Consider the following table, describing each person's willingness to pay for different levels (units) mosquito control.Mosquito control is a public good for this society.Demand for Mosquito ControlPerson ALevelWTP($)Person BPerson CWTP($)WTP($)10251615202014123015128.4010106.50583The marginal cost of producing one unit of mosquito control is $35 and constant.Assuming there is no Free-Rider issue, the private level of mosquito control supplied would beunits.The optimal level of mosquito control however, would beunits.

Consider the following table, describing each person's willingness to pay for different levels (units) mosquito control. Mosquito control is a public good for this society. Demand for Mosquito Control Person A Level WTP($) Person B Person C WTP($) WTP($) 10 25 16 15 20 20 14 12 30 15 12 8 40 10 10 50 8 3 The marginal cost of producing one unit of mosquito control is $35 and constant. Assuming there is no Free-Rider issue, the private level of mosquito control supplied would be units. The optimal level of mosquito control however, would be units.

Consider the following table, describing each person's willingness to pay for different levels (units) mosquito control. Mosquito control is a public good for this society. Demand for Mosquito Control Person A Level WTP($) Person B Person C WTP($) WTP($) 10 25 16 15 20 20 14 12 30 15 12 8 40 10 10 50 8 3 The marginal cost of producing one unit of mosquito control is $35 and constant. Assuming there is no Free-Rider issue, the private level of mosquito control supplied would be units. The optimal level of mosquito control however, would be units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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19.6 Suppose there are only two individuals in society. Person A’s demand curve for mosquito control is given by qa = 100- pfor person B, the demand curve for mosquito control is given by qb= 200-p Suppose mosquito control is a pure public good; that is, once it is produced, everyone benefits from it. What would be the optimal level of this activity if it could be produced at a constant marginal cost of $120 per unit? If mosquito control were left to the private market, how much might be produced? Does your answer depend on what each person assumes the other will do? If the government were to produce the optimal amount of mosquito control, how much will this cost? How should the tax bill for this amount be allocated between the individuals if they are to share it in proportion to benefits received from mosquito control?
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The production of plastic creates pollution, which, in sufficient quantities, can harm people’s health. Assume that the plastic industry is perfectly competitive. We know that the industry will produce more output than is socially optimal, since firms do not bear the costs of pollution (that is, pollution is a negative externality). Without government intervention, the market output will be 50 million units at a price of $10, where $10 is the minimum AC of firms in the industry. This cost is the long-run marginal private cost (MPC) of making plastic. The marginal social cost (MSC) of plastic is $15 at this level of output; the MSC includes the external social cost of pollution. Since MSC exceeds price, output is too high. The socially optimal output is 30 million units at a price of $13. This output can be attained by levying an excise tax of $3 on each unit of plastic. Assume that the demand and marginal social cost (MSC) curves are linear, as shown in the graph below. (a) Calculate…
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Back to Assignment Attempts Keep the Highest / 2 9. Private solutions to correct for externalities Consider the following scenario: Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted by the minerals in the waste matter. The local office of a nonprofit environmental organization collects enough donations to fund a campaign to stop the farm's pollution. Which of the following types of private solutions to the externality of pollution has occurred in this case? O Charities O Integration of different types of businesses through merger or acquisition O Moral codes and social sanctions O Contracts It's important to note that sometimes private solutions to externalities do not work. For example, this occurs when an excessive amount of time or money must be spent for parties to reach an agreement. This describes the problem of Grade It Now Save & Continue…
Draw figures similar to the provided figure (i.e. producer curves in a perfectly competitive market including marginal social cost, marginal private cost, price) and show the deadweight losses associated with a) positive externalities b) negative externalities NOTE: take line p = 260 as the marginal benefit curve
The market for plasticans is perfectly competitive. Market Supply is givenby Q=6P and Market Demand is given by Q=499-2P. Each extra unit ofplastican produced imposes a negative externality of $8. What is the totalcost of the externality at the market equilibrium?
There are two consumers of mosquito abatement, a public good. Dash's benefit from mosquito abatement is given by MB D = 100 - Q, where Q is the quantity of mosquito abatement. Lilly's benefit is given by MBL = 60 - Q.a. Calculate the total marginal benefit, MBT. b. Suppose that mosquito abatement can be provided at a marginal cost of MC = 2Q. Find the optimal level of mosquito abatement. c. How much benefit do Dash and Lilly enjoy at the optimal level of mosquito abatement? (Assume Dash and Lilly do not have to bear any of the cost personally, but that abatement is provided by the government at no direct cost to the recipient.)
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One possible way to solve a negative externality problem is to increase interest rates place a subsidy on production. limit immigration place a tax on production
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