cents but you must answer in dollars. 447 40- 36- 32- 26- 244 20 16- 12- C 44 0 Price and cost (cents per kilowatt) S-MC 0 D=MSB 100 200 300 400 500 600 700 800 Quantity demanded (kilowatts per day) >>> Draw only the objects specified in the question. 2
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Fish that swim in international waters are a common good that are freely available toanyone who wants to catch them, but this leads to the problem of over-fishing. At theheart of this problem lies an externality. Using appropriate diagrams andaccompanying discussion, show both how and why this over-fishing takes place. Inyour explanation, identify the source of the externality.
The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. Which quantity is socially optimal (i.e. what is the efficient quantity)? What is the deadweight loss generated by the externality?
K The graph illustrates the unregulated market for pesticide. When the factories produce pesticide, they also create waste which they dump into a lake on the outskirts of a small town. The marginal external cost of the dumped waste is equal to the marginal private cost of producing pesticide (that is, the marginal social cost of producing the pesticide is double the marginal private cost). What is the quantity of pesticide produced if no one owns the lake and what is the efficient quantity of pesticide? What is the deadweight loss? *** If no one owns the lake, the quantity of pesticide produced is 30 tons a week. The efficient quantity of pesticide is 20 tons a week. If no one owns the lake, the deadweight loss is $ >>> Answer to 2 decimal places. a week. 1260 1080- 900- 720- 540- 360- 180- 0- 0 Price (dollars per ton) | 4 S D 30 60 90 120 150 180 210 240 270 300 Quantity (tons of pesticide per week) Q P
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I would like help with this question. The graph should be the one answered.
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4. Consider a manufactured good whose production process generates pollution. The demand for the product is Q-100-3P. The market supply function is Q=P. The marginal external cost is MEC=2Q. J a.What is the equilibrium price and quantity in a market with no environmental policy? Graph your answer. b. What is the deadweight loss from the pollution damage. Label this on your graph. c. What is the socially optimal quantity of the good and the socially optimal price? Label on your graph. What is the price elasticity of demand and the price elasticity of supply at this optimum? d. What is the emissions tax that needs to be imposed to achieve the social optimum? Add this to your graph. e. What is the economic incidence of this emissions tax? In other words, what proportion of this tax will be paid by producers of this product and what proportion of the tax will be paid by consumers?
The diagram below represents the market for education. Assume that education provides several external benefits. a. Using the diagram, show the social demand curve for this market. Instructions: Use the tool provided 'Social value' to plot this line on the graph. Plot only the endpoints of the line. Tools Supply Private Social value Demand Private Price

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