Consider the supply & demand diagram below representing the market for food among the obese population. Understand that there is a consumption-related externality among the obese population. Before any policy is introduced, what area(s) on the chart represent consumer surplus? Obese Group Price 00000 P₂ P₁ a b с d a b None of the above Q₁ C d Q₂ ↑ MEC MSC MPC MPB=MSB Quantity

Consider the supply & demand diagram below representing the market for food among the obese population. Understand that there is a consumption-related externality among the obese population. Before any policy is introduced, what area(s) on the chart represent consumer surplus? Obese Group Price 00000 P₂ P₁ a b с d a b None of the above Q₁ C d Q₂ ↑ MEC MSC MPC MPB=MSB Quantity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A market has the demand function Q-300-2P and the supply function Q-P-15. Production creates a positive externality of 12 per unit. (Round answers to 2 decimal places as necessary) What are the privately optimal equilibrium quantity and price? Q- P= What are the price elasticities of demand and supply at the privately optimal equilibrium? Price elasticity of demand (e)- Price elasticity of supply (n)- Which side of the market is more elastic? What are the socially optimal quantity and price? Q- Show Transcribed Text 2 What are the price elasticities of demand and supply at the privately optimal equilibrium? Price elasticity of demand (e)- Price elasticity of supply (n) = Which side of the market is more elastic? What are the socially optimal quantity and price? Q= P= C Of how much per unit? To achieve the socially optimal quantity, should the government implement a tax or a subsidy? S
A group of researchers has estimated the marginal social benefits of improvements in soil fertility per acre to be: P = -1.25Q +20 The government is considering options for supporting farmers to improve soil fertility. The government can set a fee of either $7.50, $5, $2.00 or $0 on nitrogen fertilizers. The marginal cost of providing the program is constant at $5 per acre. • What is consumer surplus under each of the government pricing options? • What is the government revenue under each pricing scenario? • What is the cost to the government under each pricing scenario? • What is the government (producer) surplus under each of the pricing options? • What options maximize total social benefits? Explain your answer.
3. How does the optimal size of the subsidy for education vary with the size of the (positive) consumption externality? Justify your answer graphically.
Qd = 1,600 - 125P Qs = 440 + 165P Quantities are measured in millions of bushels; prices are measured in dollars per bushel. a. Calculate the equilibrium price and quantity that will prevail under a completely free market. b. Calculate the price elasticities of supply and demand at the equilibrium values. c. The government currently has a $4.50 bushel support price in place. What impact will this support price have on the market? Will the government be forced to purchase corn under a program that requires them to buy up any surpluses? If so, how much? 1四 "cause" causes
Due to the decrease in the level of water in the lakes of Chapel Hill, the local government wants to reduce the consumption of tap water. They are evaluating two alternatives: to impose a minimum price per gallon of tap water consumed that is five cents greater than the actual price, or to impose an excise tax of five cents on consumption of tap water. Assume that this market is originally in equilibrium. Which of these two alternatives will deliver a bigger reduction in the quantity consumed? Why? Use graphs to explain your answer. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The supply and demand curves for corn are as follows: QD = 3,750 - 725P QS = 920 + 690P,where Q = millions of bushels and P = price per bushel. a. Calculate the equilibrium price and quantity that would prevail in the free market. b. The government has imposed a R2.50 per bushel support price. How much corn will the government be forced to purchase? c. Calculate the loss in consumer surplus that would occur under the support program.
Differentiate between demand-side market failures and supply-side market failures.
Price P X D S Q Quantity per period (Figure: Model of a Competitive Market) If there are external costs, a tax imposed on sellers will: Choose one answer. a. decrease the equilibrium quantity. b. have no effect on the equilibrium price. c. decrease the equilibrium price. d. increase the equilibrium quantity.
The government in your country is considering three programs that affect the market of cigarettes. Program 1: media campaigns and labeling requirements aimed at making the public aware 0f the dangers of cigarette smoking. program 2: A price-support program for tobacco farmers. Program 3: A cap on the number of cases of cigarettes sold per quarter at 20,000 cases. The aim of the government is to support farmers while reducing the consumption of cigarettes. What program or combination of programs should be implemented? Choose 1 Program 3 Program 1 Program 1 and 3 Program 2 Reduce quantity of cigarettes consumed and reduce price of tobacco All three programs Reduce quantity of cigarettes consumed and reduce price of cigarettes Reduce quantity of cigarettes consumed and increase price for tobacco Program 1 and Program 2 Reduce quantity of cigarettes consumed and increase price for cigarettes
Use the graph below to answer the following questions? MC M Social Demand Private Demand V Quantity (units/day) What is the socially optimal price for this market? [ Select] What is the socially optimal quantity for this market? [Select] What price will be the equilibrium price in this market? [Select ] What quantity will be the equilibrium quantity in this market? [Select] How can the government achieve the socially optimal quantity in equilibrium? [ Select ] Price ($/unit)
When may it be more efficient to supply the goods publically than privately? Please support your answer with ‘rationing system’.
How is the increase in post-secondary education (e.g. positive externality) going to effect consumer behavior in the future?