DemandBAQuantityRefer to Externality graph above. Point A is the current equilibrium level of output of thisproduct and point B is the socially optimal level of output for the society. S is the supplycurve that includes private costs. St is the supply curve that includes public costs. The graphindicates that there is (arc):O a. positive externalities from product production.O b. spillover costs from the production of this product.Oc. spillover benefits to the production of this product.O d. an underallocation of resources to product production.Price%24

In the presence of externalities, there will be spillover cost or benefit to 3rd party who is not…

Demand BA Quantity Refer to Externality graph above. Point A is the current equilibrium level of output of t product and point B is the socially optimal level of output for the society.S is the supply curve that includes private costs. St is the supply curve that includes public costs. The gra indicates that there is (are): O a. positive extermalities from product production. O b. spillover costs from the production of this product. Oc spillover benefits to the production of this product. O d. an underallocation of resources to product production.

Demand BA Quantity Refer to Externality graph above. Point A is the current equilibrium level of output of t product and point B is the socially optimal level of output for the society.S is the supply curve that includes private costs. St is the supply curve that includes public costs. The gra indicates that there is (are): O a. positive extermalities from product production. O b. spillover costs from the production of this product. Oc spillover benefits to the production of this product. O d. an underallocation of resources to product production.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Figure 17.2) Suppose the external marginal cost is constant at $5 per unit. Price (demand) equals social marginal cost at output level: Select one: a. 7 b. 3 c. 6 d. 4 Price (S) 14 12 10 00 8 6 4 2 -N G 8 o 10 S = MC 12 14 Quantity
Only typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…
Which statement about externalities is wrong? O Markets are typically not efficient in dealing with externalities O Externalities can be positive or negative O A firm naturally takes into account negative externalities that result from their production O Interventions such as carbon taxes can help correct externalities gative externalities imply that the social cost is high than the internal (or private) cost
500 450 The graph on the right may help in answering question 25 400 350 300 250 200 150 100 50 O 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 Quantity Demand MC Exter nality MC private MC Social A competitive tire manufacturing industry spews emissions into the air at47 per tire a marginal cost of 1.5-q, where q is the quantity of tires produced per month (in thousands). The industry marginal cost, excluding the cost of emissions (private marginal cost), is 4 + 4•q, expressed in $ per tire. The inverse demand curve for tires is p = 480 - 3-q, also expressed in $ per tire. In order to achieve the socially efficient level of tire production, which takes into account the optimal level of air pollution, the government levies a tax on the industry. What is the efficient pollution tax? $84 per tire $101 per tire $152 per tire Price
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According to economists what is the optimal amount of pollution? O a. The optimal amount of pollution is where private costs equal social costs O b. Pollution should be reduced to a level as determined by government regulation O c. None, the goal is to completely eliminate pollution d. The point where the marginal benefit from further pollution reduction equals the marginal cost of further reduction
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Refer to the below competitive market diagram for product Z. Assume that the current market demand and supply curves fo substantial positive externalities associated with the production of Z, it can be argued that: B 0 Multiple Choice O SA G 52 D₁ D2 an output smaller than G would improve resource allocation. an output greater than G would result in a more efficient allocation of resources. government should levy a per unit excise tax on Z to shift the demand curve toward D₁. Prov 18 of 53 Next
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Under conditions of the Coase Theorem, whether one or the other of two parties to a conflict over air-pollution externalities holds the property rights will affect O the efficiency of a negotiated solution the amount and method of pollution reduction to be used O who must compensate whom O who will make the initial offer in negotiations